Muni Bond Mailers

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B24's picture
B24
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If you were to send postcard/call on muni bonds, would long-term muni's with a higher rate (say 5.5%, 30 years)get a better response than a shorter maturity? (say 4 to 4.75%, 10-15 years)
 
I don't do a lot of direct selling of muni's (other than to existing clients), so i am not sure what would garner the most attention.  It seems some people get scared away from long maturities.  I am just curious what some of the bond sellers out here think.

Squash1's picture
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I call on shorter maturities, insured with decent rates... Currently calling on some Mass Port Authority 6 yrs, 2 yr call, yielding 6.0%..

In my opinion i think the long term scares people(especially if you are calling someone who doesn't have 20 yrs)

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6 years, 6%??  What's the rating on it?  Is that a 6% coupon, or yield to maturity/call?  I don't see many investment grade bonds yielding that high with only 6 years left.

Spaceman Spiff's picture
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Is that bond insured? 
 
This is one of my complaints of Jones.  I don't know where you guys get your bonds from, but our traders could do us some favors and find stuff like that one.  Of course in our system it would net like .5% and nobody would sell it, so...
 
Nothing like calling on a good 5% MBD then killing the sale with the maturity in 2039.   

Squash1's picture
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Insured(AMBAC) coupon 5.5% BBB

Squash1's picture
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Use to be at jones know the feeling... Still compare inventory with a friend that works there..

Had a friend who sold muni's institutionally and said the Jones traders would call up and demand so many things that it was hard to fill orders, then they would want (either too many or not enough.. don't remember)

B24's picture
B24
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Squash, who do you work through?

Squash1's picture
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Pershing.

Squash1's picture
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I think jones likes the long term stuff(buy and hold idea) plus the real goal is to have them reinvest the dividends in a mutual fund. Buddy of mine does that all day with Van Kampen equity income. Sends them the first check to their house and then calls to verify they got it, then follows up with a pitch for VK EI

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B24
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Do you know the CUSIP on the MA bond?  I searched MA Port Authority bond listings, and the only 5.5% bonds are selling at 13% premiums (and those ae 11 year bonds).

Squash1's picture
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575898ad3

snaggletooth's picture
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I sold some First Trust Municipal Closed-End UIT today...yields 6.6%, fully liquid after September, rebalances in 2 years.

Squash1's picture
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I dont understand those.. love the equity uits, but dont get the income ones..

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snaggletooth wrote: I sold some First Trust Municipal Closed-End UIT today...yields 6.6%, fully liquid after September, rebalances in 2 years.

Which one is that?

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Squash1 wrote: snaggletooth wrote: I sold some First Trust Municipal Closed-End UIT today...yields 6.6%, fully liquid after September, rebalances in 2 years. Which one is that?
 
Municipal Income Select Closed-End Portfolio 17
 
http://www.ftportfolios.com/Retail/dp/dpsummary.aspx?fundid=6208
 
I figure I can get out if duration and interest rates become a problem.

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Squash1 wrote:575898ad3
 
Yup.  BBB.  Jones won't buy them, even if they are insured.  Uuuuhhhhh .  Well, I'm just gonna go sell some 42 year AA rated 5.7% munis..... 

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B24 wrote:Squash1 wrote:575898ad3
 
Yup.  BBB.  Jones won't buy them, even if they are insured.  Uuuuhhhhh .  Well, I'm just gonna go sell some 42 year AA rated 5.7% munis..... 
 
When are you going to bite the bullet and go indy?  EDJ doesn't deserve you.

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B24 wrote: Squash1 wrote:575898ad3
 
Yup.  BBB.  Jones won't buy them, even if they are insured.  Uuuuhhhhh .  Well, I'm just gonna go sell some 42 year AA rated 5.7% munis..... 

That sucks but I know the feeling(well actually I didn't til I left). But i have tons of stuff just like that..

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snaggletooth wrote: Squash1 wrote: snaggletooth wrote: I sold some First Trust Municipal Closed-End UIT today...yields 6.6%, fully liquid after September, rebalances in 2 years. Which one is that?
 
Municipal Income Select Closed-End Portfolio 17
 
http://www.ftportfolios.com/Retail/dp/dpsummary.aspx?fundid=6208
 
I figure I can get out if duration and interest rates become a problem.

