Motivating Note Holders to Sell

Success in the discounted cash flow business is like any business: it takes skill, training and know-how. It begins with an effective marketing campaign that builds a relationship and trust with potential clients. Building trust, creditability and a relationship helps ensure that your services are considered first if and when a note holder decides to sell. How do you get a note holder convinced that selling their note could help them out financially and reduce the risk associated with carrying the note? It isn’t easy, but some common sense techniques can dramatically improve your success rate.

The biggest mistake that most note brokers make is that they try to reach too many note holders and do not make contact with them enough times. Typically they send out their marketing material once or twice, offering to buy their note, and have very little uptake.

A client needs to see your marketing material at least 5-7 times before they start to notice what you have to offer. And that brings us to the second big mistake that many note brokers make: they don’t offer anything to their potential clients, other than they will take the note off their hands at discount.

For someone that is comfortable holding the note, simply offering to purchase the note at a discount is not an offer they will likely accept, particularly if they really don’t need the cash at that time.

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. It is therefore critical that you build a relationship and creditability with your potential clients to position yourself for success.

Of course the next question should be: How do you do build that relationship and creditability? The answer is surprisingly simple. You offer them something of value. You offer them helpful information for free and you get them to keep that information. If the information is well crafted and informative, you have won part of the battle. If you are successful here, your marketing efforts are used to effectively build a future client base. They will consider you as an obvious choice, if they need the cash, because you brought them something of value.

Next comes the really fun part. You can use the information to motivate your clients to sell the note. Carrying a note back on the sale of a property carries with it some risk. You simply start pointing out some of the risks and how to mitigate them. Is the new property owner carrying enough insurance? Are they paying their taxes? Is the property value being maintained (because the holder may need to own it if they are forced to foreclose)?

This type of information is valuable to the note holder, because it increases the value of the note, and it reduces their risk if they decide to keep it until it fully matures. It is also valuable to you, since some note holders will decide it is not worth all the risks they didn’t fully consider when they took back the note. This is especially true if a payment or two have been missed.

In conclusion, it is critical that your note marketing program offers something of value to your potential clients, and that you get them to keep that valuable information. Furthermore, you can use that information to motivate your clients to sell by identifying some of the risk associated with carrying the note that they may not have fully considered. At the very least an effective campaign with solid information, will build your creditability and increase your chances that if they decide to sell, you will be the first they consider.

For more information on the note business and a complete marketing campaign with proven success, visit my website at <a href="http://dcfturnkey.avintus.com" > Discounted Cash Flow Turnkey Marketing System <a/>.

Comments? Questions? Email Here

© HowtoAdvice.com

How to Advice .com