New mortgage note buyers face stiff competition from more established mortgage note buying companies. One of the biggest disparities between individual note investors and these companies is that the latter usually have bigger marketing budgets, which makes them more visible to prospective note sellers.
Even so, there are some cost-effective marketing strategies new investors can use to help level the playing field against institutional or large, experienced corporate note buyers. If you’re ready to market yourself as a mortgage note buyer, and you need to do it on a conservative budget, below are six helpful tips.
1. Create Official Business Cards
This one may seem like a no-brainer, but business cards are vitally important when connecting yourself with clients. In all sales transactions, the goal is to make the sales process as effortless as possible for the seller. Business cards help you do this by giving sellers a tangible reminder of your expertise and knowledge. By immediately presenting your contact information instead of requiring a lead to type it into a smartphone, you make it easier to engage the lead. Depending on card design, printed business cards typically cost between $0.05 and $0.20 per card.
2. Create a Facebook Business Page
If creating a custom business website doesn’t figure into your budget yet, using a Facebook page as your website has two advantages: You can create the page for free, and the fact that the page doesn’t have a payment gateway shouldn’t affect your bottom line, as it would a retailer’s.
In addition, unlike a standard business website, a Facebook pages give you the opportunity to create social media messages that help generate leads. Mortgage note buying companies use social media platforms to drum up business, so why not you?
3. Set Prices That Beat the Competition
Mortgage note buying companies have higher overhead costs than investors as one-person operations. Since your operating costs are lower, you have the chance to offer better prices for notes while still generating the same profit as your institutional counterparts. To do this, you’ll need some investment capital, which you presumably have if you’re ready to start acquiring notes.
4. Attend Real Estate Conventions
Remember the business cards? Real estate brokerage conventions are great places to distribute them. It isn’t uncommon for experienced real estate brokers to know a list of mortgage note holders who want to liquidate their notes.
Furthermore, when brokers learn you offer better prices than most mortgage note buying companies, they have an added incentive to help you broker deals: Percentagewise, the take they receive from brokering your transactions would be higher than the take received from brokering most institutional transactions.
5. Deliver Marketing Material to Homes for Sale
Print some inexpensive brochures that advertise your interest in buying seller-financed mortgage notes. Then, when you’re traveling around town, keep an eye out for “For Sale” signs for residential and/or commercial properties. Record the addresses, and look up the properties on RealtyTrac or Zillow (or better yet an MLS system if you have access). Then, place brochures in the mailboxes of properties that have been on the market for at least three months or more.
Your offer to buy self-financed mortgage notes can entice owners to use seller financing to stop their properties from languishing on the market. Delivering the brochures is essentially like sending direct mail, except you don’t pay a marketing agency to do it.