Why fully liquid in sept? is that when the deferred sales charge clear? I do all UIT equities in fee accounts, so I pay nav and don't have to worry about the comm..

snaggletooth's picture
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Squash1 wrote: Why fully liquid in sept? is that when the deferred sales charge clear? I do all UIT equities in fee accounts, so I pay nav and don't have to worry about the comm..
 
Yeah, because of the deferred sales charge.  You don't have to worry about it I guess. 

Spaceman Spiff's picture
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What's the purpose of a Closed End Fund UIT?  Is it just simply the number of individual underlying issues?  They're muni bonds, right?  They're all fishing in the same pond.  And it's not all that deep.  So, what's the added benefit of the UIT when you can get what you're looking for in the CEF?  And is there really a need for 32 of them?  There are 4 different California specific funds in there.  Seems like overkill to me. 

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Come on jonesie.. you should know this, diversification... just kidding i don't know probably for ease of purchase.. Instead of buying one closed end fund, buy 32 and diversify without having to buy them individually.

snaggletooth's picture
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Spaceman Spiff wrote:
What's the purpose of a Closed End Fund UIT?  Is it just simply the number of individual underlying issues?  They're muni bonds, right?  They're all fishing in the same pond.  And it's not all that deep.  So, what's the added benefit of the UIT when you can get what you're looking for in the CEF?  And is there really a need for 32 of them?  There are 4 different California specific funds in there.  Seems like overkill to me. 
 
Would you rather fish in the pond with 1 hook or 32 hooks?
 
Who cares if it's overkill...as long as it gets the client to do something positive for themselves, why complain?

troll's picture
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snaggletooth wrote:Spaceman Spiff wrote:
What's the purpose of a Closed End Fund UIT?  Is it just simply the number of individual underlying issues?  They're muni bonds, right?  They're all fishing in the same pond.  And it's not all that deep.  So, what's the added benefit of the UIT when you can get what you're looking for in the CEF?  And is there really a need for 32 of them?  There are 4 different California specific funds in there.  Seems like overkill to me. 
 
Would you rather fish in the pond with 1 hook or 32 hooks?
 
Who cares if it's overkill...as long as it gets the client to do something positive for themselves, why complain?Owned.

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If just a few of the underlying CEFs cut their dividends, your quoted 6.6% is out the window, and if the underlying payouts decline, so will the NAV of the underlying funds.Might be a good concept for a small investor and the commission isn't bad but just be careful.

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exUBS wrote:If just a few of the underlying CEFs cut their dividends, your quoted 6.6% is out the window, and if the underlying payouts decline, so will the NAV of the underlying funds.Might be a good concept for a small investor and the commission isn't bad but just be careful.
 
Agreed.

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B24 wrote:Squash1 wrote:575898ad3
 
Yup.  BBB.  Jones won't buy them, even if they are insured.  Uuuuhhhhh .  Well, I'm just gonna go sell some 42 year AA rated 5.7% munis..... I'm at Jones, and I sold some BBB+ last week.  15yrs or so yielding 5.75%.  It's the lowest rated bond I've ever seen in inventory.Have you guys at places other than Jones seen a reduction in your bond inventory?  Do you regularly get bonds with 0-15 years to maturity?   My EDJ Bond ladder only has one rung - out at 30 years.   It feels so weird to say 2039 on the phone.      But I can only promise you'll get to keep it for ten!  

voltmoie's picture
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How do you guys overcome the 20-30 year bond objection?  Other than "you can sell it at any point"

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wsubob wrote: B24 wrote:Squash1 wrote:575898ad3
 
Yup.  BBB.  Jones won't buy them, even if they are insured.  Uuuuhhhhh .  Well, I'm just gonna go sell some 42 year AA rated 5.7% munis..... I'm at Jones, and I sold some BBB+ last week.  15yrs or so yielding 5.75%.  It's the lowest rated bond I've ever seen in inventory.Have you guys at places other than Jones seen a reduction in your bond inventory?  Do you regularly get bonds with 0-15 years to maturity?   My EDJ Bond ladder only has one rung - out at 30 years.   It feels so weird to say 2039 on the phone.      But I can only promise you'll get to keep it for ten!  
 
