Author: Randy Hughes, Land Trust University, Chicago, IL

What is a land trust? Why do I need to use land trusts? Both are very important questions. But let us be straight forward with this article. You have worked very hard to accumulate property for investment. You put yourself, you family, and your children’s future at risk investing in real estate.

Do you realize that one false move with just one of your properties can cause you to lose all of your hard earned investments. One careless tenant can be injured on your property and the world will fall all around you. Ask yourself the following question “Can you control what is happening at all of your properties right now – this minute?” Is it possible a careless tenant can be injured or die tonight in your rental property? This happens every day in America.

You need a land trust for each property. You need the knowledge that your attorney does not have on this asset preserving technique. Why work so hard over time to have one uncontrollable tenant event cause you to lose all of your properties? Come on! You have worked very hard to build your asset portfolio. Why lose it now!

Land Trusts are the first safety catch to insulate your self from the millions of lawsuits happening in America every year. Do you want protection from the contingency fee lawyer or would you rather have a bare knuckle fight with him without any defense guards in place?

You have probably noticed that it is VERY difficult to find any information about Land Trusts and how they operate. That is why people from all over the United States come to our website to find accurate information about Land Trusts. Most attorneys do not know how to set up and administer a Land Trust (they receive only three hours…if any of trust education in law school).

The problem is that most practitioners do not know how to set up and administer Land Trusts so many of them consequently advise people not to use them. However, you were probably told by someone (an attorney, accountant or friend) that you need a Land Trust, but nobody told you how or where to find information to help you get started. The point is, do not trust someone (that gives you advice) who does not have direct active knowledge of Land Trusts and their benefits.

We have been using Land Trusts in our full time real estate investment business for almost 30 years. We live and invest in Illinois (the Granddaddy state of Land Trust law) and use Land Trusts in our business constantly. We have found that often times advisors tell their clients, “You can not do that” with a Land Trust. Most of the time they are wrong!

From Roberta and the Note Servicing Center Staff,

BREAKING NEWS

PRESIDENT’S CORNER

SELLER FINANCING IN DETROIT WITH LAND CONTRACTS

By Jeremy Burgess

NSC INSIDER SCOOP:

Why You Failed in 2010 and 7 Ways to Make 2011 Different by Fred Rewey

NEWS, VIEWS AND EVENTS:

YOUR BUILD YOUR BUSINESS – WE SAVE YOU TIME AND MONEY

Our own experience as a note servicing company gives us “first-hand” perspective dispelling this myth. Statistically, we can verify the existence of billions of dollars in notes and cash flows available in the marketplace – it is true that there is a lot of competition… and the real estate and financial market is in tatters. It is, what it is!  

The competition is always intense (or “in tents” – joke!!).  Anytime you have an excellent product or service, is it highly competitive and this goes for he cash flow business as ell. The discovery of a secondary market for the purchase of notes secured by real estate, mobile homes and other non-public traded cash flow investments has birthed a vast and growing economy. 

However, as a participant in the cash flow, real estate and financial industry; we know that a note broker, or note finder can out pace, outperform and out live most of your competition… simply by making a personal decision to adopt an age old, but still cutting edge philosophy from the day you initiate your business – a philosophy that will keep you on the straight and narrow path to success and financial freedom! 

The “TRICK” ingredient guaranteeing your success in any business opportunity is the “Practice of Persistence”… a commitment which must be inculcated and practiced from “day one”, until it becomes an integral element of your daily business function.  

This “Practice of Persistence” alone, will leave your competition in the dust.  

Why?  Because most people will try something once – but when they don’t get immediate gratification they fold.  Or, at the first sign of a problem, or the first bump in the road, they typically give up, throw in the towel… and quit. Or, at the first discouraging word, most of your competitors will question the wisdom of their decision to be in the business, and they run for cover by blaming someone else, or burying their head in the sand – rather than face the fact that they just didn’t tough it out. 

Take this as gospel.  Most of your competition will be wiped out in the first few months of business!  This is not because the cash flow business is unprofitable or the training is inadequate.   It’s because the preponderance of most prospective note professionals do not even attempt to develop primary attributes of success, or recognize that attributes such as the “Practice of Persistence” are essential to success. They may have started out well, but then something happened – they encountered a difficulty – a problem they just couldn’t find a detour around, or couldn’t take the time to check out their map for success.  

Persistence coupled with goal orientation generates creativity and produces resourcefulness.  Persistent behavior, practiced to the 9^th power insures success.  In business, persistence is one of the qualities prerequisite to success. It gives you staying power. It stares adversity in the face; finds a way over, under and/or around difficulties.  Persistent action will build your business through cultivation of prospects. It doesn’t take “no” for an answer and when partnered with the honest belief and knowledge that the product or service you are delivering will result in abundant success.    

There’s a difference between persistence and aggressiveness. Yet, the words are often used interchangeably. There is something repugnant about aggressive people – they can make you mad – you want to run from aggressive people. On the other hand, persistent behavior is admirable.  There is something heroic about persistent people. Aggressive people are typically angry and loud. Persistent people are typically gentle yet, quiet confident plodders.  

Been There, Done That! 

