American Cash Flow Association

The following article was submitted to us by Mr. C. B. of New York who alone is responsible for its contents.

Mr. C.B. is a professional engineer by trade. He has a BSEE from PennState, plus graduate work at various universities.  Also ex-Navy.

According to him, his experience with the American Cash Flow Association was a disaster that has had a severe financial impact on him.

His experiences may or may not be typical of the results other people may have achieved with similar training. Mr. C. B. was requested to be truthful in this article, but we have not been able to verify any of the facts ourselves.

I first started to think about a career change while refinishing my basement. Near the end of this project, I had two weeks straight of forced time off from my job as an electrical engineer due to appendicitis. This time off afforded me a chance to focus inwardly instead of being totally focused on my job in an environment straight out of the Dilbert cartoon. The cubicles made me feel like a mouse in a maze, from which there was no escape other than death or retirement.  

I had formulated a plan to finish my basement for the purpose of a getting a good refinance appraisal of my primary residence. I planned to leverage the proceeds to invest in real estate. The refinance was successful so I began to follow through with my plan by looking for a “fixer upper” that I could rehabilitate with my own hands. I planned to get a chain of these rehabs in motion, by buying multiple properties in the future, rehab and resell them for a tidy profit.  I planned to do this in my spare time, with the help of subcontractors.  I thought this plan would help me be ready for an early retirement when the opportunity presented itself. I was especially motivated since the men in my family tend to die young from heart disease, and I was determined that I would not expire at the office. 

Thus I was especially vulnerable to the lure of a newspaper ad placed by the American Cash Flow Association  for a free “cash flow” seminar in my local area. I can’t recall the specifics of the ad other than its strong appeal to try something, which would allow me to quit my job, and work for myself with a much greater financial reward than I was accustomed to with my $75K salary as an electrical engineer. It also sounded much easier and less complicated than my course of action to rehabilitate houses for a profit. Another hook was the proposition that the American Cash Flow Association  “did not have enough cash flow consultants” working in our local area. Thus, it was quite enticing to know ahead of time that there would be very little, if any competition locally.

My wife agreed to accompany me, and off we went to a free seminar to seek our fortune. There were about thirty-five members in the audience, while there were about six representatives of the American Cash Flow Association including the featured speaker, “Mark”. Although there was mention of opportunities in over 66 different cash flow streams, the focus during this free seminar seemed to be for the note-buying business. Mark’s presentation comprised his personal biography, an overview of the opportunities in the cash flow industry, and his own experience.

With the use of an overhead projector and an assistant, Mark flashed numerous examples of checks he had recently received from his numerous deals. Mark spoke of making deals while he was on a ski vacation and also noted how wonderful it was to be able to schedule a vacation without having a hard return date. In other words, Mark eloquently painted a picture of a permanent vacation from the ordinary life we members of the audience continued to live. Mark spoke fondly of his daughter and how he was able to coach her softball team as one more example of all the free time he has making his living buying and selling mortgage notes. Near the end of his presentation, Mark divided the audience and pitted the two halves against each other in a chorus of exultations which ended with chanting of “Get the check!” to every question he asked of the audience.  

Actually, there were three American Cash Flow Association representatives waiting at the back of the room, ready to “get the check” from us. I know there were about a half dozen people in line with my wife and me, while I waited to signed up on the spot with my wife’s checkbook to the tune of $2995 (discounted since I was signing up the same night as the introductory free seminar) worth of training for a three day weekend at a Marriott hotel located about 40 miles away from the free seminar. Often I rue the fact that this is equivalent to the cost of a technical course at an accredited institution of higher learning, which would have been relevant to my job. I noticed other individuals were using their credit cards to pay for the training. I felt sorry for one forlorn older gentleman who obviously did not have the funds to take advantage of the great opportunity being dangled in front of him.

