Cash Notes Blog

Mortgage Notes Investing for Beginners and Advanced

Feb 142012

I decided to create a new series of articles today that will cover more details of the steps and resources needed to work the mortgage notes business. There are some great opportunities that some of you may be missing simply because you are not looking for them. I took two approaches to the articles and will update them more as time goes on. I decided to create some details for those just starting the business to once again clarify some basic steps and ideas needed. I then took some time to discuss options for investors who are buying or who want to start buying notes.

One of my recent articles discussing these points will soon be placed on some online article sites and some of the others are available on my articles page found here. I hope you enjoy the mew material and please let me know if there is a topic you desire more information on. I would be happy to provide more details.

Preparing for success

Marketing No Responses »

Feb 082012

One of the hardest things for most people who start their own business is getting motivated or staying motivated in the face of new challenges. I have coached people to start their own business in real estate, notes and other endeavors for years and the only thing I have ever seen that can defeat any of them is fear. If you do not know how to react to the challenges that come your way and if you let fear take hold then you lose confidence and everything looks ten times harder than it is.

I have struggled to get this point across to so many individuals over the year and with many I succeed. With some the fear is just too much and they succumb to it and give up. Running your own business is not easy. There are no easy answers. If you have watched the news or paid attention to the note industry this past year then you may know that one of the big infomercial names of the industry has been taken down for suggesting that this business is “easy”. It simply is not and if you expect to succeed you have to first accept that anything worth it is going to take effort. In the coming days and weeks I intend to put more information out about the need for a winning attitude in order to succeed. I will work to add many posts with details to assist you through the tough times of starting a business and I will work to give good insights that will help with having a winning attitude.

I will also work to update and add to my articles page. I will provide new content and update those articles that have been written about marketing the note business. Keep an eye on the site and feel free to let me know if you have some specific questions or things that you struggle with. I’d be glad to give insights as best I can to help you overcome the challenges you see in your business.

Mike@NoteDocs.com

Mortgage Notes in a Down Economy

Basic Note Business Instruction No Responses »

Jan 272012

Is it a good time to invest in mortgage notes? There is so much talk about a bad economy and job loss and many feel a feeling of “doom and gloom”. Some might be led to think that this is not a good time to begin your own business. This mentality could not be farther from the truth. This is a great time for people to start their own business. The problem with starting your own business is not timing but attitude. I don’t mean that in the strictly Negative vs Positive way. What I mean is that we are all conditioned right now to be followers and workers and not leaders and thinkers.

It is a great time to work the note business because of the problems in the economy. With the issues we have seen in the banking industry there has been an increase in seller financing to help get deals closed. There are more investors closing deals with owner financing. There are more sellers being open to the idea of holding a mortgage note in order to sell a property. It is precisely what we need at this time in our history. We need a change that puts more power in the individuals rather than large institutions that are often corrupt.

This change in our economy means that as note brokers and investors there are many more opportunities. The notes are there. There is an increases rather than a decrease but you have to be prepared to do what is necessary to make the business successful for you. If you are starting this business with hopes of a change that is needed in your life then it is important that you keep in mind that the change has to come from within. It is not the business that will return to you what you want but rather you who will cause the business to grow and thus give you the return you are looking for.

I have written many articles on these topics for understanding how to run a business and how to market this business specifically. Be sure and review these articles for further insight and create the attitude that helps you become the business owner you want to be.

Cash Flow Notes Closings

Creative Cash Flow Notes No Responses »

Jan 202012

One of the things that you need to always think about with the cash flow notes business is the need to be creative. Even more than that is to be creative in solving the problems of others. You will close more deals if you work hard to find, recognize and resolve the note holder’s problem. If you are only thinking about making a buck then you have already lost the deal most of the time. This is a hard concept for many to truly accept, after all you are in business to make money right? This is true but like anything in life, your success is more related to how you treat others than you might think.

Those who succeed are usually the ones willing to think about how to best serve others. Your service or product will be better if you strive to make certain your customer is taken care of. In the cash flow notes business this means you need to find out where the mortgage note holder’s pain is.

