Buy notes with none of your own money!

 By Mike Wood

2005

This year I bought two notes that are bringing me free money.  Anyone can do it.  There are many ways to do it.

Here is how:

First get rid of the psycho babble and start believing in it and looking for the opportunity.  If you don’t think about it all the time you will miss many opportunities.  If you don’t believe in it or in yourself you will miss many opportunities.  If someone else can do it then you can too!

Find the notes:

Professionals, Hard Money Lenders, postcards and telephone marketing, seller finance ads…

If you are going to buy your own notes you will want to work with an area that is close in case there are ever any issues with the payments.  I prefer to buy notes only in my local area.  You can decide whether you feel comfortable with only 1^st position or if you are willing to buy a second.

Evaluate any note you are looking at buying to see if it meets your risk/return requirements.  Don’t worry that you don’t have enough money to buy a good note when properties are selling so high in your area.  Look for what is there and you will be surprised what you will find.

I just started contacting professionals to find notes to sell and found when talking to a Mortgage Broker that he and his Lawyer partner had notes themselves they wanted to sell.  I kept their contact info for over a year.  Don’t do this without looking at all options.  They had many small notes in the beginning.  As the year went by they changed the way they held paper and the notes they have now don’t work as well for my desires of immediate return.  They are still good notes for other options such as a Roth IRA.

I have found other notes through marketing to my local market with post cards.  Leads from Dataquick and totalnotesolutions.com will give public records of the notes created in your area many times.  If they do not have your preferred marketing area then you can find the details in the courthouse records. 

Find the money;

Credit cards, line of credit…I was surprised what I found, so was Bob, Heloc, IRA, Retirement accounts…

line of credit…

I started looking for money to line things up to buy these notes I already had found.  I had a bankruptcy 6 years back.  I did not know what my credit would allow but finally after I thought about it for a year or so, I talked to my bank while getting a car loan.  I asked, “how much can I get for a Personal line of credit while I am here.  They looked at the credit they had just pulled and said $15,000 at 7.78 %.  I said that sounds great!  When can I have it available, They said now.  I thought that was pretty great too!  I setup a line of credit right then and there.  I then created a business account with the same bank.  As I set this up, I asked for another line of credit with that account.  How much can I get I said, How much do you want they said…I would like the same as I have on my personal account.  We will need to pull your credit they said.  I am buying a house so let’s not do that right now.  They said no problem, we can give you another $5,000 with no new pulls.  Sounds good. 

So now I have how much money available?  That’s right $20,000!  Careful with how you use this money of course however right?  This is not spending money.  This is a tool.  I asked the bank how much will my payments be and how soon will it be paid off.  Then I took that information and added $10-$35 to each payment and took that figure to the guys with the notes.  Do you have anything like this?  They said, yes, $50,000 of notes that fit your criteria.  I bought 2 for $20,000 and have $1,000 more than my required payment coming in each month for about 6 months and then it will continue with about $400-$500 positive. 

Credit cards,

Heloc,

IRA,

Retirement accounts…

Ask about payments, ask for notes that fit, make the purchase.

$1,000 free and clear each month not just once.

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