Let me give you a practical example how “practiced persistent” behavior can and will pay off and set you apart and heads above your competitors. These practical words to the wise comes fresh off the pages of my two decades of experience working with and carefully planned and executed marketing for business.   

When I call note holders to obtain note servicing accounts, many note holders tell me they have received anywhere from 10 –15 calls, and their mailboxes are cluttered with “junk” mail, post cards and letters from prospective brokers and buyers.  

Now, here’s the good news!  Within 30 – 90 days, typically the marketing calls cease and the mail drops-off almost entirely. This is where your competitors “exits stage left”. But, not you, right!  You remain one of the few who routinely, religiously, persistently and consistently hang in there.  

Try this strategy.  Why not contact the prospect after the “honeymoon”.  You know, the first few payments are usually on time, then get a few days later and later. Or as the remorse settles in (about taking back paper) or they find a toy to buy or an emergency pops up.  Then, where are all the swarm of cash flow and note buyers who started out well, but something hindered them? Where is your competition??  I’ll tell you where… I hear from them all the time saying, “Hey, I sent you’re a post card and called you a year ago…..wonder shy they hung up?    

Make sure your correspondence or call includes something like “You may not need our service today, but keep this card with your closing papers and call me anytime”.  Then develop a database and follow up with a “Practice of Persistence”. 

Don’t be discouraged.  Just keep moving forward, keep learning and growing, surround yourself with successful positive people, try not to be influenced by people who are discouraged, are critical; or who have tried something once and failed for whatever reason. They will drag you down and put you out of business.  Develop a plan of action and work your plan on a daily basis… and above all “Practice Persistence”.

Considering the headlines, news groups, political scandals, panels and pundits, it’s a small wonder we’re not all blithering crazy. Reports range from the latest unemployment figures hovering over 10% (if you count the people who have given up looking it is more like 17%); stock prices are either falling or bouncing around like a yo yo; the explosion of millions of foreclosures now plague the nation at a viral rate and to top it all off, government bail outs and mortgage fraud is rampant. When you add all this to the din of roaring printing presses in Washington signaling inflation just around the corner and the tax increases looming on January 1, 2011, it’s not hard to believe the validity of the question, “Where are we now, and What shall we do?”  No wonder the answer coming from the cash flow specialist, real estate or a loan broker; builder,  Exchangor or investor is simply: “Hey, we’re over here dangling in mid air…We are at the end of the rope”.  

If History is a telescope to the future, we try to reach back to the 1920’s and 1930’s to recollect through reading and documentary to see if there has ever been an economic landscape that even mildly resembles the current political, economic, social and financial picture standing on the premise that history repeats itself, and thereby getting some kind of a clue. No such luck. The answer to the question of “Where we are we now” given the state of financial health of our country appears to be universal and that is: “Somewhere”.  We know the economy is in tatters and most of our investments and those of our clients are worthless.  There is no doubt; we cannot depend upon business as usual. “Somewhere”, unfortunately, is the best answer I can offer as well. 

Almost over night, banks and private lenders and brokers have gone from “almost no regulation” to “massive over regulation”. With the SAFE Act no law, regulation has even reached down to restrictions on seller financing. Over 150 new government bureaucratic agencies are being established as we speak, for the purpose of establishing, publishing and distributing rules and regulations to oversee the financial, economic and social laws oozing out of congress on a daily basis.   Yet, new politicians appear every week, stumbling over themselves to get into the game of getting elected into office (to make a change) while those in office find themselves in a stew of ethics violations and allegations of fraud. 

We do know Real Estate is a leveraged investment with built in tax benefits. It makes sense then without equity all the formula used by the Real Estate Professional is blown away. Declining values has wiped out the equity required for sales, leasing, exchanging or financing.  Liquidity has dried up with banks refusing to lend, private investors have taken the “wait and see” approach and are stashing their cash under the mattress.  The affordability required for end buyers to purchase is virtually wiped out based on unemployment and high taxes and now it appears the tax benefits will soon be history  and the increase in inheritance taxes give us another reason to try to keep on living.     

How we got here is not totally subjective with opinions flying around at high speed over the airways and internet on forums, films, blogs, face book and twitter. As an individual, most don’t have a clue where they are except in concept; but the feeling is universal: We know we are in trouble. But then maybe I am wrong. I do after all recall a documentary film in the mid 1990’s entitled, “What the Bleep do we Know”.  

I was encouraged by one answer found recently in a Post on www.creonline.com  posted by David Butler, President and founder of Nascent Equity and Hotspur Investments. To many of us in the business, David has been a friend, but also an astute business man, author, presenter and mentor for the cash flow industry. The post is rather lengthy but worth every minute you invest in the reading. It gives us all at least one viable answers to the penetrating question of “What can we Do Now”.  The post is entitled “Sound and Fury” Posted by David Butler on November 19, 2010 at 18:38:43: http://www.creonline.com/wwwboard/messages/95938.html  

In the meantime, one thing we know for sure is “the only way to move through this unprecedented economic fog and era of uncertainty is to keep moving.  “Hang in There Baby, and don’t let go!

You thought 2010 was your year to break out on your own. Create your own business – an online empire that would yield you income and financial freedom.