Why are they thinking about selling?
How much do they need to solve their pain?
Can they resolve their problem with a partial sale?
How can you help them get what they want?

Sometimes getting an understanding of what the note holder needs is as simple as asking them why they want to sell. Other times you might need to be a little more covert in your questioning. Sometimes people are private and don’t want to share with you their “pain”. They don’t realize that knowing this will help you resolve their situation and find you a solution. You might just try telling them with a comment like this: “John, I can help you best if I understand why you need the money. Sometimes you can get what you need without losing the entire investment you know is so valuable. Can you give me a bit of clarification of why you are selling?”

This kind of questioning may help you to ease the “need” out of the mortgage note holder and that will give you the power you need to begin working on a solution for them. Most of all, be sure that the note holder knows you are interested in finding the perfect solution for them.

How to Find Cash Flow Notes With Direct Mail

Marketing No Responses »

Jan 122012

Every business has it’s struggles and with most the biggest issue is getting the right customers. Without the customer there is no business after all. In this business the customer is the noteholder and you need to do the work of finding note holders. Not only do you need to find notehoders but you need to find the ones who want to sell their note. Thus the question: “how do you find cash flow notes?”

Well, here I would like to talk abotu some options with post cards. I want to be clear that this is not the only approach that will work but I also want you to be clear on what is required. I’ve worked with a lot of people over the years and I can’t tell you how many think that they will make their first deal with the first small mailing. Sorry folks, it just doesn’t happen that way for most. It’s an expensive lottery ticket and if that is your expectations or hopes it is nothing more than a lottery ticket. I say this first to help you realize that this is a business and you should run it like a business and treat it as such. If you don’t have the proper expectations then you are just wasting time and money. You must be serious and you must accept the reality of business.

Direct marketing is an interesting form of marketing and has been around for many many years. Direct marketing in the note business has also been around for many many years and anybody who holds a note has most likely been contacted by other marketers so you need to stand out.

Here are a few ways to stand out in your mailings:

Be sure to use some logo or simple design on all mailings
Repeat mail to your list at least once a quarter
Try creative options such as “Don’t sell your note! Rent it instead”
Test multiple approaches, tropical picture card, money picture, blank hand written, simple printed…
Add new leads to your list often

Remember that this should only be part of your business. You should also be working on building a referral pipeline and perhaps try to work with FSBO sellers too. I’ll give some tips pretty soon on other ways to find notes with no cost.

Free Note Holder Leads

Giveaways No Responses »

Jan 062012

I have decided to give away some leads to one lucky winner. I will provide 500 note holder leads to a random winner at the end of this month. All you need to do is sign up for our newsletter through the sign up on the right of this page. You can also post a comment or question on our posts but please do NOT Spam just to get a link. Such posts are deleted and marked as spam and will not be entered.

I am however very interested in answering any legitimate questions you might have about the business or marketing. I will be posting many great insights on creative ways to market the note business this year and you will be updated with an email every time there is a new post.

I’d like to get some feedback on this post. Leave a comment and let me know, Would you want these updates

Daily
Weekly
Monthly

How To Close Cash Flow Note Deals With Partials

Creative Cash Flow Notes No Responses »

Dec 302011

Most who start in the cashflow notes business only think of a note deal in black and white terms. You either sell, buy or broker the note or you don’t. Either the noteholder is ready to sell or they are not. What you lose when you think in this way however is a lot of opportunity. You are leaving money on the table that should be put in your pocket. Perhaps the note holder is unrealistic in their desires. Maybe they expect 100% of the remaining balance left on their note or perhaps they just don’t need the total sum that would come from the sale and so they are not interested in losing the entire investment.

