Buyers Are Liars

Buyers are liars. I speak the truth and nothing but the truth.



I’m sure if you’ve been in real estate longer than a day, you have had someone approach you claiming to have millions of dollars to invest in real estate. My experiences have led me to this theory. The more money they claim to have, the less likely the deal is to ever come to fruition. And that is the direct correlation. In this day and age of buying and selling nonperforming notes, I have been present on conference calls with 5-10 people present and consisting of several buyer mandates AND seller mandates. If you hear the word mandate or rep and/or see +3 on any document, start running!!!!!
Back to buyers being liars… Case in point, we have a portfolio manager in Tampa, FL who was approached by a buyer’s mandate. She mentioned my name which led to this buyer’s mandate googling me and sending me an email to go around our portfolio manager. Awesome. First strike… From there she said she represented a group of 4 investors (very “big” people supposedly) that had 3.2B to spend on discounted bank notes where transactions had to be a minimum of 20M each. Apparently, this group purchased 2.78M in NPN’s during 2010. I explained that we are a full disclosure company and are happy to show LSA’s (loan sale agreements with the lender showing that we are DIRECT to the lender and how much we have the note under contract for) but that we wouldn’t be giving out our direct contact at the bank. That one contact is a perpetual cash cow for us, as long as they are selling nonperforming notes. She responded that we could sign a NCND that would last for 3 years with 1% commission on each deal with the lender where we GAVE UP our contact with the bank, so this group could have direct access to the lender. My response was, “Absolutely not interested… Sorry!” Funny, no response from her…



Here is my email to her the next day:



“I think the only thing that will work is for your group to purchase our database of 300+ asset managers with direct phone and email for each one. We have been given pools and have bought nonperforming notes from most all of these contacts. We are happy to get a NDA in place for your investors, so they have direct access.



We have NEVER sold this list to anyone, but we have been discussing in the last month. Then you popped up with your 3.2B buyer, and it seems it might be a good fit. For $5,000 per contact they can buy notes from and be DIRECT to the lender with an infinite rate of return to never have to pay 1% to us on each of their minimum 20M deals. If they ONLY did one 20M deal each year with one lender, that's a $200,000 commission per year they DON'T have to pay us. That over the next 20 years totals to 4M for just one lender they are working with.



5k seems too cheap for a $3,995,000 savings... Anyway, if they DO have 3.2B, then 1.5M for our contacts that we have worked 2+ years to build is a drop in the bucket. You mentioned they did roughly 278M in purchases last year? On their scale, that would have been a pay out just to our side (1%) of 2.78M. Just by buying our list for next year and only duplicating sales, not increasing, they SAVE 1.28M.



And if they do this another 20 years, that's 19 years at commissions of 2.78M a pop totaling a 52.82M SAVINGS. Sounds like a no brainer...”



Pure logic tells me that if they DID have 3.2B, why are they calling us??? Why don’t they just hire someone on staff to call banks like we do so they CAN be direct to the lender??? That way they completely bypass having to pay commissions to anyone… For so many reasons and on so many levels, buyers are liars. So, we use this form to qualify buyers claiming to have 10M or more as actual institutional buyers. And let me tell you, we have weeded out so many “liars”. 



The NASDAQ PORTAL Market

SM



Rule 144A Qualified Institutional Buyer

(“QIB”) Certification Form



In connection with its application to register as a PORTAL Qualified Investor pursuant to NASDAQ Marketplace Rule 6506(a), the Applicant hereby submits the following information to demonstrate that it is a Qualified Institutional Buyer (“QIB”) and eligible to purchase securities for its own account or for the accounts of other QIBs.