Written by Jeffrey R. Armstrong – President/Owner of Armstrong Capital
Your favorite Master Note Buyer – Straightforward, Honest, Fair…
Whether you are new in the business or experienced in the cash flow industry it is my opinion that our number one job as a note broker is to find the deals. The majority of a note broker’s time is spent on the marketing of their business. I would venture to guess that 60-70% or more of my time is spent trying to find notes. The other 30%-40% is split between the due diligence involved with accepted transactions and business management.
I seem to get a lot of calls from new brokers and consultants in the cash flow industry complaining that the business doesn’t work or isn’t working for them and they don’t know why. So I ask them what they have done. I hear many different answers including things like they made business cards, talked to a few people, mailed out 100 postcards or letters, called a real estate agent they knew, put an ad in a paper for one week, put a sign on their front lawn, emailed some of their friends or stuck a flyer at the bulletin board at their local grocery store.
These are real marketing methods that note brokers have used. And believe it or not they are methods that have gotten note brokers real leads and closed transactions. Could they have gotten lucky and stumbled across a deal doing what little they did? Yes, absolutely. But is it going to be just as easy to find the next deal? No. So let me tell you why I think this business doesn’t work for those people that have called and asked me and for the ones that will no doubt call me in the future.
They didn’t do anything wrong, the simple answer is they just didn’t do enough. To get a continuous flow of real leads and closed transactions they should have handed out their business cards to 1000 people, sent out 10,000 postcards, talked to 100 real estate agents, put an ad in a paper for 6-8 weeks, put 50 signs in different places, emailed all of their friends once a month, and put flyers at every grocery store in a 30 mile radius. Do you see what I mean?
As a one man operation let me share with you some of my statistics as far as numbers of calls (responses generated). A “call” for me is an actual phone call from a note holder, but it can also be a fax, an email, a written letter or a worksheet filled out online and submitted to me from a note holder as well. From January 1, 2005 to December 31, 2008 (a four year period) I received 3,047 new calls directly from note holders.
That breaks down to 761.45 per year, 63.48 per month and 14.65 per week (52 weeks). To get those calls I sent out 54,800 letters, 194,400 postcards, ran 10 ads simultaneously four times a year for 6-8 weeks at a time, kept in bi-monthly contact with 26+ good referral sources and directed all of them to my website to educate them further. (Not to mention all of the follow up, but that’s another column.) Are you getting the picture?
Now, did I start out with this kind of marketing capacity? No. I gradually built up my marketing plan over the years to include various marketing methods that were personally tested and proven to get the kind of volume I wanted and could handle. I’m not saying that you have to do this amount of marketing to get a deal. But, don’t think if you do a few little things once or twice that you should get a deal from it. It’s just not that easy.
The bottom line is that marketing for notes or any other cash flow is a huge numbers game. The more people that know what you do, the more people that you have contacted, the more people you have exposed to your business, the more people you have educated about your business and the more people you have kept your name in front of the more real deals will come across your desk and the more transactions you will close. TWITA! (That’s What I’m Talkin’ About!)