What you and the noteholder are missing is that there are countless ways to sell a note and they do not all require that the seller relinquish everything. Not only that but all sales do not need to transfer all payments or notes to the buying investor. I plan on giving just some basic ideas here to help you recognize what can be done with notes to close more deals and to make more money. One of the biggest benefits to thinking this creatively is that you can easily become a note investor yourself without investing any money. Now I’m sure that some of you are interested in that. Before I get into some examples (more details will come later) let me just say this: Your ability to make more deals using these techniques requires a bit of creative thinking. Creative thinking requires a positive attitude. A positive attitude is more than you think it is. I’ll write more about what a true positive attitude is in another post but let’s discuss some of the creative ideas that essential can be referred to as “partial” note purchases.

If the seller have a $100000 note but only needs $25000 you can ask an investor to bid on the number of payments they need for $26000 (leaving you room for a profit)
If seller has 29 years of payments remaining ask investor to bid on 20 and then negotiate with them for you to keep the last 9 years of payments
If seller requires the payments to live on right now, ask an investor for an offer on the latter payments of the note
if seller expects full price for the note, ask for an offer that buys some payments now, some later and perhaps leaving some for the seller at the end with all purchases and later payments totaling the total of the note
offer to buy only the next 2-20 years of payments leaving the latter payments for the seller, they will often want to sell the rest of the payments at a later date
If you find a portfolio of notes negotiate a purchase for 39 of 40 notes and keep one note as part of your commission

There really is no limit to how a note purchase can be structured other than your own creativity. that is why your attitude and willingness to be a creative thinker can make you more successful.

Postcard Marketing -Full Color or Black and White?

Marketing No Responses »

Dec 292011

There are two common options for the full color card front.

Use a card with a pretty picture to get them to turn the card over. A tropical scene or something unusually beautiful.
A pretty picture with a message written on it. The idea here is simply a backdrop for our message.

Both options will bring results. The idea behind the one with a beautiful beach scene or similar beautiful scene is that they will wonder who sent it and where they are. Is it someone they know? They will turn the card over and there see our offer to give them cash. The other approach will have a beautiful scene or a handshake or money or some combination of those and the message that they have another chance to get their money or Cash Now. This works well with newer leads that have just sold within the last few years.

The front of the card should read:

Your 2nd Chance

To Get your

CASH

From the

Property you sold

Some other options for the front of the card:

(Focusing on older leads or larger note leads)

Don’t Sell Your

Note!

***

Rent

Your Note Instead of Selling it!

***

Get Cash

from Your Mortgage

Note Without Selling it!

***

Increase the Amount of the

Payments

from your Mortgage Note!

***

Get Your Mortgage

Note to Pay Off Quicker!

***

Receive ALL of the Payments

on your Mortgage Note in

ONE YEAR!

The back (address side) of the card should read:

(aligned left)

Do you know you

can get cash by

selling All or Part of

your mortgage note?

Contact Mike @

800-123-4567

www.mywebsite.com

Clip this card to

your NOTE for

future reference!

(Notice that “all” and “part” are different colors and All is bold and Part is italicized)

Black and White “budget” cards:

If you are not ready to commit to sending out thousands of cards through mass mail then you may be more comfortable with doing them by hand. that is really the only other option I would recommend. If you want to do handwritten card then use the following script on the front of the card and just the addresses on the back.

Did you know you can get cash by

selling All or Part of your mortgage note?

Contact Mike @ 800-123-4567

www.mywebsite.com

Understanding the Statistics:

No matter how you do a direct mail approach you should expect no more than ½% response. This is an average after consistent marketing over time. That does not mean that you will get that return each and every time. It is what we see over a long period of time. DO NOT EXPECT IT EACH TIME. This seems to be one of those areas where people just don’t get it. Understand what a statistic is and how they are determined. It is not a solid guarantee. It is something that shows what has happened in the past. Overall these may be the results you see when you market consistenly over a year or two. If you only do it for a month or three months or even six you may not see the same numbers because you have not given it enough time.

Returned cards:

It is also important for you to understand that you will get some of these cards coming back undeliverable. People move and things change over time. You will see between 10% and 30% coming back at you undeliverable. I just through them away and forget them and move on with the next ones. The leads you purchase are public record and are sold by anyone who wants to sell them. There is no such thing as an exclusive lead. Some people will respond saying take me off you list or stop sending cards. This is part of the business and you can’t let that bother you.

