If you’ve been in this business (of helping people sell their seller financed notes) as long as I have, you’ve had the experience of a “great” deal going sour at the last possible minute. Over the past thirty years I’ve certainly seen note purchase transactions that I would not, frankly, have given much of a chance and we got them to close. But of course, the reverse happens too now and then, when deals that looked completely solid fall through at the last minute.
How do you handle it if that happens to you? Here are some tips from me, someone who has seen it all (almost), that may help you when deals fall through.
Don’t “necessarily” blame yourself. I say “necessarily” because there probably are some things you can learn from the situation to do differently next time – but we’ll get to those in a minute.
It’s important, when the sale of a note falls through, not to indulge in too much regret. That won’t help you get where you want to be. Realize that these things happen. And if there was something “off” about the deal, aren’t you glad you found out before it was finalized? Take a deep breath. There’s always another note out there.
Don’t assume you have to start from “square one.” It’s easy to feel like all your hard work to get the note to the point of purchase has been wasted, but that’s just not true. You’ve likely spent months, if not years, practicing, learning, building a team of associate note professionals and advisors to assist you during note transactions, and increasing your note business volume. None of that is wasted just because a deal falls through; dust off your hands and pull out your follow up list – and move on to the next note holder.
On the other hand, DO take a realistic look at what soured the deal. Maybe you do need to fix something so that this doesn’t happen again. This is especially important if several deals go south. Don’t be too quick to “blame the economy.” Economic factors may be relevant here, but maybe you overlooked something in the negotiating or due diligence process that you need to go back and reconsider.
Are you sure you are diving deep enough into the true need of the note holder? Are there any skeletons in the note holder’s closet that they just “happened” to forget to mention? Have you been trying to sell (or buy) the note at a higher price for than is realistic for the current market? Now is the time to look at your process with clear eyes, so that you don’t spend even more time and energy trying to force an impossible deal to close.
Don’t lick your wounds in private. Though the last thing you may feel like doing is picking up the phone (to call and follow up with past note holders that have not sold their notes yet), now is the best time to get out there and re-energize your note business before you lose momentum.
Network with other note professionals, communicate with your mentor, coach or someone you look up to in the note industry to vent, invite other note industry associates to lunch, read past industry newsletters, articles and blogs that you like to follow or attend a note industry event.
The next thing you read, watch or person you communicate with could have the perfect message for you or say the perfect thing that keeps you moving forward instead of wallowing in a deal that fell through. Hope this helps! Be kind, keep safe and stay healthy. Remember success demands action, keep on marketing, it’s going to work! TWITA! (That’s What I’m Talkin’ About!)
Jeff Armstrong of Armstrong Capital has been a note investor and broker specializing in the performing seller financed note industry since 1991. For more updated and current information on how he can help you with your note business, note investments, note appraisals or to request pricing options on a note visit www.armstrongcapital.com to email him and subscribe to his weekly Note-Able Newsletter.