All Forum Posts by: Tim Fitzgerald

I couldn't agree more with @Jay Hinrichs re direct mail. It's a very effective way to source. Know that it's a numbers game, and, as long as you expect that going in, a 2% response rate could be a reasonable initial target (if you're just starting from scratch with your first mailing). Once you get a consistent DM campaign going, every $500 spent should net you at least $2,000 profit on the low side. With a regular monthly mailing program along with a credible, memorable marketing message (Jay mentioned the "yellow letters"... it's important to point out that he REMEMBERED those letters, and because he himself probably didn't respond to them is immaterial because he wasn't looking to sell.. the big key is that IF he HAD BEEN looking to sell, he MIGHT have responded to one of those letters because they got his attention).. and, a subtle point to make is that the use of COLOR makes a big difference in direct mail. A letter doesn't have to be fancy-- as long as the RIGHT message is on it that says the right thing.

No one will respond unless they are motivated, and that changes from month to month-- that is, a note holder who receives one of your mailings may not respond initially, but may become motivated down the line and by then, he's already seen several of your letters so he already "knows" you, and when he becomes motivated, he responds.

Happens all the time. The bulk of my business comes from people who have seen several of my messages over a period of time.

Seems to me that unsolicited texting/emailing/cold calling (IF you can get the phone # or email address at all to begin with) is essentially useless... whereas, with direct mail you are pretty much guaranteed a direct avenue to that note holder (assuming you are using a bona fide, prescreened list).

Having had considerable success with direct mail, I can tell you that, in my experience, the bulk of note holder responses come on the followup-- that is, after they have seen your message several times. At any given point in time, X number of note holders become motivated.. every month you will probably get responses from some who didn't respond last time, etc.

No need to "cold call"; the interested parties WILL call YOU when THEY need money. There are no exceptions to that law.

That's why i think you need to look at direct mail as a marketing PROCESS and monitor your response rate, i.e., 2-5% or whatever. If you make, let's say, $2,000 for every $500 invested in the mailing campaign, then there's nothing stopping you from scaling up from there.

To Don's point, if your aim is to refer/broker the note to a direct investor, the only thing you are bringing to the table is that you found the note first. But, that's a BIG thing, and is really the only thing that matters. If you're the one the note holder calls first, then it's a simple matter to obtain a quote, then get a conditional agreement signed (can be "boiler plate"). 

The "little guy" can market every bit as effectively as the direct investor, PROVIDED your marketing material is professionally done and hits on the RIGHT message.

To Don's point, 

You can also get started by finding and referring notes for nothing out of pocket... just some of your time. You build up capital this way. Of course, you have to get good at marketing for notes and/or developing your own referral sources. All of these skills can be developed.

Tracy mentioned Jon Richards-- I agree, he was the best. A real loss taht he is not around anymore.

Also, Superearnings Plus by Joel Cassway is a fantastic resource for note investment formulas.

Yes, @Don Konipol I agree... I have thoughts about our educational system in this country, and they're not all good.

@Marco Bario I figured I wasn't the only one...

As Bill Mencarow related well over, I think, 25 years ago (I am paraphrasing), and I concur:

As a note investor, it's amazing as to the # of calls I get from people who are PAYING on a note (NOT holding a note) and think they can "sell" it [to relieve themselves of the obligation to continue paying on it]

Not sure how or why they could think that...

Anyway, one of my first questions whenever I get a call is: "Are you collecting payments on a mortgage now?" I let them know that I am only interested in beginning a conversation IF the answer is affirmative.

A 3 day class such as you describe can be useful in that it may serve to stimulate your thinking.

Know this, however: The usual "seminar guru" formula is essentially the same as it was 30+ years ago: draw them in to a class that is more conceptual/introductory in nature as opposed to true, genuinely substantive "nuts and bolts", and then upsell them.

IMO, the only time it makes sense to enroll in a backend course or "mentorship" program is IF the course/instruction is COMPLETE and the help that you'll need is readily accessible-- meaning that you're able to get the answers to questions that pop up as you go along and get deeper and deeper into things.

You can do extensive reading about note investing, or any subject for that matter, but it's only conceptual until you actually get out and do it. A fair # of people on these BP forums are seemingly able to take that first step, or get a good start after reading/interacting through this site.

Having said that, if you're like me, concepts don't really "sink in" or get internalized until you have an actual potential "deal" or transaction to check out or pursue and you've got to execute the steps and do things that you don't yet know how to.

In my experience, many people have trouble or get tripped up at certain points along the continuum. That's where it may pay to have someone with experience to consult with-- one question/step at a time, generally speaking. That's how I got my start in this business 22+ years ago. I find that credible mentors like I had are really hard to find these days, so I consider myself fortunate.

The big key is finding the right person, course, mentor, etc. who will give you a GOOD "bang for buck" along with SUBSTANTIVE direction that you can use WHEN you need it. (And, if we're talking about $ THOUSANDS of "bucks", run-- don't walk-- away from this person.)

Absolutely-- direct mail works. If you're using a quality list AND your message is effective (I agree, post cards work best over time although I usually start out with a letter and then follow up with post cards), IMO you should ultimately be able to close an average of 1 note per 1,000 mailings. A successful mailing campaign can yield somewhere around $2,000 for every $500 invested.

There are what we call "institutional" buyers of NOTES (as opposed to "banks" in the true sense of the word). I would group FNAC as one of the more visible amongst those (even though they are a subdivision of a bank themselves), but there are others that are pure investors (NOT lenders) who can help new brokers navigate the entire process from submission to closing. Your note marketing skills are your most valuable asset... if you can find QUALITY performing seller-financed notes, there is a ready, willing and available buyer for them.

Of course, finding seller-financed notes is a PROCESS, and I disagree with the above comment on [postcards not being effective]-- actually, I've found, in over 22 years of direct-mailing note holders (and also potential referral sources) that the postcard is the most efficient and cost-effective way to get your message DELIVERED. Various marketing studies have been done over the years which suggest that your recipient has an average of somewhere around a 7-second attention span before he/she "pitches" your card. However, if you can deliver your message AT A GLANCE, and it looks professional enough AND you tell them to KEEP your card for future reference, you may be surprised as to how well your closing ratio improves over time.

(I usually START OUT with a letter and then follow up with postcards. Most of your closings are going to come on the followup, and that's where most note players fail-- they expect to get results on the first mailing. Most of the time, it doesn't work that way.)

Fact is, MOST direct mail is discarded and a 2% response rate is generally considered good in ANY kind of direct mail program across industries. But, in the note business, if your marketing piece is good enough AND (this is key) you are mailing to a QUALITY list of BONA FIDE note holders you should be able to make AT LEAST $2,000 for every $500 you spend if you are brokering, for example.

P.S. I think Leland's a good man. He's been in business since at least 1993.