Next week we will talk about other strategies for finding notes. However, this strategy will get one of the quickest responses for you. This is a strategy that will get money in your pocket in a quick amount of time.

Networking with other note brokers and investors

Networking No Responses »

Nov 222011

I recently had a question about finding other brokers and investors to network with. It is interesting that many of us as adults tend to want to avoid “competition” or hold onto our secret sauce recipe. I personally think that the reality is, if we help one another and share what works we will likely gain more than we will ever lose from such relationships. Here is my response to how to find more insights and true good advice in the note business:

True investors do interact in this business. It is a matter of finding the right place to communicate. There are seminars that go on where real investors communicate. You can get a little bit of advice through www.biggerpockets.com and possibly through www.thepapersource.com. There are real opportunities in the business but it is NOT easy. I was fortunate to know somebody who was connected to the top buyers in the country and so he introduced me to People like Eddie Speed and Mike Morrongiello. I don’t recall having the pleasure to meet Tracy Z. face to face yet but those are some of the names in the industry that are solid real investors with integrity. If you see anything they write or have an opportunity to be at an event with any of them you should take the opportunity.

Here is the blunt truth about this business. It takes a lot of time to learn the things you need to learn to be successful. It takes money to advertise and or to pay for the right training. many of the infomercial programs just aren’t going to do it for you. It is not “easy”. It is not fast and if you are not able to truly dedicate yourself with time and marketing/learning capital then you need to find something else to do to make money. The note business is a difficult one to really make it.

So, as far as advice on making the note business work, you have three main options and all of them take a lot of effort. You can either use direct marketing to note holders which requires building a large list and sending consistent mailings to them. You should send out at least 100 cards per week. If you are not able to do this then you should look at other options.

The second option and I really think you should always pursue is to build a referral pipeline. You will need to talk to a lot of professional contacts including RE agents, lawyers, CPAs, Financial Planners and anybody else who might talk to clientele who could possibly have notes. It will take months of work to build the relationships and the leads will start coming in slowly.

The third option is one that Eddie Speed (www.NoteSchool.com) has done well with. Eddie buys more notes than most anybody in the country as far as I know. He knows the truth about anybody who professes to know about the industry and he is a man of integrity. He teaches his brokers how to find FSBO sellers and teach them seller financing to help sell their house. Then as the note finder you are able to secure a small commission up front and first right to buy/sell the note a year later when it has seasoned. It is a brilliant option that allows you to have a huge amount of control over the note but once again, it will take time to develop.

Cashflow Notes Current Conditions -Will They Help Your Business?

Basic Note Business Instruction No Responses »

Nov 042011

Many of you who are new to the notes business may be wondering if the current economical situation will be helpful or harmful for the Cashflow notes industry. With the irresponsible behavior of the banks around the world and especially in the US things have changed drastically in the real estate market. Many banks have failed and others only survive because of the foolish spending of our government. Unfortunately there is little we can do about all the nonsense that goes on in such circles but what you can do is educate yourself about the private note industry and what these changes mean for you.

With the recent changes banks and lending institutions have changed their tunes drastically. It is far more difficult today to get a loan from a traditional lending institution but we still have thousands who want to own their own home. The current economical events couldn’t be better for the note industry. Seller finance offers a perfect avenue for sellers to sell their homes and for buyers to own one. Many buyers are not able to qualify for the stringent requirements currently enacted by the lending institutions and many may have poor credit. A seller finance option will allow such individuals to get into their home and allows them time to work on repairing their credit.

This is the kind of situation that can cause quite an influx in seller financing. It is very likely you will see more notes available in coming years and if you educate yourself properly you can be involved in creating these notes and therefore be allowed first right to buy such notes. There are amazing opportunities in the cash flow notes industry right now for those who are willing to work this business in a serious way.