by Delbert Ashby
The first thing a prospective cash flow note seller wants to do is talk numbers. That’s the last thing I want to do. How can I talk numbers until I have seen the “car” I am buying (the note, etc.). I might not want it at any price once I have seen it!! Yet, most people let themselves get trapped. They put their foot in their mouth and lose deals by talking numbers first. It appears that we get lulled into thinking that all notes are alike. There must be a reason that they call the things we usually buy “NON-CONFORMING PAPER.”
I try to defuse the question of talking numbers with the note seller by deferring it until later. “Mr. Seller, I’ll get to that in a minute but first I need to get some additional information…” I do not refuse to answer, which would set up an argumentative or confrontational atmosphere, but rather put that part of the discussion off until later. I find it essential to control the conversation to be effective.
Remember that I evaluate potential transactions based primarily on the property, the payor, and THE TERMS AND CONDITIONS WRITTEN IN THE NOTE AND SECURITY INSTRUMENT.
Clearly then, I need copies of the note and security instrument before I can intelligently discuss a potential purchase. I will also need one additional document — a copy of the settlement statement when the note was created. Have the seller provide you these and read them carefully.
Delbert Ashby is a veteran note investor and broker and the author of the book Make Money Trading Mortgages. For information: http://store.papersourceonline.com/best-beginner-book/
