Discounted paper, notes, mortgages, debt instruments, income streams, cash flows, cashflows or cash-flows -- no matter what you call it, it adds up to one of the most profitable enterprises in the world. Those who broker and/or invest in "paper" buy and sell payments from real estate mortgages, trust deeds, contracts for deed, lottery winnings, structured settlements, annuities, tax lien certificates, royalties, leases, insurance benefits, retirement accounts, consumer products, credit cards, contractor's liens, home improvement paper...there are investors ready to buy the paper from virtually ANY transaction in which there is a promise to pay over time. The Paper Source offers proven, real-world guidance to note (cash flow) brokers and investors FROM PEOPLE WHO MAKE THEIR LIVING AT IT.
by W.J. Mencarow, Jr., president of The Paper Source, Inc.
"I saw your ad. What do you mean you buy mortgages?"
Your best strategy is to ignore the question and ask one of your own: "Are you
receiving payments on a mortgage now?" Otherwise, you may find yourself explaining
mortgage investments to someone who is simply curious. Don't waste your time with people
who don't have notes for sale.
"What do you pay for mortgages?"
Again, don't waste your time. Make sure they understand that you are only interested in
beginning a conversation if they have a mortgage to sell. Ask, "are you receiving
payments on a mortgage now?" It's amazing how many people think they can sell a
mortgage they're paying on! If they say yes, the answer to the question of what you pay
is, "it depends," and you then proceed to ask them the questions from the intake
sheet.
"How much of a discount will I have to take?"
"As little as possible. Each note is different." Then ask your questions.
"How long does it take before I get my money?"
"Once you furnish me with all the documents I need, the process will take a few
weeks." (It may not, but you now have the time if you need it).
"Why does it take so long?"
"The title search and appraisal are what takes the longest, and we have no control
over those. It may very well be shorter."
"
Are there any points or fees I'll have to pay?"
“No, there are no points, and I'll pay all the closing costs. Nothing will be
deducted from what I pay you."
"What documents do you need?"
"Not many, really. I'll go over that with you when we meet to complete our agreement
to buy the note. Would 3 o'clock this afternoon be all right, or would 8 o'clock tonight
be better?"
"What if I can't find all the documents?"
"That's OK. The lawyer or title company which handled the property sale should have
copies of the key documents or be able to get them for us."
"Can I use my own lawyer?"
"I would insist on it. I strongly encourage you to have your lawyer review everything
in advance. Of course, I can't pay your lawyer's fee, that's your responsibility." A
note seller who asks this question is afraid you're going to take advantage of him. The
best way to dispel this is to do what he doesn't expect - insist he consult his lawyer
before he acts. "Whosoever shall compel thee to go a mile, go with him two
miles." (Matthew 5:41)
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