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Tracy Rewey – 25 Year Investor in Seller-Financed Real Estate Notes Talks

seller-financed cash flow businessOrlando, Florida – This month’s PID Lab Expert Interview is with Tracy Z. Rewey. She is co-owner with her husband, Fred, of Diversified Investments, Inc., co-publishers of two blogs, NoteInvestor.com and FactoringInvestor.com and co-authors as well. Yes they make up a dynamic duo in the cash flow industry. Tracy gives us insights on the topic “Building a Cash Flow Business that’s True to Its Name.”

As I listened to the honesty and simple game plan that Tracy shared with me on this call, I was saying in the back of my mind…

“Where were you Tracy in 2006, when I was unwittingly hoodwinked into paying out nearly $15,000 to get started in the cash flow business?”

I was remembering that unforgettable day way back in October of 2006. In the wee hours of the morning around 2:00 am, I stumbled upon an infomercial on TV that was pitching the success you can quickly have in the cash flow business.  Seeing this as a passive income opportunity in the real estate industry which at the time I thought was a perfect business model for me, I bought into it all the way.

I flew to Colorado on two training conferences for hands-on training. I went home and created a business plan, mailed post cards to note holders, visited my local county recorder’s office once a week with my spreadsheet and note pad in hand, learned the complex functions of a financial calculator, all the while anticipating landing my first deal. After buying into all the sales pitches I heard pitched on behalf of the Dalbey Institute thinking I was going to get rich quick with seller financing real estate note investing, I spent a year trying my hand at it and made no money.

That was an expensive $15,000 lesson learned!

I just had to concede one day that I did not fully understand how much work and learning was required to make it in the cash flow seller financing real estate note business.

Thanks to Tracy, in this interview, she made it clear what it takes and shows people how to take it step-by-step to increase your odds of success right out of the gate.

I know few people understand the world of seller-financing. Since I personally think that it can be a lucrative stream to build as passive income, I want to introduce it to you as a real possibility.

So first, I want you to get the insider knowledge from Tracy who has spent 25 years generating substantial income in the cash flow industry primarily with seller-financed real estate notes.

I opened the interview with this question for clarity and to make sure we start on the same page moving forward in the interview:

“Tracy, would you explain to our listeners what is the cash flow business and what does it entail?”

The cash flow business is about trading money in the future for money now. Someone’s receiving payments and they don’t want to wait around for those payments over time and they’re willing to sale it today at a discount. That can take on a couple of different phases. In the world of factoring, that’s where people exchange invoices or receivables – a payment in the future – for cash now.  That would be more of a business to business transaction. And another place that it happens is in the seller-finance note world. So you have a seller who sells a piece of property or real estate and they allow the buyer to make payments to them over time. So they “take back a note.”  The seller is going to be the bank basically.  That seller may not want to receive payments over time anymore…maybe he never wanted to in the first place. He just did it cause he had to. So they can sell all or a part of those payments – those future payments at a discount. …And that also takes on other areas as well,… structured settlements, annuities, prize winnings, mobile home notes, auto notes,…we see a lot of people working with non-performing delinquent debt right now. That’s a big part of the market. It can take on different facets but it all comes down to exchanging money in the future for money now. And my primary area of expertise has always been the seller-financed note business.

Listen to this excerpt – “Building a Cash Flow Business that’s True to Its Name”

 

 

Click HERE to DOWNLOAD this full interview with Implementation Guide with Tracy Rewey in the PI Development Lab.

Tracy enlightened me to the fact that seller-financing was just one avenue of income that the cash flow business offers. So you have many options to investigate when considering the cash flow business.

Tracy, what makes the cash flow business so appealing to someone who wants “passive” cash flow?

I asked Tracy this question to shed light on how the seller-financed note investing business in comparison to the typical real estate business can deliver passive real estate income.

Tracy: Anyone who has been into real estate are knows about the 3 T’s – Tenants, Toilets and Trash. The nice thing about being a note investor is that you are going to be the BANK. So if something goes  wrong with the property, the owner of the property – payor of the note, its’ his job to fix that….It still takes maintenance and management of deal but its not as hands-on as the real estate world.

When starting out in the note investing business just like anything else, there is a learning curve. To insure your success, you will need to invest in some education. Tracy advises that the best place to start anyone new to the industry is at the beginning. Start out as a note broker first, she suggests. That is, a person who finds a note that a seller wants to sale then refers that information to a note investor. By doing this, you will one: learn from the inside how the note investing process actually works and two, you can earn while you learn.