 One method of marketing in particular was emphasized repeatedly: the need for an Internet presence via a web site. It just so happens that the American Cash Flow Association is in the business of selling web sites. They had a package deal for their own “Web Partner 4.0” which included a year of free mentoring from a web site “expert” who would walk you through the initial setup and subsequent maintenance. The web site they pitched was chock full of templates where all you had to do was fill in your own company information and - Voila!, you created your very own web site. The American Cash Flow Association instructors emphasized the indispensability of this fabulous marketing tool. Naturally, being a computer literate professional, I recognized a sophisticated marketing product when I saw one. Of course, other American Cash Flow Association representatives were staged at the back of the room prepared to take your discounted payment of only $3995.

 (Note from mortgage-investments.com. Our associate company will create, design and host a similar web site for Note Brokers for just $139 a year! www.buysnotes.com )

That’s right, before my note broker training was even finished, I invested roughly $7000 dollars in my new career as a Certified Cash Flow Consultant. At the end of the training I was to be awarded a certificate of training and credibility in my new career as a “Certified Cash Flow Consultant (CCFC)” and was told to sign my future correspondence with the suffix “CCFC”. What else did I get for my money? Some books, and a financial calculator. 

The three-day course started on a Friday and ended on Sunday, very convenient for those of us in the audience who held full time jobs. I estimate that there were about a hundred members. The majority were professionals like myself. There were two featured speakers who split up the task of teaching us about the cash flow industry. The training mix was about half focused on real estate note brokering, while the remainder of the time was focused on factoring. Both of the speakers derived their sustenance from the factoring business, so in retrospect I don’t know how effective it was for them to be trying to teach anything about the note brokering business. 

The American Cash Flow Association representatives did not properly explain that there are probably literally thousands of note brokers chasing a limited number of notes. Frequently, in conservation with note holders, the prospect would mention that my direct mail letter was only one of dozens of similar letters. I felt lucky that my particular letter was even opened by any particular client. By the way, for the one deal I did consummate, the seller stated that he went with me because I was the only note buyer who actually signed the letter. I really had initially been naïve enough to think that note buying was an almost untouched field and an easy path to riches, simply because I myself had never heard of buying notes before. No specific income statements were ever implied by the American Cash Flow Association representatives, but I certainly had a clear impression that if one diligently applied oneself, this was a job replacement career move.

 To be fair, the representatives teaching the seminar cautioned that most people started out on a part time basis while maintaining their full time job. My own job kept me away from home about twelve hours a day with required time on the job and commuting time. I concluded that my job would not allow me to pursue this new business of real estate note brokering, or even factoring for that matter. I made a spot decision that I would go ahead and quit my job, since I had enough to live on according to my estimates, for about nine months from the refinance of my primary residence. Surely that would be enough time to get a new business off the ground and paying the bills and probably a giant sized SUV for the whole family to ride around in to our future vacation spots. 

No one had really explained the marketing costs that I was likely to incur to produce any significant response rate. In my first mailing, I stuffed with my letter a business card, a 3x5 card with which the recipient could order a “Note Owner’s Manual”, and an envelope to mail the order card. The postage came to sixty cents per mailing piece, or $300 total for just the postage. Later mailings contained only the letter, so postage was $370 per thousand letters. I ended up mailing about 20,000 letters. My tax return for 2004 showed a $37,000 dollar loss for the business. This figure includes the aforementioned postage, printer, telephone, fax machine, dedicated business phone lines for the telephone and fax machine, office supplies, and advertising. As you can surmise, the lion’s share of the cost was due to marketing – both the direct mail and news media advertising.

  Spent few weeks getting my office fixed up and furnished with the requisite desk, chair, shelving and a brand spanking new 19 inch LCD monitor for the computer. Then it was time to get the business going. I don’t recall being told how to find note leads other than advertising, or buying lists of leads. I decided initially to go with newspaper advertising, so I placed a display ad in the local paper identifying myself as a buyer of notes and waited for the leads to roll in. And waited. And waited some more. No response, so obviously I needed more advertising. So I bought yellow page space in the local FSBO free publication, which is published monthly.

