At the time of this interview, Nick Buschur was the top broker for Metropolitan Mortgage, then the largest volume note investor in the business. A farm boy from Ohio who went bankrupt before he found notes, he built an office that closed a deal a day. Here he talks about how he started, how he finds notes and what it really takes.
From farm boy to note broker
Q: What did you do before becoming a note broker?
I am from North Star, Ohio, the oldest of 12 kids, a farm boy. Five of my brothers and my parents still run a dairy operation there. When I was 19 I got into the propane gas business, and from there I went into the home improvement business in Dayton (it’s still called Buschur’s Home Improvement Center).
In 1972 the Jim Walter Corporation, one of the biggest home builders in the country, celebrated its 25th anniversary. For publicity, it announced a national search for the top 25 entrepreneurs in the U.S. under the age of 25, with ads in magazines like Fortune and Parade. Unknown to me, a friend entered my name. I made the top 100 finalists and ended up in the top 25. They flew all 25 of us to Florida for their stockholders’ meeting, gave us $1,000 apiece and a trophy. I remember being very flattered by the whole thing.
Here’s an interesting coincidence. At a national note convention in Washington, D.C., Judy Miller told me a story. She had been going through her late father’s papers and found an old copy of Parade with pictures of all 25 winners. She said, “I was just looking to remember what I looked like 25 years ago, and who did I see but Nick Buschur there too!” Judy was one of the 25 as well, and neither of us had remembered the other. Judy later became one of Metropolitan’s top producing brokers herself.
In 1976 I sold both businesses and went into farming, got in way over my head and ended up bankrupt in 1982. (I found out that leverage is a wonderful servant but a terrible master.) I left Ohio for California and started a business custom-making writing pens from exotic woods. A couple of years later I sold that and went into real estate in Brookings, Oregon, first as a Realtor and then with my own office, Creative Real Estate.
In 1984 I took a note for a commission on a deal. That was my first note experience. From there I started brokering notes once in a while to Metropolitan. I did both real estate and notes until 1990. When I met my wife-to-be, Christy, I got serious about doing notes exclusively and really went for it. I started advertising for notes all over Oregon, and a year later I hired my first employee, Mary Beth Hassler, who is still with me.
Learning the business part-time
Q: How did you learn the business? Did you take a class?
I read a few books and learned by trial and error. But the best thing for me was finding Metropolitan. I love those guys and have no reason to go anywhere else. At the beginning we were probably selling 60% of our notes to them. Now it’s probably 98%. Industry newsletters were also a valuable source of information for me.
Q: You didn’t start full-time in notes.
No. I was in real estate full-time, and I’d broker a note every month or so and learn that way. I was afraid to drop the bone in my mouth, real estate, so for the first five or six years I did notes part-time. The first year I was full-time in notes, I concentrated on my local area, and it was tough. In fact, the first few years as a note broker were very difficult. But it started to jell, and we hung in there until it came together. The last three years have been wonderful.
I was so green when I started. I’d send in a package on a mobile home note, and they’d call and say something like, “Uh, Nick, you need to get us a copy of the mobile home title…” or “Nick, do you have a copy of the first trust deed?” The investors weren’t buying “But I’m just a farm boy.”
Q: How long did it take for you to become successful?
I did notes part-time for five years getting the hang of it, and after two years of serious full-time brokering the business began to be pretty good. Until a year ago I was still doing all the bidding, which was tremendously time-consuming. I hired Kimberly Malan three years ago and she has been very helpful. She and Mary Beth are my key people and help me with quoting. I now have five employees.
Finding notes with newspaper ads
Q: What is your main source of notes today?
It hasn’t changed: it’s newspaper advertising. We’ve picked up a few Realtors and mortgage brokers over the years who refer notes, but newspaper advertising remains virtually our only source. It has its drawbacks, but it’s worked for us over the long haul. The difference is that now we advertise nationally, not just in Oregon.
Q: Tell us more about the way you market for notes.
The one problem with newspaper advertising is that there are usually several others advertising for notes in the same column. Someone who does mostly direct mail, like Guy Ercolani (Metropolitan’s number two national broker at the time), is less likely to have competitors right off the bat. A lot of people out West solicit the collection escrows. That can be good, but I don’t do it.
I’ve thought about trying other methods, but as long as this works, I’m not inclined to change. This business is changing so fast it’s incredible, so who knows what kind of marketing we’ll all be doing in five years?
