You probably have heard you can make great profits buying seller financed notes, if you have your own money. But what if you need to make money before you can think about investing? Becoming a note consultant may be the answer for you.
Many people make a considerable income “referring” or “brokering” notes to companies with the funds to buy the notes. Sometimes called “birddogs” or “finders”, they spend their time finding seller financed mortgages, trust deeds, and real estate contracts for Note Buyers, Funders, and private investors. In exchange, the note consultant earns a fee for setting up the transaction. Here are five things you should know if considering a career as a note broker.
1. It is a real business – Some people would have you believe that you can do it from home and just sit in your pajamas waiting for the money to roll in. Well, most note consultants actually do operate their business from home (although I highly suspect they are not in their pajamas). The important part is that it is a business and needs to be treated as such. It is not a get-rich-quick career. You will have to work, market you business, and develop contacts. Treat it as a business and your chances of success go up greatly.
2. It is a numbers game – Just finding a person interested in selling a note is part of the process. There are plenty of notes out there, but not all of them are buyable for a variety of reasons. Once you know which notes are good and which notes are bad, you will save yourself a lot of time. If you don’t have a deal after the first 10 notes you see, don’t be surprised – it may take awhile.
3. Get the phone to ring – Some people just starting out spend a considerable amount of time worrying about company names or how pretty the stationary looks. Marketing your business to find deals should be your number one priority. In either case, the more notes you see, the more deals may be found. If the phone does not ring, it doesn’t matter how unique your company name or letterhead.
4. Learn the business and then learn the shortcuts – You need to “get educated” in the note business. The basics of the note business are not very hard, but you must understand the procedures and terminology. Be sure to learn the insider tips and shortcuts from someone that has actually succeeded in the business.
5. Get Connected – Finding the note seller is only one-half of the equation. You need to have somebody to buy the mortgage notes. When possible, you want to deal with institutional funders but sometimes you will work with private investors. It might be a particular note is only a good fit for one or two funders. Get a list of funders and create your own directory of note buyers – companies or individuals where you can sell the mortgage notes and earn a referral fee.
Note brokering is a fabulous industry that enables you to work full-time or part-time from the comfort of you home. But the note business is like any other successful venture; it needs to be treated like a business and not a hobby or a get-rich-quick scheme. Remember these five tips and you will be well on your way to supplementing your income in the private note industry.
Considering a Career As a Cash Flow Note Broker? Here Are 5 Things You Should Know!