 As a side note, my response to FSBO yellow page ad over nearly an entire year was two phone calls. One call was from a curious real estate investor who wondered if we could partner while she bought houses from people who would hold the paper. Smelling simultaneous closing deals galore, I readily explained a few concepts about buying and selling of notes but never heard from her again. The other phone call was from a prospective entrepreneur who thought he might like to try his hand in the note business and merely wanted to know what kind of response I was getting from my FSBO yellow page ad. I was not disillusioned with the note buying business at this point, but I was certainly having misgivings about the methods I had employed to date. After a solid month of advertising, I had exactly zero responses. I looked through my American Cash Flow Association materials and found various recommendations for list sellers. I picked one list seller at random and purchased a list of 500 names for holders of “seller take back” notes in my state. 

Out of my first 500 mailings, I can tabulate my responses as follows:

I excitedly went through the process of obtaining a quote and mailing him a formal proposal. As I was taught, I followed up with a phone call to his office where his wife answered the phone. After a week or so of being told that he was unavailable and leaving messages, I got the message myself and gave up on further contact. 

Regard Joel Cassway.  I found him while searching on the Internet for material which would help point the way fro me in getting started in the note business. This was after my first direct mailing and its dismal results.  I bought Mr. Cassway’s marketing kit for a price of about $900, and found most of the material almost childish in nature.   

The only part I really used was the “Note Owner’s Manual”, of which I have since seen various versions by other entrepreneurs.  The manual generally contains a glossary of terms, a place to record payments on the note, and a number of “facts” which the note owner should know about.  The “facts” are subtly designed to alarm the note holder and create anxiety about getting paid every month.  The idea is that since the note broker’s contact information is splattered all over the manual, the note holder will of course contact him when he is ready to sell the note.

 At present, I have about 12000 names in my database that have not been purged yet for one reason or another. Of these, I have logged 75 telephone responses (and mailed 69 Note Owner Manuals). So this works out to a response rate of about three responses per 400 leads. I should point out that the response rate is actually lower per mailing, as I had a repeated mailing of about 2500 postcards (which produced a negligible response rate).

 Working with my “Master Broker”, I was proud to have negotiated a deal on a mobile home note, which would net me $950. I had operated under the assumption that my price from him was a solid quote. Later, I was astounded when the Master Broker informed me that he had withheld $200 from my commission for “phone calls” and acted like he had taken it easy on me. I felt like my pocket had been picked or that he had reached over my shoulder while I was counting my money and said ”Not so fast there buddy boy, I’ll take some of that!” as he deftly withdrew $200 from my fingers.

 I was asked the following conjectural question about my experience as a note broker. “Overall did you think that you were misled or do you think you were told the truth throughout and you just were lazy or incompetent?” I’ll leave the answer to the reader of this article.

 I personally think I’m not lazy. I worked hard on this business for 12 months, often spending much more time in my office than I did in my job as an electrical engineer, including a few hours on Saturdays and Sundays. I don’t have a lot of time to think about it. I’m pretty busy trying to figure out how to ration my tax refund (due to my huge business losses offsetting my wife’s income) long enough to get hired from the resume I’m also hard at work on. Wonder if my ex-boss’s ire has been tempered by the passage of time and would he perhaps support my rehire? 

In order to survive financially, I refinanced both my primary residence and our single rental property for the maximum amount possible. At the time of this writing, there is simply no more equity and the rental property is running at a negative cash flow.

My only hope for extrication from this predicament is to try selling the properties without an agent and hopefully wipe out the debt and start over again in an apartment.

Mortgage-investments.com invites you to submit articles about YOUR experiences (positive or negative) after taking a course from the American Cash Flow Association or American Note Network/Cash 4 Cash Flows (operated by Mr. Russ Dalby).

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