As we started with last month this is the continuation of everything you need to know about the challenges and essentials of being a note broker, as well as important tips to help you get off to a strong start.
Understanding that there are many different players in the seller financed real estate note industry— individual note buyers, institutional note buyers, title companies, escrow companies, real estate attorneys, servicing companies, appraisers and processors, to say nothing of note holders and payors. Nevertheless, the real movers and shakers are the intermediaries, the people constantly moving between and communicating with these players: the professional note brokers.
We are the middlemen (in a good way). The note broker is the workhorse of the industry. He’s a salesman one moment, a note holder’s advocate the next; he’s an analyst, an auctioneer, a consultant, a negotiator, and a marketer; he occasionally performs the services of an appraiser, a clerk, and a loan processor; he sometimes even accommodates his note holders on nights and weekends, and often works well beyond forty hours a week.
Basically, a note broker does a little of everything, and for that, he’s paid a modest commission (provided, of course, that he closes the deal). It’s no wonder, then, that so many note brokers cycle in and out of the industry. It’s also no wonder that demand for their services remains high even in slow markets.
Overwhelmed? Don’t be: this second installation of this three part series guide will give you the info you need to know. Here are three more tips of a total of nine, continuing on with number four.
4. Develop a personality.
That’s why as a note professional, it’s important to develop a personality. We’re not saying you don’t have one: we’re just suggesting that you lean into it. Whether you’re a pet lover, a motorcycle enthusiast, a bass fisherman, a foodie or an online gamer, don’t hide your personality: embrace it. Your personality fosters relationships, which builds your reputation, which generates leads. You get the picture.
Getting involved in the life of a community helps build your relationships, but it’s important that your involvement be consistent with who you are as a person. Enthusiasm is difficult to fake, so if something you say or do doesn’t ring true to you, people will pick up on it.
If you’re an avid carnivore, for instance, looking for leads at an ASPCA meeting probably isn’t a good idea—and in fact, it may cause both the people you meet and the people you already know to think of you as a hypocrite.
Instead, you’re better off finding opportunities to broadcast yourself to people with whom you have common ground. As far as those opportunities go, some say it’s better to keep politics and religion out of business, and in many cases those people are right. But politics and religion build strong communities, and depending on where you are, getting involved can have huge benefits. At the same time, it’s important for you to decide what you’re comfortable wearing on your sleeve.
Finally, we’re talking about work here, so it’s important to see personality in a professional context. In general, moderation and a sense of boundaries are keys to success. Come on too strong or get too personal in your dealings with clients, and you may end up alienating more people than you connect with.
Instead, let note holders be the ones to open up to you, and they’ll often be happier for it—after all, many people enjoy talking about themselves more than anything else.
5. The best note brokers have endless hustle.
The note industry has had a rough few years. Many note brokers across the country are still reeling from 2008′s real estate fiasco. Meanwhile, note brokers increasingly have many more avenues these days for visibility and leads. The fact of the matter is, things have changed, and as a new note broker, you’ll have to accept that more than anyone. The days of plenty are over, and that means the only way to be a successful note broker is to have hustle.
Talk to any top producing note brokers about their work habits, and you’ll find he or she is an incredibly hard worker. Successful businesses don’t create themselves, and being a Note Broker is no exception. There’s a direct correlation between how hard you work and how successful you will be.
Still, having hustle doesn’t simply mean working twelve-hour days from Monday to Friday. After all, working in the note business isn’t just about putting in a lot of time—it’s about putting in the right time and doing what’s necessary to close transactions.
Because of this, hustle is also about being prepared to work at a moment’s notice. Are we saying you should you neglect your responsibility to your family or your spouse for the sake of work? Of course not. But if the benefits of working outweigh the benefits of whatever you happen to be doing when an opportunity presents itself, you need to be prepared to suck it up.
If this all sounds incredibly difficult, here’s a bit of encouragement: most people, and in particular most note brokers, don’t work hard enough. If they did, they’d all be top producers. So don’t worry about competing with every note broker across the country. If you work hard enough, you’ll be in a class of your own.
6. Measure, analyze, and evaluate.
We’ve discussed the importance of hustle in becoming a successful note broker. But no matter how hard you work, if you don’t measure your performance, you won’t know whether that labor is yielding results. This is not just a fact of the note business: it’s a fact of life.
To a certain extent, we improve subconsciously. Through repetition, we learn how to perform a function more swiftly and more efficiently; through observation, we internalize better practices and adopt them, often without even realizing it.
The most significant gains come from consciously reflecting on the way we do things and actively questioning whether that’s what works best. The top quarterbacks spend hours watching film, examining their throw and looking for missed opportunities. The best teachers don’t wait for their annual evaluation to determine if they’re doing all they can for their students. Instead, they ask themselves that question after every lesson.
Similarly, as a note broker, you should constantly be examining and measuring your performance. You can do this in a number of ways. First and foremost, consider keeping a daily journal to record your impressions of that day’s work. Keep count of how many note holders you talked to and how those conversations went.
At the end of the day, determine what you accomplished. Did you get enough done? If not, why might that be? No need to get incredibly detailed: just get into the habit of jotting down a few ideas. You’ll have time to organize them into something more coherent later.
You can also learn a lot about your performance by taking a long view on your process. Track your note holders from beginning to end and figure out what your pipeline looks like. Are some parts of your strategy working better than others? Do you tend to lose note holders at a particular stage? If so, you might need to change your approach.
Finally, crunch the numbers to see the results your work is really getting you in black and white. Check your list of note holder prospects against the numbers you have and the numbers you need. Getting a lot of leads, but not getting a lot of closed transactions? You may be better off devoting more time to fewer note holders. How many closed transactions do you need to make a living? Compare your stats to that number and set goals accordingly.
This brings us to the last step in the self-evaluation process: implementation. If you’re not going to try to correct the mistakes and inefficiencies you’ve worked hard to uncover in your business practices, what’s the point of seeking them out?
Start making a weekly list of skills you plan to work on or solutions you plan to try out. At the end of the week, evaluate your progress. Did you practice what you set out to practice? Did the corrections you made lead to more note holder prospects, more closed transactions, more success? If not, why do you think that is, and what else could you try next week?
Make no mistake, self-evaluation is usually not fun, and it can add a lot of work to an already hectic schedule. But if you’re really committed to being a successful note broker, you’ll find the time—and pretty soon, you’ll see the results.
Hopefully, these second set of three tips we’ve given you will help you get off to a strong start. But as any seasoned veteran will tell you, this is by no means an exhaustive account of the potential challenges you’ll face as a note broker. It may be a while before you start closing deals regularly, and you can be sure you’ll have your share of failures and awkward or embarrassing moments. But don’t get discouraged. Like many jobs that require a high degree of social interaction, the note business is best learned by time on the water, by doing, by interacting with as many leads, note holders, note buyers and referral sources as possible. So get to work! Next month the final three of nine concrete tips in my third installment of this three part series. 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, your favorite Master Buyer, has been in the cash flow industry since 1991. Specializing in the private mortgage note niche and seller financed notes he can be reached at 818-865-2322 or by email at firstname.lastname@example.org. For beginning to advance training opportunities, resources, to learn more or to obtain a quote visit armstrongcapital.com and secretsofpaper.com.