But then American Idol had a special, you had to find out what happened on the last season of Lost (and blog about it), and, what is that?… Sarah Palin has a reality show?

Frankly, you blew the year with distractions.

It is easy to do…I mean…distractions are so…well… distracting.

It is so much easier to chat about how Obama is some secret plant by the Soviets sent to destroy America or how Starbucks is adding stuff to their coffee to make people want to buy an accompanying muffin.

Hey, those are much better topics because, frankly, who the heck wants to look within for reasons of not accomplishing your goals?

Dare to peek into the looking glass? Then read on…

Here are the Top 7 reason 2010 sucked and how you can change all that for 2011.

1. Get Real – Quit cutting corners looking for some get-rich-quick program or new money-making shiny object with instant riches. There are plenty of ways to be successful but, guess what, they all will take work. Plan on learning about something in 2011. I mean really doing your homework – not just buy some box of CD’s that will sit by your front door until you sell them on eBay six months later.

2. Email Sucks – If someone sends you any email that says, “Make $1293.23 in two days,” delete it….FAST. Stop reading that crap. Those guys make money by selling the concept of making money. Period. That is it. Do you REALLY think some seven-year-old discovered the secrets of Google and made $10 million dollars on Adsense in her sleep? Get Real and just stick to reading emails from your kid (unless that is who is sending them to you).

3. Stop doing “work” and start getting results. It is easy to do busy work. Lots of stuff that, at the end of the day, didn’t earn you a dime but feels like you did something. Pretty logo’s, business cards, cute names for your company, color-perfect websites. Before any task, ask yourself, “Will this make me money?” If you can’t answer a big “yes,” in the short term…move on to something that will.

4. Set a real deadline already. Quit saying something is “in the works” or it will forever be in the works. When will it be done? Set a deadline (and actual date and time) and tell friends to kick you in the ass if you don’t meet it.

5. Quit Bitching You Big Baby– The world owes you nothing. Life Sucks…get a helmet. Either do something or don’t do something. But don’t make up a million excuses “why” you couldn’t do something. Some people spend more time making excuses than it would have taken to use that same amount of time to just do the damn thing. Just do it already or quit whining about it.

6. Stop Twittering, Facebooking, and playing Farmville. – That huge sucking sound in the background when you fire up Facebook is the sound of your life going down the drain. You are not a real farmer and you are not “keeping in touch with your friends” – you are maintaining a narcissistic website all about you (and that is ok if you are a Diva with nothing better to do). Don’t make excuses that social media is anything other than that. Want to talk to a friend? Pick up the frigging phone and call them – it probably automatically forwards to their Facebook account anyway.

7. Admit that several of these things apply to YOU. I did. It is easy to read this and say, “heck yes, those people are idiots!” In reality, you are probably one of them.  Absoultely, we all are.

So… the best advice I could give that would be all encompassing and get 2011 back on track to your goals…. “Stop it already.”  

I hope you have a great 2011. If you don’t, it is probably your own fault.
For more great blogs check out http://fireyourboss.com/

Did you know you have an internal GPS that works in a very similar fashion?  Just as with the GPS Tracking System you can use your GPS to experience unprecedented success regardless of circumstances, weather, other environmental interference; atmospheric factors and other sources of errors or circumstances which may slow you down. It will keep you on tract, power you up, guide you to success and record your progress on a daily basis.  No subscription fees necessary to turn on your personal GPS which consists of:   

G – etting Started,  P – ersistance,   S – etting a Goal.

Getting Started – From Inertia to Activation 

Most individuals have a problem with getting started.  To activate your GPS your have to get moving.  In the words of Albert Einstein, “nothing happens unless something moves” and he got that right for sure.  Unfortunately in the note business or any other business for that matter, you just can’t wait for something to happen.  A moving object usually stays in motion.  I just returned from a marketing and exchange meeting where everyone was talking about why nothing is happening!  My answer was simple but not very popular and that was, “What have you been doing in the last week to put together a transaction?  How many people did you network with? How many calls did you make? How many responses to preliminary proposals did you execute? How many ideas did you brainstorm with associates? How many good ideas did you implement?  

Trust me; nothing is going to “happen” until you take the knowledge, the ability and the training you already have to GET STARTED. So do something, even if it wrong.  I have learned more from my mistakes and errors than I have with my successes – so Start doing something today, but certainly no later than January 1, 2011.  Get up to bat and if your afraid you might strike out, let the last ball hit you and walk the base, but at least you’ll get somewhere. From second base at least you’ve moved and have the opportunity to run to second when someone else hits the ball. You’ll be moving by default, but at least you’ll be moving. 

