Note investing is not only fun and financially rewarding; it’s also a niche business that once you are good at it will pave your path to success. Yet, one of the most difficult aspects of getting to note investing veteran status is finding good note deals. Many marketing methods that are utilized for “traditional” real estate investing can be effective for finding and selling notes, yet there is one method that can stand above all others and it does not cost you anything other than time.
Reverse Ad Marketing for Finding and Selling Notes
Here are a few ways to effectively reverse ad market your way to note investing options.
Start with Craigslist and newspaper ads that mention key words such as “Owner will Carry”, “Financing Available”, “Lease Option Available”, “Low Down-payment”. Quite often these ads are listed by investors who have experience selling their real estate on terms and have an inventory of notes they are holding onto for cash. If they are an active real estate investor they are balance sheet asset rich but cash poor. A solid note holder will want to grow their portfolio and would be willing to offer some or all of their notes to you at a discount in exchange for a cash close today. This gives you a great buying opportunity and gives them the cash they need to make their next purchase in real estate. It doesn’t take a lot of investors like this to create a pipeline of notes for you and a wholesale opportunity for them. In fact, if you find an active investor who likes to sell their properties on terms, the two of you can start working together on deals before the property is sold. Developing an exit strategy that benefits your note business and their real estate business is powerful.
In your initial hunt, avoid things like “No Credit, Bad Credit”. In my experience these ads are backed by more desperate real estate investors who will accept anyone with a pulse and a down payment. Buying a bad note can be the beginning and end of your note career pretty quickly.
Sure we love to think of Craigslist and our local newspaper as a great source of real estate ads, but why stop there. Small local circulars at your supermarket are a great source of leads that generally do not have the same visibility as a Craigslist ad might. In addition, publications related to Mobile Homes, Farm Land, Businesses and Legal news are excellent sources for ads with those keywords. I once found a real estate note by calling on a Pizza franchise note ad. The seller was looking to sell his Pizza business on contract and had developed his note pricing based off the real estate notes he had originated in the past with his real estate investments.
When you think beyond conventional marketing and normal marketing sources you can tap into a market of available notes that can fast-track your note investing career.
Photo Courtesy: The Pizza Review