Dale Ketcham of Kansas City started buying mortgages in 1970, and in his eighties he still had more knowledge and energy than most people half his age. In this interview he explains how he got into the business, why self-promotion matters so much, and the simple advertising habits that kept notes coming to him for decades.
How he got started buying mortgages
Q: What got you into the mortgage buying business?
Before I started buying mortgages 28 years ago, I owned rentals and small income properties. My job was consulting for small businesses, and the rentals took a lot of time. I wanted an investment that wouldn’t be so time-consuming.
We started selling the rentals and holding the mortgages, and discovered that owning mortgages was a pretty good investment. It’s nice to have money coming in without having to go out and get it, as we had to do with tenants.
Then I found some mortgages for sale and bought some of them, and after that I started advertising to buy more. Although I broker from time to time, my main activity is buying for my own account.
Q: Does someone need a particular type of experience or education to succeed in mortgages?
No, although any experience working with the public will help, as will education and experience in the financial industry. A background in investments, advertising and marketing helps greatly. The desire to keep succeeding is vital.
Why self-promotion is the key
Q: Can one be successful in buying mortgages today?
Yes, but it takes persistence and a marketing strategy, and the key to a good marketing strategy is self-promotion.
The greatest asset you can have is learning to sell yourself: the art of self-promotion. Show happiness and enthusiasm in your contacts. Develop a low-cost marketing strategy. Make prospective sellers glad they called you, even if they don’t make a deal with you. That person talks to many others. Marketing is the key.
Word of mouth and long-running ads
Q: How do you market your business and find notes?
Both through word of mouth and through advertising.
For example, on Saturday I got a call from an attorney in a small town where I had recently closed a deal. One of his clients, a farmer, came in to have a will drawn up and asked the attorney where he could sell his mortgage. The attorney gave him my number. I looked the mortgage over and bought it. That’s how powerful word of mouth can be in building a business over time.
I also advertise in small newspapers in rural areas, and I have many Yellow Pages ads that more than pay for themselves. Some even carry my photograph.
Q: What response rate should one expect from ads?
Studies show that people have to see an ad 33 times before they remember it. So the secret is to keep advertising. Don’t cancel after a few weeks or months.
I choose small, inexpensive classified ads and just leave them running, changing them every four to six months. I’ve advertised in one paper for over 10 years, and I get more mortgages from that ad than from any other.
Writing an ad that stands out
Q: What secrets can you share about writing ad copy?
My most successful ad without my picture is:
Mortgage Buyer Since 1970. Let Us Help You With Your Money Problems.
Today I got a magazine where I’m running an ad, and four other mortgage buyers have ads there too. Every one of them says something like, “Sold your property? We buy mortgages, annuities.” They all look the same except mine. I know I get calls because mine is different.
What he tells callers, and how he has adapted
Q: What are some of the key points you make to callers?
I tell them that I always leave money on the table for the other person. I tell them how good their mortgage is, if it is good, and that I’ll try to pay them as much as I can for it. I offer them a price for the whole mortgage and a price for a partial.
Q: What is the major way you’ve changed how you do business over the years?
I’ve found it necessary to go with the flow. Competition is extremely keen. I used to buy only at a higher yield, but I had to lower the yield I offer. Now I have a satisfactory number of notes paying me a good monthly income.
Over the years I tried other investment ideas, such as buying homes, remodeling them, selling them and carrying the loan. But I found that to do my best, I needed to get excited about one worthy ideal, and mortgage buying was it. There have been ups and downs, but it has been exciting and profitable.