Persistence – Keep moving  

You have no use for a Tracking System, if you’re not persistently moving in the direction toward success. I know about the problems you will encounter, they tell me even the GPS can get screwed up by changes in the atmosphere and the environment.  You will encounter some of the same situation. There could be volcanic action to your transaction, at least one earthquake mostly due to unexpected shifts in the plates of your negotiation or a slight movement in your plan of action. Things either won’t come together, or come together with at the wrong timing or just not quite fit situation.  But, you will find a way over, under, around or through with practiced persistence.  During a trip from LA to Miami a few years ago we experienced a dreadful detour in El Paso, TX.  It took us a half day longer, cost an additional night in a hotel and untold aggravation. But, I will guarantee you; we didn’t settle down, get a job and set up housekeeping in El Paso. We didn’t turn around and go back to LA either. We got out our map, found a new route, got back on track and kept moving.  Why?  We had a goal – a definite purpose, a commitment, a destination and we had made a commitment to be there. No emergencies or problems could stop us.  We not only arrived but with enthusiasm, and thankfulness to have arrived on time at the designated location.  You can do the same in 2011, but you must Get Started, be Persistent and Set a Goal.    

Setting the Goal – Determining your Destination  

Every pilot is required to file a flight plan and a part of that plan is to determine the destination.  Built into the GPS system for your business there must be a definite “destination” clearly indicated.  The system simply cannot TRACK your progress or keep you tracking without a predetermined destination. In the Global Tracking System the Satellite rotates twice in a 24 hour period.  It is no different in our personal GPS.  Before retiring for the night, mentally review your plan for the next day and when you get up, take another look at the daily planner and prepare for your presentation, your appointment or your phone calls for the day. Your flight plan sets the course in the development of your plan of action. Without a clear-cut direction in business or in life for that matter, we are an easy prey and target for buying into someone else’s belief system and allowing others to plan your course. 

Life without a goal is like entering a jewel mine, and coming out empty handled. Successful people are Goal Oriented People – they know what they want, they are happy people because they know where they are going. They have enthusiasm that surmounts every obstacle that finds a way around, over or under the obstacle.  In fact, they consider every obstacle as simply an opportunity turned upside down.   This enthusiasm keeps them optimistic. Goal oriented people are enthusiastic people, they are fighters, they are doers, and they are creative. They think in terms of possibilities and learn to “Color outside the lines”.  They have a burning desire to get to where they are going. They have the attitude, nothing will stop me. They detour at times, but keep ever moving forward motivated towards what it is they want to achieve. 

The New “hand held” GPS System

I hear there are Hand Held GPS devices available in stores everywhere these days. Get the kind you can put together yourself as there is no standard one size fits all type. There are no fees or subscriptions – you simply put you own together piece by piece. Don’t delay. Keeping this devise in your hand or in your pocket each day will guarantee success. Put yours together early in 2011.  Take it with you everywhere you go to stay on track. Get started working your Plan each day; Persist regardless of interference and it will keep you goal orientated.

I’ve done the FHA dance and I have the scars to prove it.  From reverse mortgages, 203k’s, and traditional FHA products all with similar results.  Great initial success followed by abysmal failure.  Not to be too doom and gloom on you but the fault lies not with FHA or the underwriters, but with me, the investor.  I made the choice to give control of my success and profits to a third party.  Well no more.

I stumbled across land contracts by accident.  I started receiving leads from my investor wholesale site from home buyers asking me to finance my houses for them.  I ignored the leads at first.  I had real problems to solve and it didn’t seem like a great solution.  However, more leads continued to trickle in and I wasn’t even advertising.  Luckily for me a friend stepped in with his story of success with land contracts.   

I started calling these people and I realized very quickly that they would agree to just about anything to buy a house at half the price it was selling for three years ago.  I was in the driver’s seat.  Using metrics provided to me by my good friend David Butler, I became the underwriter.  I ignored what most underwriters focused on the most, value and credit and chose instead to focus on afford-ability, down payment, and commitment to home ownership. 

The results were and continue to be impressive.  I regularly get $3,000-$4,000 down, whatever I want for purchase price, and a decent size payment.  And I have buyers competing to buy my house.  Nice change of pace.  Now for the nitty gritty. 

Mistakes I’ve made and some tips for qualifying tenants 

Never ever, ever trust what the buyer tells you.  Call and verify everything.  If you can’t verify, move on.  Don’t get attached to the family which is easy to do and I admit, I fell prey to this one time. 

If they are a handful before they even buy the house, walk away.  Repeated phone calls and emails and even showing up unannounced at your office before the time you agreed to contact them is a major red flag.  I will walk away from this now. 

Take the time to educate them on what it means to be a homeowner.  Property taxes, maintenance, making payments, living in the house for years.  I will literally scare the pants off them now where I used to be all sugar.  Being a homeowner is not all fun and games and they should know it upfront.  This scares away most of the problem children. 

Set appointments that are difficult for them to keep.  This shows how committed they are to buying the home.  Also, if they are late for an appointment and don’t call you ahead of time, this is also a red flag. 

Don’t close the deal to fast.  Close it too fast and they feel like they haven’t had enough time to think about it.  I like two to three weeks. 

Don’t take too long to close the deal.  Anything longer than four weeks and they might find something else or change their mind. 

Afford-ability is more important than anything else.  I add up all of their bills and subtract it from their net income.  If they don’t have $500 left over after paying everyone (in my market, average income $35,000 a year), including me, I know I am one unexpected problem away from missed or late payments.  Life happens, so plan for it. 

Sometimes they will test you by making late payments or slow payments.  Start the eviction/foreclosures process immediately.  When they get that letter from your lawyer, they almost always pay and all future payments are on time and or early. 