There's plenty of short maturities, but the volume is pretty low.  So it's not bad if you need to get $25K here, $50K there, but you will never see $10mm of a 10 year bond.  The short stuff in inventory is usually just stuff that Jones has bought from clients and put into ivnentory.  However, sometimes you find a gem if you look regularly.  I have some short-term muni buyers, so I look maybe 2-3x per day - just set up quick-function keys for the inventory you want.  A few weeks ago, I grabbed $20K of a 5% A+ 2017 muni selling at 99.  But that stuff goes fast.

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B24 wrote:wsubob wrote: B24 wrote:Squash1 wrote:575898ad3
 
Yup.  BBB.  Jones won't buy them, even if they are insured.  Uuuuhhhhh .  Well, I'm just gonna go sell some 42 year AA rated 5.7% munis..... I'm at Jones, and I sold some BBB+ last week.  15yrs or so yielding 5.75%.  It's the lowest rated bond I've ever seen in inventory.Have you guys at places other than Jones seen a reduction in your bond inventory?  Do you regularly get bonds with 0-15 years to maturity?   My EDJ Bond ladder only has one rung - out at 30 years.   It feels so weird to say 2039 on the phone.      But I can only promise you'll get to keep it for ten!  
 
There's plenty of short maturities, but the volume is pretty low.  So it's not bad if you need to get $25K here, $50K there, but you will never see $10mm of a 10 year bond.  The short stuff in inventory is usually just stuff that Jones has bought from clients and put into ivnentory.  However, sometimes you find a gem if you look regularly.  I have some short-term muni buyers, so I look maybe 2-3x per day - just set up quick-function keys for the inventory you want.  A few weeks ago, I grabbed $20K of a 5% A+ 2017 muni selling at 99.  But that stuff goes fast.Soooo...you slammed an old lady into an 8 year surrender period? Did you explain to her that the A+ rating comes from the same people who rated the CMO's?

BondGuy's picture
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voltmoie wrote:How do you guys overcome the 20-30 year bond objection?  Other than "you can sell it at any point"
 
Pitching munis is an appeal to greed. Highest yield wins. To get that high yield you need to go long. It's that simple.
 
When a client/prospect objects here's the answer:
 
"Mr. Smith, i was trying to get you the highest yield available. To do that we have to go long term. If you don't want to invest for that amount of time, how far out do you normally like to go?"
 
THis leads to fact finding  rating/maturity/amounts and any other wants or needs at the end of which you say to prospect:
 
"Terrific, I'll send you my card, some information on who we are and when i see something that fits I'll be back to you - one more question: If you really like the idea i trust an investment of $50,000 wouldn't be a problem for you right now?
 
You only need to ask the money question if it wasn't covered during the fact find. here's how that goes:
 
Ok, Mr. smith, I understand 30 years is too long for you?
 
Yes
 
How far out do you usually like to go?
 
No more than 10 to 15 years
 
Terrific, and what ratings do you like to stick with?
 
Good quality, triple A (they always say triple A)
 
Anything you don't like?
 
No, not really.
 
And when you buy a bond how much do you usually invest?
 
$25,000
 
And if we find something you are ready to go now?
 
If i like the bond.
 
Terrific!  Mr Smith what i'm going to do is get you out my card and some information on who we are and if i see something that fits I'll give you a call, fair enough?
 
OK with me. Ah, what did you say your name was?
 
 
 
All day long, that's how it's done.
 
The exact wording doesn't matter as long as the bases are covered.
 
Don't get hung up on bond maturity and don't make a decision for the prospect/client. There are buyers for every maturity. If the client/prospect doesn't go for the bond you are pitching then it's time to fall back and fact find and zero in on what they are looking for.
 
Using a muni to prospect with you are looking for muni buyers. it is unlikely that the bond being presented will fit. Thus highly unlikely to sell on the first call, though it's been done. The bond gets a conversation going enabling you to fact find to call back with an exact fit.
 
Simple simple simple- butttttttttt not easy!
 
 
 
 
 
 
 
 

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Thanks, good stuff. 
 
Imagine for a moment you are an EDJ guy in a small area of around 15,000 people and most of your prospects are not traditional bond buyers.  They think bond, they think stock market.
 
Would your strategy change?

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voltmoie wrote:Thanks, good stuff. 
 
Imagine for a moment you are an EDJ guy in a small area of around 15,000 people and most of your prospects are not traditional bond buyers.  They think bond, they think stock market.
 
