Unless you are fully committed to the Seller Financed Note Business and have a solid business plan, you will have trouble finding success. In my extensive and continuous career in the note busines thus far, I have had the opportunity to coach and mentor many note professionals. This experience has allowed me to witness first-hand not only success stories but also more unfulfilled potential than I care to talk about. Through it all, I always look for the common denominators of every situation.
In this article, I will cover five reasons people don’t make it in the note business. We’ve all seen them, heard of them, and felt bad for them. And some of you reading this may be on the verge of becoming one of them if you don’t make a change. So here are five reasons you won’t make it in the note business:
1. You are “trying out” the note business – The notion of trying something out speaks to a lack of commitment. All too often, someone will decide be a note professional to broker notes and eventually buy notes because they see the success of another note professional — but what they don’t see are the years spent understanding pricing, honing negotiation skills, refining marketing plans and working nonstop towards success, seven days a week.
It is my belief that many people focus too much on the results and not enough on what it takes to get there. I like to say that everyone wants to have a best-seller but nobody wants to write the book.
Making it in the note business takes more than interest; it takes full commitment. It takes the kind of commitment that Hernando Cortez had in 1519 when he and his crew set sail on their final voyage from Cuba to Mexico. When he arrived on the shores of Yucatan, it is said, he turned to his army and commanded them to burn the boats. The lesson was simple; they were either going to conquer and come back on someone else’s boats or die trying (I recently watched a movie; I am not a history buff).
Luckily, a note career does not require your life, but some would argue that it does require a piece of it. If you can’t fully commit to the note business, don’t waste your time.
2. You aren’t coming from a position of strength – I see many individuals get started in the note business with the best intentions and even the strong work ethic needed to succeed long term. But if you are lacking the financial stability to get started, you may find it a tough go.
When I was first brokering notes years ago I didn’t earn a real commission in the first nine months of my career. It takes time to build relationships, create context, make offers, and go through the process of a transaction. The note business is not like most careers where you will receive a paycheck two weeks after starting nor is it any kind of get rich quick business. More like get rich slow.
Worse yet, it is not uncommon to have a couple of note transactions accepted only to see them fall apart. This can be crippling when you were depending on them to pay your bills.
Do yourself a favor and don’t start in the note business until you either have six months of living expenses saved in your account, have 6 months of your marketing budget set aside or you are in a situation, such as living with your parents, where you can keep your overhead very low.
3. You don’t believe that you need help – This type of thinking runs rampant among the different personality types who get into the note business. They’re generally the type of people who don’t want to have a boss, and believe they can do anything they put their mind to. There is some truth in that statement, but everyone needs help from somebody. The quicker you realize that, the better off you’ll be.
Think about it this way: Most people’s issue is not that they don’t know what to do; it’s that they don’t do it. If you don’t believe me, ask yourself how many diets you’ve ever been on. You know what you should eat and that you should exercise … you just don’t do it consistently enough.
Needing other people goes beyond coaching, though; it’s also in the organizations that you join and your level of activity within your local, state, or national associations. I have heard many times that practitioners don’t gain business by going to these events, and in many cases, they could be right. But it’s not just about that. It’s about the level of community that you create for future business.
In September, I will be at the Paper Source Annual Note Symposium in Las Vegas and hope to see lots of you there. First off: yes, to help note professionals build their business. But the other reason is to get together with the real players in the note industry and have the feeling and sense of community. This is important because, when people feel community, they don’t feel alone, and when they don’t feel alone, they feel a common purpose, and when they feel a common purpose, they gain identity, and when they have identity, they will do things they wouldn’t have done before.
They say you can judge the level of success someone will have on this Earth by the number of awkward conversations they are willing to have. You are more willing to do the things you don’t want to do (like prospecting and negotiating) when you identify yourself as a person who does those things. For example, most people don’t wake up in the morning and say, “I want to cut down trees today,” but when you identify yourself as a lumberjack, it’s just what you do no matter how you feel. Identity matters and community helps gets you there.
4. You don’t have a plan – Can you imagine stepping into the kitchen for the first time and trying to make a cake without knowing any of the ingredients? I know it sounds ridiculous, but that’s exactly what you do when you try to start a business (and that’s what this is; a business) and you don’t have a plan to follow.
Your e-mail doesn’t dictate what you do every day — your plan does. If you are in the note business and you don’t have a plan to follow, you can go to my website and download a one-page marketing plan for free (it is in the Note Pro Package). I also have a free weekly email Note-able Newsletter for note professionals you can sign up for as well. Whether you use my template or someone else’s or develop your own, following a plan is key.
I am a big believer that you need to assess where you are now so you don’t regret where you end up later. Know where you stand and follow a map that gets you to where you want to go.
5. You get bored too easily – I am well aware that we are living through what is probably the most ADHD / “shiny object syndrome” society that we ever have, but to be successful at one specific thing (in this case the note business) you have to resist. I love technology and gadgets as much as the next person, but if you are not careful, these tech tools and trends will work against your level of success rather than help you be more productive.
The note business has and always will be a business where personal relationships matter, yet we have become so addicted to our phones that we have actually learned how to be completely alone and isolated in a crowded room. When we aren’t checking for e-mails, updating our status, or talking on the phone, we are playing games and scrolling for an app we haven’t opened in a while. Stop it!
Learn to batch your e-mails (you only read, process, and respond to emails two or three times a day) and only check your phone at certain times of the day. Refocus your energy on what actually matters, which is following your plan, making contacts, setting up your automated systems, educating yourself, staying motivated, and sustaining real relationships with real people.
If you aren’t deliberate in what you’re doing, you’ll find yourself wasting time before you know it. Hope this helps! Be kind, keep safe and stay healthy. 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 investor and broker specializing in the performing seller financed note industry since 1991. 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 to email him and subscribe to his weekly Note-Able Newsletter.