You may have heard by now that in the middle of August 2005 Western United Life Assurance Company (formerly Metropolitan Mortgage and Securities, Inc) closed its doors. After over 50 years of purchasing real estate secured notes and being my favorite funding source for the 14+ years I have been in the business we were shocked and saddened when we got the news. All of the people I have ever dealt with from the Presidents, Vice presidents, Contract Buyers, Coordinators, Closers and Specialists were always extremely helpful, courteous and straightforward. They were not just a funding source they were my business partners. I had met the majority of the staff over the years at different conventions and meetings and I truly feel as if I am losing a friend.

Of course, things change and we as consultants have to keep changing with them to keep our businesses thriving. With WULA’s doors closing it got me thinking of which other funding sources could fill their shoes, so to speak. I also thought about why they were my favorite funding source for so many years and what qualities they had that I would look for in a "replacement" funding source. So I came up with a few qualities that I think about when considering a funding source.

Is the funding source on my side when doing a transaction? In other words do they do everything possible to try to make the transaction get to the closing table and actually fund or do they look for reasons not to do a transaction. When I call them for an update or to ask a question are they happy to hear from me (because I am bringing them business) or am I bothering them?

Are they flexible as far as different purchasing options? In other words will they do partials, splits, remainders, half payments, etc or will they only purchase the entire note? This is a need to know question. In the last several years the majority of my transactions have been some type of partial option.

Does the funding source try to dictate my negotiated commission if it is within reason? Or do they tell me what I can make otherwise they won’t do the deal. We as consultants do a lot of work before they even see the transaction and we have a right to earn a respectable fee. I agree that ‘pigs get fat and hogs get slaughtered’ and when a fee approaches 20% I think you can be considered a hog.

Do they respond within 24 hours when I submit a completed worksheet to them for pricing options? This is crucial for me. I need to get back to my note holder as quickly as possible with some options because the seller’s don’t want to wait. If I fax a worksheet to a funding source directly to the person responsible for quoting and I don’t hear from them for two or more business days I may not even attempt to get a quote from them again.

After a note holder has accepted a price from me and I have collected all of the necessary copies and documentation will the funding source handle the due diligence process (such as credit checks, ordering the appraisal, ordering title, etc)? I like to focus on finding more notes and getting more note holders to say yes. I really don’t want to spend my time processing a transaction unless I am buying it for myself.

I also like to know if the funding source is a direct funder or just a middle-man. Are they using their own funds? Do they borrow their funds to purchase the notes? Do they bank the notes with an institution and need their approval before funding? I do not want to be in the position of having my note seller wait 3-6 weeks for due diligence only to be told that the funding source did not get approval to bank the note. I lose credibility and so does the funding source.

In addition, I like to find out if they prefer a certain size of note, in a certain area or of a certain property type so that I do not waste their time or my time sending them worksheets that they don’t want to look at.

Every funding source has their own personality and one of our tasks as consultants is to try and figure out which three or four funding sources work well with you. WULA’s personality fit me perfectly. I am thankful and even grateful to WULA and its employees for everything that they have taught me and for having them as a part of my business for all of these years. There are several other funding sources that I currently use that are also are a perfect fit to my business and they will be seeing many more transactions from me due to the closing of WULA. This note broker/consultant will sorely miss the institution that was the contact buying division of WULA as well as the people that worked for them.

Jeff Armstrong is president of Armstrong Capital. He is a member of the Million-Dollar Club, a Master Broker, visiting instructor for the American Cash Flow Institute, and the author of three best selling books. He can be reached by calling 818-865-2322, faxing 818-865-2323, e-mail jeff@armstrongcapital.com, or visit armstrongcapital.com and click on "Note Brokers" for questions and information about his free monthly email newsletter, Master Broker services, Mentorship program and how Armstrong Capital can help you succeed.