A well-thought-out marketing plan is critical to success in the note business. Every time you market, you want quick results: the phone rings, you quote and you close. But real success comes from long-term thinking.
Plan for the sellers who said no
A great deal of your planning should focus on the note holders you didn’t do business with: the ones who weren’t ready to sell, didn’t respond to your marketing or turned down your offer. That’s future business, and it’s at least as important as the deals you closed.
In my experience, 75% of my completed transactions are with sellers who initially weren’t ready to do business. They’re seeds you planted. You can cultivate them or let them rot in the ground, and most people don’t do a good enough job cultivating.
Give them something they’ll keep
Getting note sellers to remember you is paramount. My motto is “give them something they will keep.” When it’s time to sell, they must have your name and number. If they don’t, someone else gets the business.
Start with something basic: add a P.S. to all your marketing letters telling the note holder to keep your letter with the rest of their mortgage documents. Does it work every time? No, but you’ll be surprised how often it does. That’s as basic as it gets. Now let’s go to the other extreme.
Offer note appraisals
I do mortgage appraisals: appraisals of the loan, not the real estate. I started experimenting with the idea several years ago with great success. It became obvious that some of the note holders I talked to weren’t interested in selling now. They only wanted to know what their loan was worth, and nobody was providing that service.
Note holders need appraisals for estate planning, partnership valuations, inheritances, divorces and more. It’s amazing how much demand there is once you know where to look.
Why appraisals bring in referrals
Appraisals are a great entry into the most desirable market available to note people today: financial professionals. To make substantial money in this business, you need attorneys, accountants and financial planners referring you business. Mortgage appraising is the single best way I know to develop those sources, because you’re dealing professional to professional.
Note owners don’t throw away their appraisals. When they decide to sell, they’ll find your appraisal with their important mortgage documents, and you’ll be the obvious person for them, or their financial professional, to call. Your credibility is far above all the note buyers who sent “I buy mortgages for cash” letters.
The finished appraisal also contains everything you need to buy or broker the note: the parties involved and copies of the documents. Is this ethical? Yes. The appraisal document I wrote discloses that you may have an interest in the loan.
Get paid, and start simple
One of the best benefits of doing appraisals is that you can get paid for them. Fees range from the low hundreds for a simple residential loan to more for larger loans. Remember, the whole idea is to put something in the note owner’s hands that they’ll keep. If they paid for it, they not only keep it, they take you seriously.
I’ve built an entire marketing campaign around appraisals, including letters and brochures, and had my appraisal document professionally prepared: seven pages, nicely bound for the client. I don’t expect you to go to that expense right away. Start the way I did: write your appraisal in letter form and call it a Letter of Opinion.
Note holders will remember who you are, you’ll build relationships with financial professionals, and after a while you’ll even get paid.
