Identifying Target Groups for Discount Notes

Networking is the primary method of generating quality leads in the Cash Flow / Note Business and networking will work hand-in-hand with your business website and your newsletter marketing campaigns.  As you become active on social media or personally in local networking opportunities, you should pay special attention to those you meet that are members of certain professional groups.  Such individuals are likely to come upon individuals with notes or other cash flows they may need to sell.  If you are using Pipedrive or a similar type of CRM software, each of the below should be set up in your “GROUPS” function.  Your goal here is to build “meaningful” relationships with members of these groups.  We have divided these groups into “primary” and “secondary” as a reference to their level of importance.

  • Accountants, CPAs, Tax Preparers, Enrolled Agents:  This is a primary group for lead referral since they will tend to know “everything financial” about their clients.  They will not only know which client’s own private mortgage notes, business notes, etc., but also which clients are having financial difficulty.  Some in this group will provide tax or financial planning in addition to their standard accounting services.
  •  Attorneys: This is another primary networking group for Cash Flow consultants. There are several types of attorneys that will frequently come in contact with note holders including real estate attorneys (private note closings), attorneys practicing family law (divorce and estate probate considerations), bankruptcy attorneys (personal bankruptcies), and even occasionally criminal attorneys (receive notes in lieu of fees).  In addition to private residential mortgage notes, this is a group that can send you referrals regarding inheritance advances, pre-settlement advances, structured settlement cash outs, and senior life cash outs.
  • Bankers / Loan Officers:  This primary group can be a good source of private notes and especially those involved with taking applications and approving loans.  Although involved daily with traditional real estate lending such as conventional or FHA loans, few have any knowledge of the private side of the industry.
  • Charities and Non-Profits:  Charities and Non-Profits are often the beneficiaries of estates which contain private mortgage or business notes and when meeting officers of such organizations, you should always include them as a member of this primary group in you contact manager.  Such individuals will likely have little knowledge of private notes and want to convert them to cash as quickly as possible.  They will be seeking your “expert” advice.
  • Contractors, Remodelers, Builders, Etc.:  On occasion, this secondary group will be required to take back paper on a job when owner financing falls through at the last minute.  Most are not in the business of holding notes and are very interested in liquidating.  Additionally, note-holding rehabbers must sometimes raise cash to repair a residence through the sale of a note and the contractor / builder cannot get the job unless the cash is raised. Look at this areas as a  very good secondary area for referral and you should always add those contractors and builders you meet to your CRM system.
  • Eviction Services:  This is a good primary source of notes as individuals involved in the eviction process often have clients who are tired of being landlords and interested in selling their carry-back paper.  You should try to build a quality relationship with anyone you meet involves with evictions.
  • Financial Planners / Stockbrokers:  Much like accountants, this large primary group of professionals tend to know a great deal about the financial health of their clients and typically, such practitioners will want holders of sub-prime private notes to sell so they invest in higher grade paper or stocks.
  • Insurance Agents:  Insurance agents come in many sizes and flavors but there are several categories that deserve honorable mention.  Life agents will often be involved in providing term policies for the payment of a mortgage (including private mortgages) in the event of a property owners death.  Many life agents ate also involves in the sale of fixed and variable annuities and will often be looking to liquidate a client’s private mortgage note to purchase one of these products.  Additionally, agents whose companies insure buildings and apartments can be a quality source of leads on private mortgages.  View this group as a good secondary source of leads.
  • Land Developers:  This group includes those developing mobile home parks so it should be looked at as a golden primary area for networking.  Land developers work on a very high markup and will typically privately finance a note balance after a hefty cash down payment is made.  They will build large portfolios of private notes which eventually must be sold to raise cash for the next land purchase or project.  Partials, or the purchase of payment streams, are a very common method of raising such cash.  Focus heavily on building a quality relationship with members of this group.
  • Licensed Mortgage Brokers:  This is a primary source of very high-quality leads and is definitely a two way street.  As a private note buyer / broker, you can often send good leads to licensed mortgage brokers for traditional lending just as they can send leads to you for note liquidations.  It is important to note, however, getting licensed as a mortgage broker should be high on your list of ideas for expanding your Cash Flow business If you do not get licensed, you are leaving at least half of your income on the table.
  • Loan Services Agents:  Employees of loan servicing companies can be a great source of private note referrals as they are often the collectors of monthly payments on private notes and will know when a note holder is becoming disgruntled.
  • Property Management Employees:  Often property management companies work with owners of privately financed properties and will know when a note must be sold to improve a property and get it ready for sale.  This should be viewed as a secondary group in importance but one that can yield surprising results in many cases.
  •  Real Estate Appraisers / Professional Home Inspectors:  This primary group is often called upon to inspect or appraise a property which is involves in a private note transaction.  As you build a relationship with such individuals, make certain they know you are a source for note liquidation.
  • Title Company Officers / Escrow Agents:  This group of individuals can be exposed to private notes quite often and occasionally, additional cash is required in the form of a small second mortgage to close a deal.  Make certain this primary group knows of your services.