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Investing Strategies

Creative Dealmaking: The Help

helpJack Sternberg – the man who brings us The Noteworthy Newsletter – has been kind enough to rip back the veil shrouding the note business, helping Mogul readers get a full-on immersion into one of the hottest, least-known profit centers in real estate today.

During the last few months, Jack has told us about a variety of his favorite creative dealmaking strategies (each with its own creative name), including:

In today’s main event, Jack introduces a creative process he likes to call “The Help.”

If you need a refresher course on any of Jack’s previously-discussed strategies, then this is the perfect time to pause and revisit his last few lessons.  And if you share our fascination with clever tricks-of-the-trade, then today’s lesson will be perfect for you!

The Help

Mogul: What exactly is “The Help”?

Jack: “The Help” is one of my favorite strategies for making money with notes. Basically, it is nothing more than helping homeowners with loan modifications for a tasty fee. If one of your Mogulites wants to become a “go-between” (ie. someone between the homeowner and the lender), he or she can try to get a loan modification done or get them out of a note altogether. And they can do this for a fee.

dogMogul: That’s it? It almost sounds like this is stupid simple. Is it?

Jack: Yes, it doesn’t get much easier than “The Help”. Really. That’s all there is to it. Borrowers don’t understand how to get a loan modification done. Lenders are under the gun to make it happen for deserving borrowers. So “The Help” really is the perfect way for you to make money without having to invest anything more than a little bit of your time in getting a loan modification done.

Mogul: Can just anybody do “The Help”? I’ve heard that Attorneys General in several states, especially in California, are cracking down on people doing loan modifications for a fee. Is this legal?

Jack: First, I’m not a lawyer. So you’ll need to see if your state has any special legal requirements or licensing standards for anyone doing loan modifications. Next, in almost all cases, the authorities are cracking down on loan modification scams. The way around that is to not run a scam; to be honest in the way you handle loan modifications using “The Help”. Don’t ask for money up front. Set it up so that you only get paid if the loan modification goes through… and make sure the lender is the party who pays you. While not everyone will want or need to be a licensed real estate agent, some of the most successful people who use “The Help” are licensed. Again, your state might have special requirements.

Mogul: How much competition is there in the industry for “The Help” as a strategy? Is it wall-to-wall competition? One of the things we like to do here at Real Estate Mogul is turn people on to awesome investing strategies that aren’t the Flavor of the Month. How does “The Help” stack up?

catJack: None of the note strategies we’ve talked about in this series is what you might call “mainstream”, and this includes “The Help”. While there are things you need to understand before diving into note investing, once you do there's a whole new world opened to you. Just like the others, “The Help” makes you think. Once you do, the sky really is the limit.


Do It To It! Immediate Action Steps

This strategy doesn’t involve investing a penny of your cash in a note. Instead, you invest just a little bit of your time to help deserving homeowners modify their mortgages so they don’t have to risk foreclosure.

Implementing “The Help” is ridiculously easy:

  1. Locate a Needy Homeowner – Locate a homeowner who is behind on their mortgage payments and could benefit from a loan modification.
  2. Act as an Intermediary – Act as an intermediary between the lender and the borrower.
  3. Negotiate New Terms – Negotiate the new mortgage terms for the borrower.
  4. Collect Your Fee – Collect a tasty fee from the lender when the modification is complete.
  5. Check for Legal Hurdles - Remember, CYR (Cover Your Rear). Make sure your state doesn’t have any weird legal hurdles to cross before you can do “The Help”.
It’s just that simple. Now it’s your turn!

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