If you’re considering note brokering as a career, or you’ve just gotten started, the following secrets can make a difference in your probability of success in the note business. Some of the old “note broker sayings” that many new note brokers take to heart are no longer as true as they were before the Internet and the real estate market problems after 2006. Learn some new secrets about how to start your new note brokering business with less risk of failure.
A great many note brokers never make it through their first two years. They underestimate expenses and overestimate income. That’s a deadly combination. Mostly it’s high expectations for income and a real letdown when they’re not doing deals like they thought they would. Just because you go into the note business, build a website and then tell all of your family and friends, it doesn’t mean that you’ll start receiving tons of referral business from them. You may get a few from family, but don’t forget that your friends have other friends, and they may be in the note business as well.
Then there’s relying too much on whatever marketing has worked for you in the past. Don’t think that there will be leads coming in every week from your mention of your website or classified ad marketing. Definitely put in as much time, effort and money into marketing as you can. Every phone call, meeting or networking event is a potential commission. Don’t look down on any note holder prospect, as you may regret it. One of the biggest deals I did my first year was because nobody else wanted to work with the note holder. His personality turned out to just be misunderstood and after several conversations found out he had a great need for a lump sum of cash.
Secret #1 – You Don’t Have to Be Good at “Sales.”
You don’t have to be a sales person to succeed. If you are great at “selling,” that’s good. However, it isn’t required. There are ways to present yourself and handle your note business that will separate you from the “pushy note broker” image. Think “note consultant” for better results. Try to stay out of “sales” mode, even if you’re starving for a deal.
Secret #2 – Think Small for Big Note Business Success
Thinking small doesn’t mean not planning for growth and success. It’s about understanding your status as an independent contractor and setting up your note business practice and marketing to maintain your business as yours and portable. I am a firm believer in doing lots of small deals every month rather than one big one a couple times a year. Singles and doubles will cover expenses and should give you some profit, the home runs will come.
Secret #3 – Develop a Marketing Plan and Stick to It
Beginning a new career as a note broker is exciting and you’ll want to hit the ground running. Your long-term success depends on many things, but a good beginning note business marketing plan is one of the most important. Don’t let your excitement and enthusiasm to talk with a note holder right away keep you from the all-important business planning and budgeting tasks. The right tools and knowledge will help you to focus on important note business practices and get a fast start on building your note holder and referral base without spending a lot of money.
Secret #4 – Develop a Budget, and Stick to That Too!
It’s critical in your note business career that you not only cover your marketing expenses, but your personal living costs as well. Spreadsheet your personal living expenses and don’t leave out anything, including cash out of pocket for fun or coffee. Cover that, add a little, then do your planning for a business budget.
Most note brokers who fail just do not plan for anything else. It’s a big step to decide on being in the note industry and start a new note business. It’s exciting, but scary as well. Most new note brokers fail in their first year or two, but you do not have to be one of them. They fail because they do not plan for success. Sometimes starting part time is a better approach, as you can at least count on some income. Sure, starting part time is more difficult, but if it means the difference between failure or success, it is worth it. Often just one commission can cut the ties to the old job and move you to full time. Remember success demands action, keep on marketing, it’s going to work! TWITA! (That’s What I’m Talkin’ About!)
Jeff Armstrong of Armstrong Capital has been a note broker and investor specializing in the seller financed note industry since 1991. He can be reached by email at email@example.com. For more updated and current information on how he can help you with your note business, your note investments or to request a quote on a note you currently have visit www.armstrongcapital.com.