Scaling New Heights in 2005

According to a recent study done by Freddie Mac, estimated number of US households will expand by 1.3 percent each year for the next 10 years generating 100 million home loan transactions. With Interest rates at an all time low and the homeowner national homeowner rate is expected to jump from 68% today to 70% in 2010 with more than 2 million households now rented becoming homeowners.

What does this level of demand mean to us in the discounted note business? Well, we've seen it happen before. There is a flip side to all this new home activity. Think about it. Thousands and possibly millions of homeowners will be hocking their equities with private trust deeds to pay off high credit card debts. Research tells us that most Americans are only 3 months from bankruptcy carrying high credit card debt. Interest rates have already begun to rise as we speak and many borrowers boarded variable interest mortgage loans during this dash to home ownership. Even now, homeowners are cashing in equity for cars, vacations and other properties.

Also, as the demand for houses increase, so does the demand for vacant land. These land sales almost always involve private seller financing from sellers who would actually rather have cash. The high and rising cost of conventional construction has caused a burgeoning mobile home development both on land and in mobile home parks. At the same time the financing for mobile homes have all but dried up, with older models on land even more difficult to finance. I submit there are millions of dollars in mobile home paper floating around in the market place.

Additionally, as most of us who have been in the business for years recognize, there is and historically has always been a demand for owner and private financing for properties that do not qualify (non-conforming) for an institutional loan, for buyers who do not qualify for loans as well as private loans secured by commercial and industrial properties and seller financed notes on farm and land property.

An investor of ours once said that contrary to common belief, that the world really did not turn on its' axis, but rather spun around because people were continually moving and changing locations. That may be absurd, but it is true that as long as people keep moving, being transferred and relocating or trading up, down or sideways, there will be a need to either give or take a note. These combined situations guarantee a continual substantial proliferation of private notes in the marketplace. We have every reason to be optimistic. As a loan servicing company for over two decades, we have seen the real estate and note market boom and bust at least three times, and yet we continue to grow. Without notes we simply do not have a market. Guess, what? We're still here and growing. Rest assured with confidence that the note business has never been better.

As in any other market, when the note market is hot there is a tendency to take things for granted - to stay in one specific section of the market too long, to stop looking for new products, new opportunities, to investigate new areas. An example would be to overlook that burgeoning mobile home note market we were talking about, business notes and other cash flows. Entering multiple markets will give you new places where it may be easier to grow your customer base. Networking will allow you to cross-pollinate with other professionals in allied business. We are in the age of diversity so continually be on the lookout for new, exciting and potentially profitable opportunities that appear on the horizon. Be sure your business model is flexible and extensible.

Get a Firm Foothold on Financial Freedom 

As you climb to a higher plateau, think about your own financial future. When the note market is hot there is a tendency to keep earning those big fees if you are a "broker" or margins of profit if you are a "consultant or finder/flipper". No time is budgeted or set aside to become in involved in the hard work, the "due diligence" and math involved in the building your own note portfolio. After all, over the long haul, isn't financial independence the real objective of being in the note business? Know the basics - you don't need to know everything but continue to learn so that you can recognize and seize the opportunity to begin to build your own note portfolio. Build your retirement by putting the Note into your self directed IRA. 

Stay flexible. Find ways to be proactive, rather than reactive. Try to focus on the positive aspects of whatever economic cycle we are in. Willingness to move into new areas

Intimidated by new challenges. Some things are best when there is a surprise inside, but your investment portfolio is NOT a box of crackerjacks. Not preparing for a crunch, not preparing for the market to turn. 

Prepare Yourself for the Twist and Turns 

Look around as you climb and keep your "feelers" out. No one knows when the next paradigm shift is going to occur for new ways to market your business. The Internet made a gigantic impact on the way we do business. Some entrepreneurs may think the party is over, after all how much further can we go in terms of new marketing methods and new ways to do business. I simply don't buy into this idea. The Internet is simply a signal that the party has just begun. There is no "dead end" to the information highway even though there may be a detour here or there. No matter how this business changes, it still comes down to the broker/note consultant who knows and understands the business and how to use each and every technological tool available in the 21st Century.

 Don't look Down 

Once you've started to scale to new heights, for heaven's sake don't dare look down or look back. Fear of falling or loosing your grip with keep you from taking the next step. I've witnessed so many who have started out with a "bang" and then something happened, maybe a short-term failure wiped them out. Success is not certain, but failure is never fatal. If you slip, don't look down or fall down, just catch your breath, get a fresh grip, keep your eye on the prize and keep climbing. Take the attitude that "if it is to be, it's up to me". Concentrate on your goal, develop your strategic plan and keep on track - everyday. 

Lighten your Load and Dump your excess Baggage 

Stop doing things the way you have always done them. Define your service with a Web presence and a high speed Internet Connection. Save postage with an E-mail newsletter (E-zine) Get rid of the high cost of old fashion telephone communication and conferencing using long distance providers like Global Crossing. Look into automated dialing to Voice Mail boxes and automated faxing for marketing. We have eliminated totally our long distance carrier with a combination of prepaid calling cards, automatic dialing and cell phones. We can now expand our market, save overhead and manage our time more effectively. Take advantage of technology and learn about what is coming next on the horizon. 

When you think of the ways to free yourself from the "grunt work" and from needless expense and wasted hours may I suggest you think of Note Servicing Center to provide servicing for your notes and other cash flows. We've been scaling a mountain all year investigating new and better ways to assist the note professional and support the cash flow business. 

Note Servicing Center is a third generation loan servicing company and In 2005 we are stretching and scaling into "higher ground" with the addition of two family members in management positions. Check out our web site at www.sellerloans.com for an introduction to our grandson, Thomas K. Standen IV and daughter-in-law Pam Standen, in charge of Marketing. Also, a new enhancement has been added whereby Lenders and Borrowers can now review their account "On Line" 24/7 using our password protected server. Call and ask Pam about this. 

Remember: "The Higher you go the Better the View" 

COPYRIGHT 2002, 2006 by Roberta M. Standen - ALL RIGHTS RESERVED
This article cannot be reprinted without the express permission of the Author - 11-06