Give yourself an out.  I put three year balloon payments in.  What if property values rise?  What is I want to sell and move to Costa Rica?  What if I want to make the house a rental?  What if I just hate these buyers and I want them out?  I built in an escape hatch just in case. 

Last but not least, don’t be cheap.  Hire an attorney to do the paperwork and make sure he or she is good at what they do.  Make sure you research your states requirements and follow them EXACTLY.  If the crap hits the fan and you have to take one of these back, you don’t want to end up in front of a judge who finds you haven’t followed RESPA guidelines and fines you or maybe gives them your house.  Robo signers anyone? 

Hope this helps.  It takes a little bit more work but it is not just a viable way to solve problem properties but also an effective way to fill more properties as you grow your portfolios.  Let me know if you have any questions. The Detroit Market Expert http://www.UrbanDetroitOnline.com

Historically this process was a bit easier, when everything was in an “up” market. But with property values still on the downside or just recovering, it is often difficult to put a (safe) number on it. At least one that everyone agrees on.

Although there are excellent programs on the Internet that help the average consumer to get an idea of value, they are not always accurate. The actual value of a property can be determined in a couple of credible ways.

Often, note investors get what they call a “drive by” appraisal or valuation.

Usually performed by a licensed appraiser, the report will include other sales or comps in the area. The main difference is a “drive- by” evaluation does not require the appraiser to have access to the interior of the property. The appraiser actually drives by and takes pictures from the street for the report.

Some investors are using what is called a Broker Price Opinion (BPO) – an evaluation based on the advice of a real estate agent or broker. They are often very similar comparable to a “drive by” and at a lower cost but do not follow the strict guidelines of a certified appraiser.

The note buyer may even require a full interior appraisal to get comfortable with the value. This might be the case when there are substantial improvements to verify or there’s concern over the property condition.

The actual approved or preferred method will be up to the individual investor. While they are buying the mortgage note and not the property itself, the value is still important in deciding risk, investment to value (ITV), and the price they will pay to purchase the remaining payments.

For more great blogs go to http://noteinvestor.com/

December 2010 Newsletter
Content:  

GREETINGS

From Roberta and the Note Servicing Center Staff,

December is a time for looking into the night sky on a cool crisp evening
when the deep blue darkened sky serves as a backdrop for a profusion of twinkling and sparkling stars. It is a time to for the change of seasons and perhaps for some the first snow. City streets are aglow with a profusion of sights and sounds of music and streets are homes are decorated with lights on windows, roof tops, doorways, trees and driveways. It is a beautiful time of year. It is also the month of the Winter Solstice where the nights begin to be shorter around December 21st and the day s grow longer.   

But as beautiful as it is, January 1, 2011 is just around the corner and with it the opportunity to seize the opportunity to begin anew and to turn over a fresh page. It is the time to set new goals, develop a fresh plan of action in case you have strayed off track. As you start this process, remember nothing is going to “happen” until you take the knowledge, the ability and the training you already have to GET STARTED. So do something, even if it wrong. I have learned more from my mistakes and errors than I have with my successes – so Start doing something today, but certainly no later than January 1, 2011.   

Get up to bat and if your afraid you might strike out, let the last ball hit you and walk the base, but at least you’ll get somewhere. From second base at least you’ve moved and have the opportunity to run to second when someone else hits the ball. You’ll be moving by default, but at least you’ll be moving.   

Life without a goal is like entering a jewel mine, and coming out empty handled. Successful people are Goal Oriented People – they know what they want, they are happy people because they know where they are going. They have enthusiasm that surmounts every obstacle that finds a way around, over or under the obstacle. In fact, they consider every obstacle as simply an opportunity turned upside down. Goal oriented people are enthusiastic people, they are fighters, they are doers, and they are creative. They think in terms of possibilities and learn to “Color outside the lines”. They have a burning desire to get to where they are going.   

I encourage you to seize the opportunity during the few days between Christmas and New Year that are typically slow, to set aside time to review the progress of last year, but primarily to look ahead and set some serious goals for 2011. Get the cooperation of your family and then lay out a critical plan of action. Most of all get moving! All of us here at the Note Servicing Center wish all of you a blessed holiday season and a very Happy New Year.   

BREAKING NEWS

I hate to break the news, but it’s the time when you soon will have to face the miserable task of getting out those dreaded IRS 1098 forms to your borrowers. Do you really want to do it again next year?? If you are a Note Broker, Investor, Mortgage Broker or an LLC Manager you are statutorily required to prepare and send year end IRS 1098′s and/or 1099′s at the end by January 31st of the following year. We are bustling around here at Note Servicing Center preparing to provide those right now for our clients who have used our service in 2010. Here’s the good news: If you are not already a Note Servicing client, we will be more than happy to take this job off your hands next year – at absolutely no cost to you when you use our servicing.   

Obviously, the most cost effective, convenient and efficient time to start this benefit is to begin the servicing of your note or notes on January 1, 2011, to be prepared for the next calendar year. So, if you have been procrastinating getting those notes sent in, just go to http://www.sellerloans.com click on “SIGN UP AND FORMS”, select the appropriate package or forms and follow the easy steps. We take over from there, and do all the work. For questions or help, contact info@sellerloans.com or call 209-966-3445 ext 12. We want the job!    