Would your strategy change?Yesterday's equity buyers are today's bond buyers. Don't let these fools make you think that people have to make very high returns to be happy. It's not true.

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DHK wrote: B24 wrote:wsubob wrote: B24 wrote:Squash1 wrote:575898ad3
 
Yup.  BBB.  Jones won't buy them, even if they are insured.  Uuuuhhhhh .  Well, I'm just gonna go sell some 42 year AA rated 5.7% munis..... I'm at Jones, and I sold some BBB+ last week.  15yrs or so yielding 5.75%.  It's the lowest rated bond I've ever seen in inventory.Have you guys at places other than Jones seen a reduction in your bond inventory?  Do you regularly get bonds with 0-15 years to maturity?   My EDJ Bond ladder only has one rung - out at 30 years.   It feels so weird to say 2039 on the phone.      But I can only promise you'll get to keep it for ten!  
 
There's plenty of short maturities, but the volume is pretty low.  So it's not bad if you need to get $25K here, $50K there, but you will never see $10mm of a 10 year bond.  The short stuff in inventory is usually just stuff that Jones has bought from clients and put into ivnentory.  However, sometimes you find a gem if you look regularly.  I have some short-term muni buyers, so I look maybe 2-3x per day - just set up quick-function keys for the inventory you want.  A few weeks ago, I grabbed $20K of a 5% A+ 2017 muni selling at 99.  But that stuff goes fast.Soooo...you slammed an old lady into an 8 year surrender period? Did you explain to her that the A+ rating comes from the same people who rated the CMO's?
 
Soooo......you drinking already?

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B24 wrote:
Soooo......you drinking already?
 
What's wrong with that?  It's 5:00 somewhere, right?

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voltmoie wrote:Thanks, good stuff. 
 
Imagine for a moment you are an EDJ guy in a small area of around 15,000 people and most of your prospects are not traditional bond buyers.  They think bond, they think stock market.
 
Would your strategy change?
 
And for good reason this go-round.

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Squash1 wrote:Use to be at jones know the feeling... Still compare inventory with a friend that works there.. Had a friend who sold muni's institutionally and said the Jones traders would call up and demand so many things that it was hard to fill orders, then they would want (either too many or not enough.. don't remember)
 
I had an out-of-state indy buddy send me a list of muni bonds he has available from my state, and I was floored at the inventory he has accessible to him.
 
There are muni issues all around me that I had no idea even existed.
 
I was shocked at first.
 
Then the embarrassment set in.

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That's funny..

BondGuy's picture
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voltmoie wrote:Thanks, good stuff. 
 
Imagine for a moment you are an EDJ guy in a small area of around 15,000 people and most of your prospects are not traditional bond buyers.  They think bond, they think stock market.
 
Would your strategy change?
 
My pitch is aimed at finding yield buyers, muni and otherwise. Unless your area is on the moon my pitch will work. I guess it could work on the moon as well, i've just never called there. So, maybe it would work there as well. Perhaps you could post the area code and i'll give it a shot.
 
This pitch works everywhere. I have many clients across the country who live in towns with a Jones office. Some within walking distance. Butttt, if you'd like you can modify the pitch to any fixed income product Or you could even use the trusty Bill Good Muni UIT pitch. That expains what munis are and then probes for interest. Go to BG's web site and check out some of his free for the taking scripts.
 
The key is less in what you say and more in that you say it 50 to100 times a day. You have less than 10 seconds to grab the prospect's attention. That's why we use high yield
 
Mr. Smith i'm calling today with a tax free bond (note i don't say municipal) that's yielding almost 6% tax free. That's the same as a CD yielding over 9%. Do you have any CDs yielding 9%?
 
 (no)
 
 Does this sound like something you could have an interest in?
 
There are a zillion ways to do this. They all work because they all have one thing in common-making the call.
 
And while cold calling if you and everyone else here continues to over think it no one will amake any calls. Just do it. If it doesn't work, change something and do it some more. keep changing until you hit on what works for you.

voltmoie's picture
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Cool, thanks!

Speedynew's picture
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Bond guy, who do you call residences? or are you calling business?

troll's picture
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Speedynew wrote:Bond guy, who do you call residences? or are you calling business?he calls homes and apartments residences. he calls buildings businesses.

