How to Be a Distinguished Note Owner


With all of the backlash against banks and mortgages it is no wonder more and more people are renting,  buying properties for cash, or using private seller financing.  One of the biggest reasons? Customer Service! With the internet and today’s fast paced way of doing business, old fashioned customer service has gone out the window!

Want to make a difference as a real estate investor when you offer seller financing on your properties? Give good customer service. Here are a few great things I’ve implemented, experienced and benefited from as a note investor and advocate.lines of communication

Communication Is Key: If you are willing to offer seller financing, your job is not done when the contract is signed and recorded. You or your servicing provider should add a personal touch when dealing with the people paying your mortgage notes. Of course, there is a fine line when it comes to how close you get with customers. You don’t want them to take advantage of your kindness, but I have found that talking through issues is a lot more effective than avoiding them and hoping the terms of the contract will solve any problems that might arise. Develop a client service policy and have a phone line designated for client related issues and mortgage questions. You will find clients are more likely to pay on time when they know you genuinely care.

Offer a Holiday Incentive: This is an idea to plan for in 2012! Prepare a letter for each of your mortgage payers, offering them one month free or discounted rent (your choice) if they make their first 11 contract payments to you on time. It is a great way to get timely payments and give something back to customers during the holidays when personal and family priorities can shift and money might be tight.

Offer Payoff or Payment Programs: This one can be a true win-win for both you and the prospective homeowner.  It’s one that we follow through with every six months or so. Offer a reduced payoff if the homeowner can cash you out within 90 days. Often times when mortgage balances get lower, it is affordable and feasible for homeowners to come up with the cash to pay off their mortgage. Another great program to offer is reducing the interest rate for the homeowner if they increase their monthly principle and interest payment to you. This program gives them the opportunity to own their home faster, pay less interest, and you get your principle and profit faster too.

You have many options as a note owner.  They all start with communication and customer service. I find these ideas can go a long way when it comes to getting payments in a timely fashion.  Also, perspective homeowners really appreciate the opportunity to own their own home faster when there are advantages for them as well!

Are there programs you have implemented with your contract buyers? If so, please share your story. I appreciate your feedback and comments.

Photo Courtesy: Markus Sandy

About Author

Kevin Kaczmarek is President of Capital Blueprints, LLC. Serving a national and international client base, Kevin helps clients achieve their personal goals for long-term stability and solid financial growth through Self Directed IRA Investments and individualized Passive Income Strategies.

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