Tracy goes on to give the top areas you need to be most concentrated on and a step-by-step breakdown of how to develop a cash flow business that can generate substantial passive income.

“But Tracy…”

I had to ask the question that everybody is thinking when it comes to considering any type of business that claims to be very lucrative.

Me:  “…Can anyone do this or does it take a special type of personality?”

Tracy: I use to say people who has real estate background, people have mortgage background, but actually over the years people I’ve guessed would succeed didn’t and people I wouldn’t have guessed have.  So I think what it comes down to is,,,

  • A willingness to learn
  • An ability to be creative – to find win-win solutions between the seller and investor to protect your investment
  • Be persistent
  • Be able to find value in things that maybe other people overlook

So if you have ever considered getting into real estate the easy way, seller-financed note investing is a profitable real estate income opportunity worth looking into.

To learn more listen to this Expert Interview with Tracy Rewey –  “Building a Cash Flow Business that’s True to Its Name” – in the PI Development Lab.

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I asked Tracy a few critical additional questions that I didn’t have enough time during the call to include. The insights she gave can steer you in the right direction right out the gate if you think seller-financed real estate note investing is the business for you. You can avoid the mistakes and pitfalls that just don’t work. At the same time, you can get a jump start to success in the seller-financing cash flow business with the action steps she recommends you follow through with immediately…

Like today.

Here is what she had to say.

Me: What’s the biggest mistake you made getting started in the cash flow business

Tracy: Thinking every deal had to close. While persistence is important there are times to step back and let things unfold… or just step away completely. Not every seller will say yes and not every deal is worth of pursuing. I once closed on a note without current property insurance and literally paid the price. It makes for a great story but it was a costly lesson!

Me: What big mistakes do you see others make?

Tracy: We work hard to educate people so they know to avoid these mistakes:

  • Poor marketing
  • Thinking this is a get rich quick business
  • Participating in “daisy chains” where they are not direct with the note holder
  • Not Being Able to Answer, “Why Is The Note Holder Selling?”
  • Lacking knowledge of the financial calculator and all the ways to purchase a note
  • Quoting without seeing documents
  • Closing without title insurance
  • Failing to verify taxes and insurance are current
  • Not working with qualified legal and tax advisors
  • Forgetting to keep the original note and any endorsements in a safe place

We are not attorneys or financial advisors so we don’t give legal, tax or investment advice.  We do share our 25+ years of experience to help people learn the business and avoid the mistakes.

Me: What are some realistic long-term and short-term goals that our listeners should set to build a successful cash flow business in general?

Tracy: The great thing about the cash flow business is you can learn while you earn. You can earn a referral fee while you actively learn the business.  Then when you are ready you can look at buying notes as an investor for more passive income.  These are some important goals and milestones:

  • Learn the note business
  • Implement a sustainable marketing plan
  • Develop a list of note buyers
  • Quote your first deal
  • Refer a deal to gain hands-on knowledge (and earn a referral fee)
  • Understand due diligence procedures and what laws might apply
  • Learn the time value of money
  • Buy your first note
  • Setup a self-directed retirement account for tax advantaged investing
  • Protect your asset with servicing procedures

Me: What’s the first thing you recommend our listeners do after they’re done listening to this call to take the first steps in starting a cash flow business?

Tracy: Learn the business, develop a marketing plan, and take action! A great first step is downloading the free eBook on The 5 Ways to Cash In On Notes at NoteInvestor.com.

Click Here to subscribe to the PID Lab.

When you subscribe to the PID Lab, you get indepth insights and actionable steps to get started in the cash flow business.

You can personally connect with Tracy at http://noteinvestor.com/bookstore/ to get some expert education from her bookstore with this 10% discount coupon code: pilab10

More about Tracy Z. Rewey at www.noteinvestor.com.

Join this Off The Klock™ blog discussion and leave a comment below about your thoughts on this post:  Agree or Disagree? Is seller-financed note investing a worthy business to investigate…? Do you have any experience in this niche that you would like to share? Comment below.

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About Louise Campbell-Anthony

I am Louise Campbell-Anthony, the publisher of OfftheKlock.com. I have a keen interest in working toward economic freedom through cooperative economics. I have developed an innovative approach to people being able to pursue their passions with unlimited financial resources at their disposal through what I have termed "income cooperatives." I am a stay-at-home mom of 10 children, married of 24 years to my husband, entrepreneur, student of personal development, and naive enough to believe in the possibility of ending the cycle of "brokeness" for people who can believe with me. Author & Publisher

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