BondGuy's picture
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Almost all business numbers. Some reverse directory numbers from good neighborhoods and also leads purchased from CIS. The who to mail to, and call is a an entire subject that gets far too little attention.
 
 

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So here is my confusion.. what constitutes a good business number.
 
Are we talking corporations and just dialing everyone who seems to be high rankings.
 
Or are we talking local small businesses and dialing the owner..?

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Speedynew wrote:So here is my confusion.. what constitutes a good business number.
 
Are we talking corporations and just dialing everyone who seems to be high rankings.
 
Or are we talking local small businesses and dialing the owner..?
 
Both.
 
The deal is FIND THE MONEY!
 
who has money?
 
Gee, since most people don't wear "I've got money signs" I don't know.
 
Or do they wear i've got money signs?
 
Not really, but they may live in I've got money houses, drive i've got money cars, belong to i've got money clubs, participate in i've got money hobbies, and have i've got money careers.
 
Your job is to find the money. Look at people who should have money. A corporate exec pulling down 1/2 mill a year, yup, got money. A deli owner pulling down a million a year has got money. The prez of a 200 employee construction firm has got money. So does the guy docking his 46foot Grand Banks as does the guy flying around in his Bonanza A-36.  
 
To find which of these "looks like money people" actually have money you have to prospect them.
 
Clear it up for you?

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Love this thread.

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BondGuy wrote: Speedynew wrote:So here is my confusion.. what constitutes a good business number.
 
Are we talking corporations and just dialing everyone who seems to be high rankings.
 
Or are we talking local small businesses and dialing the owner..?
 
Both.
 
The deal is FIND THE MONEY!
 
who has money?
 
Gee, since most people don't wear "I've got money signs" I don't know.
 
Or do they wear i've got money signs?
 
Not really, but they may live in I've got money houses, drive i've got money cars, belong to i've got money clubs, participate in i've got money hobbies, and have i've got money careers.
 
Your job is to find the money. Look at people who should have money. A corporate exec pulling down 1/2 mill a year, yup, got money. A deli owner pulling down a million a year has got money. The prez of a 200 employee construction firm has got money. So does the guy docking his 46foot Grand Banks as does the guy flying around in his Bonanza A-36.  
 
To find which of these "looks like money people" actually have money you have to prospect them.
 
Clear it up for you?

No.. I understand the premise, but would you use infousa or take time to build your own list.

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Speedynew wrote: No.. I understand the premise, but would you use infousa or take time to build your own list.
Dude, is it really that complicated for you?  Not to be a d***, but what do you think?  Apply your mind here.
 
You're looking at downloading leads that everyone has access to on infousa versus creating your own list with your own blood sweat equity?
 
If you didn't just arrive from the womb, wouldn't it make sense that any number you can get that others don't have readily available would probably be better?
 
I just don't understand how this isn't common sense to you. 

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Not trying to be a d#ck. Actually that new. Came from a telecommunication company.

It makes sense that a list everyone has access to would be more used, however doesn't a company like info usa has record on all companies(the local 7-11 showed up in a search). Isn't the idea to actually call these places(because most people these days seem to brush off cold calling as stone aged).

Where would you go to build your own list.

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I just poked around on InfoUSA.  They allow you to build your list to see how many listings are available before you comit to their service.
 
I screened for publicly traded restaurants within 25 miles of my zip code.  I came up with around 100 listings. 
 
If I were to purchase this list, I would call the owners and managers of each location and offer them a research report on the company they work for.  Should be interested right ?  
 
Then go to the county RE records and find out who owns the underlying property.  You would be surprised to know how many individuals and families own fast food restaurant properties.  I would contact them and offer them the same research report.
 
Yes the names are available to everyone that can afford the price, but it is what you will do with the names after you buy them that would set you appart from your competition.
 
Food for thought.   ( No pun intended).
 
 

BondGuy's picture
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Speedynew wrote: No.. I understand the premise, but would you use infousa or take time to build your own list.
 
I've never heard of Infousa.
 
ice has it right. The harder the number is to find or the more work it takes to find it usually the better the number is. These people aren't getting hammered.
 
For list building I use the public library to track down directories. I compile a list by making copies of pages from the directories. IF the list produces i buy my own copy of the directory. This works for all directories, corporate, residential and otherwise.
 
The only list broker i use is CIS.

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