Imagine gathering 10 note buying experts into one room and asking them,
“What are the best methods for finding real estate notes?”
Would you be waiting expectantly to hear their response?
Well we have been honored to pose this question to a group of cash flow professionals with over 200 years of combined experience. Read their answers here!
The Best Ways to Find Notes
(Experts are listed in alphabetical order by last name. Just click on the link attached to the name to read the full interview article on how they got started buying and selling notes).
Jeff Armstrong of Armstrong Capital – 20+ years
I can (and did) write a book on this! After 21 years in the business and testing of many different marketing methods we have found that a marketing plan for notes should include 3-5 methods to find notes. A good marketing plan would include: direct mail, classified ads, networking, direct contact and internet (at a minimum having a website where people can fill out a worksheet online and submit to you).
Scott Arpan of Advanced Seller Data Services – 18+ years
Brokers must use a multi-pronged marketing approach to finding notes. While I would love to have brokers spend all of their money on my lists, they are better off in the long run developing a website and mailing note holders. Direct mail will inform note holders of your services and spark an interest in your company without a search engine redirecting them to a competitor. The website will give a note holder a greater depth of information about your service and why they should trust you.
In the long run I believe, and research has supported, highly targeted mailing lists are cheaper than developing a website and going to the expense of pay-per-click and other methods for obtaining a high page ranking. While a high ranked website may draw more note holders, direct mail can focus on notes you can actually close with much less competition.
Lisa Moren Bromma, Author and Investor – 20+ years
I like a combination of Internet and direct marketing, networking and teaching potential strategic alliances how to create marketable paper.
I am a big believer in working with third-party referral sources such as Realtors, Estate Attorney’s and CPA’s. I have developed programs that target these audiences specifically, including a CE program that helps professionals understand the benefits of why seller financing makes sense in today’s market, and these professionals get continuing educational credit hours towards keeping their licenses current.
I frequently attend real estate investor meetings in my local marketplace, as they can be a great source of notes and real estate.
I have written 3 books published by McGraw Hill. This establishes me as a credible expert with professional audiences. I use them as I would a business card.
Greg Gehlen of Canyon Capital – 8+ years
Direct mail for consistency and working with the various servicers of seller financed paper.
Not trying to brown-nose, but your program “Personal Profit Series: Notes” helped me out when I was first starting and I highly recommend it.
Dave Krunic of Reliant Financial – 20+ years
Our business is referral based. The bulk comes from note brokers. We also have referral relationships with bankruptcy trustees and probate attorneys and lately direct via our web site.
Many of the brokers we work with have been sending us cash flow notes for 12 plus years or better. They have been around long enough to also develop recurring business. They work with real estate professionals, insurance agents, CPAs, and local networking groups like the Chamber or Rotary Club.
W. J. Mencarow Founder of Paper Source Online – 30+ years
1) Paying off notes on which you are the debtor. Try to negotiate a discount. Even if you can’t, you should do it anyway. Paying off a note is buying that income stream, because each month you’ll have that payment in your pocket instead of giving it to the note holder, which is the same as if you had bought a note that paid you that amount each month. Better, in fact, because you never have to worry about a missed payment!
2) Creating your own notes on property you buy wholesale and sell retail (see “Deals on Wheels” by Lonnie Scruggs; he uses mobile homes in his examples, but the concept will work with almost anything).
The best method to find quality notes to buy is direct mail.
Ric Thom of Security Escrow – 25+ years
The best methods for finding deals are looking through public records, but with a twist. I would calculate what the present balance of a contract would be after payments had been made and actually make a discounted offer to the contract holder. This offer would be subject to a number of items that comprise my due diligence. Having a figure as to what they can actually get for their note is so much more effective than just saying, “Hey, I’ll pay cash for your note”.
Another method is to become an affiliate of several realtor boards and advertise that you will pay a referral fee to its members. Join a local real estate exchangers group. Realtors are a great resource.
Another method is to work with an escrow/servicing company of seller financed notes. Often, the owners of these companies don’t have the time, knowledge or desire to buy and sell notes. You can either offer them a flat fee to allow you to place a flyer with the payments that go out to the sellers or you can offer a percentage of your gross profit on any contracts/notes that are generated from you soliciting their sellers.
Or you can do what I finally did which was to start/buy an escrow company.
Mike Wood of NoteDocs – 10+ years
I would say the ultimate best strategy for finding notes deals is to work with the seller to create it. Eddie Speed has helped me see the vision of this and the value in such a strategy especially in today’s market.
Aside from being there at the creation I would say the next best method for finding notes is to build a referral pipeline. Getting leads from a referral source with whom you have a good rapport will always be your best bet.
If you are going to do direct mail then you need to understand that it is a numbers game and requires a lot of mailing to many individuals over time. the best strategy there is to build a big list, continue building it and when mailing any item have something that identifies you so they become familiar with your “mark”.
It’s a waste of valuable time and money to market your note buying services to the 94% of the population that don’t hold a note.
In our business we’ve used 5 targeted methods for locating real estate notes.
1. Ads – Using ads to find people receiving payments on real estate notes
2. Direct Mail – Sending letters or postcards to a verified list of note holders
3. Referrals – Networking with professionals to obtain referrals
4. Online – Building an online presence with websites, directories & SEO
5. Building Your Brand – Establishing yourself as an expert in your local area
We cover this in more detail in the Finding Cash Flow Notes Training and encourage people to check out the free video mini-course!