Earning Creditability with Private Note Holders

A lot of the TV infomercials and online promotions of the Discounted Cash Flow business portray it as an easy way to make loads of money. While it is possible to be very successful (and many are), the reality is, like any business, it takes time and skill to become good enough to enjoy real success. It takes dedication and perseverance. And like any business you must earn creditability with clients before they will consider doing business with you. It is not a get rich quick scheme.

When someone takes back a note to sell their property, they often did so to facilitate the sale of their property, at a price and on terms they could live with. In other words, carrying the note was preferable to a discount on the property. Over time, as the note seasons (matures), many would love to have the cash instead of collecting on the payments, but are often not prepared to accept a large discount (just like they weren’t prepared to accept a large discount on their property when it was sold). It is only when they really need (or want) the cash, that they become willing to accept a discount, which is the basis for your profit, regardless if you decide to broker the note to another investor, or keep it for your own portfolio.

The biggest challenge in the note business is finding a note holder that is willing to sell at a discount, at the time you are marketing to them. They need to be aware of the service you provide, at the time they are considering converting the note to cash. In order to be the first in line, you need to have already built up creditability with the client and you need to be “top of mind” when and if a client decides to sell their note. Therefore it is critical that you market to a specific group of note holders to build your “brand” in order to create and build creditability. It is far better to have marketing depth than to have marketing reach. In other words, your campaign should be directed towards marketing repeatedly to a limited number of note holders, rather than to a large group of potential clients that you will not contact again for an extended period of time.

In today’s “noisy” marketing environment it takes a brief campaign of at least 5 and probably 7-8 “touch points” to the potential client before they will start to recognize your brand.

Furthermore, you need to represent yourself and build your “brand” as a professional with a well-crafted and complete campaign. The competition in this business is as fierce as any business: perhaps more competitive. There is always someone out there that will pay more than what you can and accept a lower commission or return on their investment. In order to be profitable, a client will need to recognize the added value that you bring to the table.

In conclusion, you need to have creditability with potential clients as an expert in the field. This can be achieved by a regular, well-crafted marketing campaign with a consistent message to build up your brand. You will achieve more success by marketing to a fixed group of note holders regularly (marketing depth) than trying to spread your campaign out too far by marketing to a large group (marketing reach) that you can only afford to contact periodically.

For more information on the note business and a complete marketing campaign with proven success, visit my website at http://dcfturnkey.avintus.com.

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