The best magazine
- 1). Train yourself and become familiar with the business by contacting a note buyer who has several years of experience in the field. Search "loan brokers" on the Internet and contact professionals who work in your area. Express interest in buying a car note from one of the brokers and listen to his explanation of the business; make an appointment to visit his office and ask for his advice and opinions regarding the field. This will help you learn whether you have the aptitude and interest for the job.
- 2). Develop a company identity by establishing a business name, registering it with your state's secretary of state and opening a place of business -- even if that place of business happens to be a single-room office in your home with a computer and printer. Obtain a business license if your state requires one for loan brokers. Dedicate a phone line to the business and order business cards, stationery and envelopes with your name and logo. Get a business bank account.
- 3). Search for note sellers and investors and offer to refer them to note buyers, negotiating a finder's fee for the service. You can find interested sellers by contacting car dealerships that finance loans as well as local credit unions and smaller banks with loan departments. Find investors by scanning Craiglist and other online advertising for individuals or businesses interested in business opportunities or passive investments. Car note brokers have to cold call, draw out information and negotiate; this will train you in those needed skills.
- 4). Buy a car loan note from one of your contacts and initiate your new portfolio of loans. You will buy the note at a discount to its face value; if the outstanding amount due is $10,000, you reduce that amount in the range of 10 to 30 percent to compensate yourself for the time delay in collecting the money. You are free to keep the note to earn the income, sell the note to another broker or buyer or manipulate the payment schedule (within the lending laws) to increase your income and speed up your repayments. Contact buyers and discuss the note with them; negotiate a sale or just get a feel for current rates and demand.
Source: ...