PRESIDENT’S CORNER

As many of our Newsletter readers know there has been many articles and publication concerning the S.A.F.E. Act and how it might affect the note business. As the designated broker for the Note Servicing Center Inc., it is vital we keep the company in compliance by taking a positive action to conform to this new regulation. Early in November we passed both the Federal and State test, obtained the required, completed the necessary documents and have been approved as an NMLO originator in CA and continuation of a qualified third party loan servicing company on a nationwide basis. There has been significant speculation of whether or not a servicer will need this license endorsement, but we decided to go for it anyway with the idea that it is better to be SAFE than Sorry.

INCREASE VALUE WITH PAYMENT HISTORIES

Tracy Z. Rewey

Keeping an accurate record of the payments received on the note shows how much the buyer still owes along with their payment habits. Plus, note sellers can also improve the value of their note by providing a verifiable payment history to the investor!   

There are two main ways to keep track of the payments. The first and easiest is to let a professional handle it. The payments are made to a third party servicing agent (http://www.sellerloans.com/) that keeps track of the balance and sends the money along to the seller. They will also send out the annual 1098 Mortgage Interest Statements and can hold original documents in safe keeping.   

If a seller chooses the “Do It Yourself”‘ method over a third party pro they will need to follow these steps.   

1. Place original note and other original documents in a safe deposit box.
2. Make a copy of each check or money ordered received (accepting cash is not recommended as the lack of paper trail makes it hard to verify).
3. Keep a copy of the bank record of deposit for the payments received.
4. Create a ledger reflecting the date and amount of payments received.
5. Calculate the amount applied to interest, principal, late fees (if any), and the resulting principal balance. An amortization schedule or calculator can be helpful. Once calculated, record in the ledger.
6. Send out an annual statement to the buyer or payer along with the IRS1098 Mortgage Interest Statement.
7. Verify the real estate taxes and property insurance are being kept current. Consider establishing a tax and insurance escrow wherein the buyer pays 1/12th of the annual amount into a reserve account each month.
8. Send collection letters as necessary for late payments.

When an investor agrees to purchase a note they will request a payment history. A verifiable payment history can improve the value of a note as it provides proof of timely payments. A payment history is considered verified when it is either provided by a third party or is backed up by the documents and records outlined.   

Unfortunately many sellers fail to keep track of the payments received. When they go to sell the note they try to recreate the history from memory. Without any proof of payments received, an investor has to go on faith. Sometimes a payment history affidavit can substitute for a payment record but it still doesn’t add the value of a verifiable proof. Protect the value of the note by setting up a verifiable payment tracking method today!   

Tracy Z. Rewey has been helping people make money with owner financing (http://www.noteinvestor.com/) for over 20 years. Gain knowledge from a well-known note buyer through real life examples. Article reprinted and used with permission from http://www.noteinvestor.com   

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GREAT NEWS for Note Servicing Center Lenders and Investors. You can now have your monthly distributions deposited directly into your account electronically at no additional charge. Just email Thomas IV at thomas@sellerloans.com or call 209-966-3445 Ext. 13 to set it up. Also, your borrowers or payers can make their payments by ACH automatic withdrawal directly from their bank account on the scheduled day agreed to by both. The set up is easy, the form is available on line just Click Here (http://www.sellerloans.com/signup-package/) or email us for information. Lenders/Investors can get your money faster and borrowers can simplify their life. Payments can also be made on line at the Make a Payment (http://www.sellerloans.com/make-payment/) banner.   

NEWS, VIEWS AND EVENTS:

The NEW SELLER LOAN SERVICING WEBSITE located at: http://www.sellerloans.com is “standing-up” live and well. Ready for you to use. I know you will enjoy this improved innovative and somewhat interactive website. If there are links that do not work on your browsers, PLEASE, let us know. It will be helpful to hear from you. Several pages are still in Beta Testing. Please visit us at http://www.sellerloans.com and let us know what you think and how we can improve our service to you.   

AMERICAN ASSOCIATION OF PRIVATE LENDERS (AAPL) is the only national organization dedicated to the promotion of the private lending industry. AAPL is designed to serve as a catalyst for industry growth, by fostering awareness, promoting best practices, and enforcing a code of ethics. Now you can be a part of this organization and receive all the benefits that other members enjoy. AAPL offers four levels of membership, each designed to meet the needs of various entities within the industry. Just go to: http://www.aaplonline.com.   

THE HUGHES BROTHERS Do you own (or want to own) property? DISCOVER how to protect your assets and keep them private from the public by attending the highly acclaimed Land Trust Seminars below. You will learn how you can start immediately to utilize Land Trusts for Liability Protection, Financial Privacy, Estate Planning and Remote Control Management. Seminar date: April 16th & 17th, 2011 from 8:30am to 4:00pm. Walnut Creek, California. To enroll for either Land Trusts Made Simple or Advanced Class call 888-796-3896. http://www.realestateforprofit.com Look forward to seeing you there.   