Q: Are you buying paper other than real estate notes?
We’ve done a few annuities and lotteries, but I don’t want to drop the bone in my mouth, which is the real estate note business.
Growing from one deal a month to one a day
Q: How many deals a month did you start doing, and how has your business grown?
In 1984 I was doing one deal every month or two. When I worked by myself it was about four deals a month. Now we close a deal a day.
When I won the BMW at the Metropolitan convention, a lady grabbed me by the lapel as I was leaving the podium and said, “I’ve been in the note business only six months. Tell me one secret of your success!” I said, “Hire good help.” Of course, that depends on what a person wants. Bigger isn’t always better. But if you want to do good volume, you cannot do it yourself.
Q: You’re the top broker of the biggest company in the business. What do you do differently from others, apart from hiring good help?
Good help is the key, and I have it. For me personally, it’s just getting in there and keeping my nose to the grindstone. There’s no magic to being a successful note broker. If you are already a successful salesperson, you know how to succeed in this business. Follow-up is critical, for example. Every broker ought to know the techniques that make a good salesperson. In this business, we’re selling service.
It’s the little things that make a difference. I was fishing for steelhead near Brookings, standing in three feet of very cold water with about 20 other guys, each 10 feet apart. If you’ve never fished for steelhead, it’s like standing in a bucket of ice cubes. I’d been there all afternoon and hadn’t caught a thing, except a cold.
Then a friend came along and stood next to me. First he took out a brand-new hook and a little file and started sharpening it. It was already sharp as a needle, I thought. Then he said, “Nick, see that rock with the overhanging branches? I’ll bet there’s a steelhead resting behind it.” I’d been staying away from that rock, sure I’d snag my line. On about his second cast he bounced his lure off the top of that rock, it slid off, and the next thing I knew he had hooked a steelhead.
My friend gave himself the edge, and he had a plan. And once he made the connection with the fish, he didn’t stop for lunch until he had finished the job. I apply that lesson to business: do the little things, have a plan, do the follow-up and be professional.
Working with investors and other brokers
Q: So you’ve never tried using private investors?
I tried a few way back, but it always worried me. I was afraid something would go sideways and I’d be hung out to dry. In my opinion it takes too much hand-holding, and the risk is too great.
Q: What is the biggest hurdle you had to overcome?
Probably building a rapport with the investor. When I first started I’d shop notes around, looking for a few extra dollars. Since I’ve built a rapport with one, I find they take me more seriously.
Q: Would you advise brokers not to shop their notes around?
Yes, I would. Pick somebody you can work with and develop a rapport. There are some fine companies in this business. I happened to get in with Metropolitan, and I’ve worked on that relationship for years. If you have a good marriage, why would you look anyplace else?
Q: Do you work with brokers?
I have a few. I’m not set up to work with beginners from the investor’s training program, but if somebody knows how to calculate a quote on their own, I can work with them and get them a very competitive rate. Metropolitan gave me and its other premier brokers a rate break, so we have room to work with other brokers on a win-win basis. This is especially helpful on larger deals.
The hours and dues it takes
Q: Could someone starting out today become as successful as you, or has the business changed too much?
Yes, I think they could, but they have to be willing to pay their dues. I compare it to taking off in an airplane. When you first take off you push the throttle to the firewall until your wheels are off the ground. Then you can back off a little so you don’t wear out your engine.
I often talk to people who are new in the business, and some think they’re going to work 35 to 40 hours a week and make $5,000 per-deal fees. They might once in a while, but I don’t know of any who are doing very well with that attitude.
I’ve always worked long hours, because I don’t know how else to do it. For the last several years I’ve put in 70 hours a week consistently. I’m not complaining, and nobody’s making me do it, but in my opinion that’s what it takes. If you have that kind of determination, you’ll probably make it in spite of your mistakes. Only now am I planning to back off some. I like to think my wheels are finally off the ground.
Q: What is your typical day like?
I start at 6 or 6:30 in the morning, take half an hour for lunch and an hour for dinner, and work until I go to bed at 10 or 10:30. On weekends I generally work four or five hours a day.
Before I got serious about notes, I had an attitude about some things. I had had employees and never wanted any again. I had just been divorced for the second time and never wanted to marry again, that was for sure. Today I have five employees, and I’ve done very well by them. I have a wonderful wife, and I’ve never been happier. I suppose you should never say never. And since I won the BMW, all three of my kids want to get into the business!