The CFE JOURNAL If you have not logged on or subscribed to the CASH FLOW EXCLUSIVE on line Journal, it is definitely well worth the time to take a look. Look for recent articles written by Roberta Standen in the November issue, A timeless and proven trick of the trade and December Where are you now – at the end of your Rope? A new one will scoop in January entitled Use your GPS for Less Stress in 2011.   

For your free copy available via email, contact distribution@cashflowexclusive.com and tell them the Note Servicing Center sent you.   

The NOTE INVESTOR In the current edition of the NOTE INVESTOR, an on-line blog by Tracy Z. Rewey, she offered a new publication authored by her and Fred entitled, “21 Insider Secrets You Must Know Before Selling an Owner Financed Note”. Check it out at: http://www.noteinvestor.com   

The NOTE SCHOOL Personal Mentoring from Eddie Speed and NoteSchool is the perfect path to success in the cash flow business. Eddie, is the recipient of the 2006 Industry Achievement Award and conducts mentoring programs and Training Seminars nationwide. He will be presenting a new seminar series in California in 2011. Contact Roberta at 209-966-3445 Ext. 11 or rstanden@sellerloans.com for advanced information and an opportunity to attend the classes at a reduced price. We look forward to seeing you there.   

PENSCO TRUST MONTHLY WEBINAR will be held on January 5th 2011 – How To Buy International Real Estate With Your IRA. Presented by Bret G. Dudl & David Braga. Learn how to purchase International Real Estate, Pitfalls to avoid when buying international real estate. Click here to register(http://www.penscotrust.com/events/WebAndTeleseminars.asp) The webinar is FREE. Webinars are held on the first Wednesday of each month. For additional Information contact www.penscotrust.com Tell them the Note Servicing Center suggested you contact them.   

Again, please visit our new website at www.sellerloans.com If we can be of assistance to you, remember what makes the Note Servicing Center different than any other Note or Loan Servicing Company. The real key to our success isn’t our size. Rather, it’s the one-on-one relationship we build with our clients, one at a time… one day at a time. We take our business personally; we do business the old fashioned way, by delivering flexible, responsive personal service and customer care.    

YOUR BUILD YOUR BUSINESS – WE SAVE YOU TIME AND MONEY

This email was sent by rstanden@sellerloans.com. To be removed from our list simply reply with “Please drop me from your list” in the subject line.. Note Servicing Center | Post Office Box 87 | Midpines | CA | 95345 | 209-966-3445

1. GREETINGS from Roberta
2. PRESIDENT’S CORNER
3. BE SAFE – NOT SORRY By Fred Hobbs
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5. NEWS, VIEWS AND EVENTS

GREETINGS 

From Roberta and the Note Servicing Center Associates,  The chill in the morning air here in the Northern California Sierra Nevada, reminds us the fall season has officially arrived. The acorns are as big as your hat – a harbinger of a cold and long winter ahead.  Our hope and prayer is that the chill wind in the housing and finance market will warm sufficiently to stimulate investor confidence, expand business, lower jobless rate and provide a head of steam to get the economy moving again before Spring.       

The SAFE ACT and the Wall Street Financial Reform Act has resulted in what many real estate practitioners referred to as the “unintended consequence” of slowing down the housing market, restricting seller financing and over regulating the private money mortgage market. While dabbling in the housing and lending business wouldn’t it be sweet if the Fed’s decided to completely prohibit the exactions lenders impose on a buyer’s assumption of a mortgage with “due-on-sale clauses” in trust deeds. I’m dreaming. When home sales volume finally increases, the Fed will raise short-term interest rates.  Just when buyers want to buy again, they will want to “assume today’s 3.9% to 4.5% fixed rate mortgage loans. You guessed it “Déjà vu”. Lenders will demand increased interest rate and fees. I can hear the screech of the brakes on home buying already.  Yes, I know, determined (or starving) real estate bill try to dance around government regulations which typically results slowing down housing or the Regulators will come up with another Financial Reform Package.        

 I have come to the conclusion the Feds don’t have a clue as to what steps need to be taken to stimulate the housing market and what action puts a damper and imposes restraint on sales. Still a whole lot of opportunity out there though, and we are doing our best to provide you with the tools to take the “grunt work’” out of tracking payments and progress. By the way; I am getting up courage to create a “blog”.  It will be accessed right from our new Website, soon to be live on line. Will keep you posted so you can be one of the first to sign up for an RSS Feed.  Blessings, Roberta          

PRESIDENT’S CORNER

The Note Servicing Center website will very soon be taking on a “new look” with added features specifically geared to meet the needs of our valued clients.  We have expanded to servicing Lease Options and Land Contracts aka Contract for Deed.   Currently, we service loans regardless of the structural complexity or creative and innovative terms or the note.  Lenders View Central is back “On-Line”, providing 24/7 viewing of the account portfolio for our Lenders and Investors.  Thank you for reading our Newsletter. Please visit my “corner” again next month as I have a number of exciting new features up my sleeve to make your job easier and also to save you time and money. We appreciate your business and please contact me personally with your comments and concerns. My door is always open.  Email tom@sellerloans.com or call 209-966-3445 Ext. 11. I look forward to hearing from you soon.            

BE SAFE – NOT SORRY By Fred Hobbs

Are you confused about the SAFE Act and how it may affect the way seller financed transactions are handled in the future?  Don’t feel alone, nobody seems to have a grasp on the relatively short (compared to the Dodd – Frank H.B.4173) National Safe Act model. The model for states to adopt was brought about, to provide relief to buyers of residential property from supposedly unscrupulous lenders and brokers. This relief is in the form of documented disclosure of sale terms, and oversight of qualification of a buyer’s ability to repay under the terms of the agreement.  It is thought that this Act would, among other things, reduce potential defaults on residential property and restore property values to former levels, as well as inform borrowers of the details of the transaction (remember all the stacks of paperwork you signed when you purchased your property typically not read?) The SAFE Act was implemented as a model uniform national code for auditing these transactions through the various state regulated Finance Code laws already in place. In most states this auditing is administered through licensing of individuals engaged in the activities of Residential Mortgage Originators for regulated loans.  The SAFE Act adds seller financed transactions as a regulated transaction. Therefore, a person or entity that initiates a seller financed note on a residential property must….  Click here to finish this article 
 

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Good News for Note Servicing Center Lenders and Investors:  You can now have your monthly distributions deposited directly into your account electronically at no additional charge.  Just download the form by clicking here, email Thomas IV at thomas@sellerloans.com  or call 209-966-3445 Ext. 13 to set it up.  Also, your borrowers or payers can make their payments by ACH automatic withdrawal directly from their bank account on the scheduled day the borrower chooses, click here for the form.  The set up is easy by completing and signing a simple form.  Let us help get your money to you faster and better service the borrower without paper work or checks in the mail.

NEWS, VIEWS AND EVENTS: 

             The NEW SELLERLOANS.COM WEBSITE…. Located at: www.sellerloans.com is at long last “standing-up” live. Please be aware it is in “Beta Testing” and we are correcting links and errors on a daily bases.  Within a week the site should be functioning correctly in most aspects. I know you will enjoy this improved innovative and somewhat interactive website. If there are links that do not work on your browsers, PLEASE, let us know by emailing pam@sellerloans.com. We will enjoy hearing from you. Roberta’s blog is not ready to launch as yet….but when it does, we are going to have some fun. Please visit us at www.sellerloans.com. Many of the new features are a result of your requests and suggestions, which we greatly appreciate.                                  

              NOTEWORTHY CONVENTION: Attending the 24^th Annual NoteWorthy Convention is set for November 4 – 6^th in New Orleans. It may very well be the KEY TO YOUR SUCCESS IN 2011.  Although the economy is in turmoil, you will rub shoulders for three full days with some of the most successful cash flow professionals in the industry today.  Investors, funders, educators, partners and experienced dealmakers will all be there too to show you how to not only survive, but thrive in this economic environment.  Opportunities exist, come learn how and where to find them.           

The Note Servicing Center has arranged a special discount to help you take the leap to attend.  We encourage you to join Tom and I as well as others who support NoteWorthy and also enjoy a 20% discount on your registration.  Simply go to the following website to register.  http://www.eventbrite.com/event/472454123/Noteworthy2010/7040934937/?discount=20discount2010                 

             The CFE JOURNAL: If you haven’t tuned in and logged on or subscribed to the CASH FLOW EXCLUSIVE on line Journal lately, it is definitely well worth the time to take a look.  Whether you are a cash flow specialist, interested in buying or brokering private notes or just plain curious about the cash flow business, the CFE Journal may open more doors of opportunity for you.  The articles are written by successful professionals in the business. If you are interested in receiving a copy of Cash Flow Exclusive via e-mail, send your name and e-mail address to request@cashflowexclusive.com , and your name will be added to the list.                   

            The NOTE INVESTOR:  I noticed in the current edition of the NOTE INVESTOR, an on-line blog by Tracy Z. Rewey, she offered a new publication authored by her and Fred entitled, “21 Insider Secrets You Must Know Before Selling an Owner Financed Note”. Check it out at: http://www.noteinvestor.com                          

             The NOTE SCHOOL:  Reserve your seat and register! Call Today!
October 29 – 31: Rich Rewards in Real Estate Notes – Houston, Texas Call Duane: (888) 847-9353 or email at: Duane@NoteSchool.com  for further info or go to http://www.noteschool.com/richrewards  to Sign up.  The next two classes are in:      

•  Houston, Texas   Oct 29^th – 31^st
•  Dallas, Texas        Dec 10^th – 12^th

This intense, three-day workshop will teach you the most advanced techniques, tools, and tips in the industry, so that you can turn prospects into customers! When you contact Duane and let him know Note Servicing Center sent you and you will receive a “Huge” Texas style discount!                

            PENSCO TRUST MONTHLY WEBINAR: On the first Wednesday of each month, PENSCO Trust hosts a free live Webinar. (Click here to register for the webinar.) If you missed any of the Webinars you can now access them right from our Website, by clicking on Useful Links (click here) and then on Pensco. They post the recordings and corresponding handouts for each session in their EDUCATION SECTION. This way you can listen and learn at your leisure! For additional Information contact www.penscotrust.com