If you are a note broker, an important skill you must excel at is to know how you can find cash flow notes. Although it can be difficult, you can still do it by having a good insight regarding the cash flow notes.
Here's what you need to know:
Seller financing takes up about 6% of residential real estate sales, and it actually makes most out of the cash flow note business. But the cash flow actually depends on your location and the situation of the economy. Cash flow is usually higher when the economy is tough and with properties that are difficult to finance like commercials, mobile homes, etc. And although the 6% seems to be a small percentage, it actually can add up to give you quite a big amount.
The Statistics of Cash Flow Note
If you look at the residential sales of just one year - 2009, there was about 5.160 million homes sales unit with a price of about $173,000. So, if you calculate the seller finance average according to 6% of the total amount, it will be almost 53.6 billion dollars cash flow notes that were created in just a year. The amount keeps growing if you combine the notes that are created with lands, business notes, or mobile homes.
So the question here is, how do you really find cash flow notes? Well, the answer is quite simple -
Target marketing means you market to those people who are actually interested in your products and services, rather than marketing to the entire group of audience that you can actually market to. So here's the thing, instead of wasting your time and money on marketing your note buying services to everyone, why not market it to the sellers who are actually keen on the services you provide.
Moreover, target marketing acts a magnet for you in finding the cash flow notes, because when you have a great marketing plan that aims at targeting the sellers' needs who have cash flow notes, you definitely will have a lot of deals flowing in.
Some Ways to Find Cash Flow Notes
The five simple ways that will help you to locate a great cash flow deal are as follows:
1. Direct Mail
In this method, you send postcards, emails, and letters to a list of note holders that are verified.
Ads are used to find people who receive payments on real estate notes so they can contact you.
When you build your presence online as an investor, you will see that you attract a lot of sellers towards you.
Growing your network with other professionals in the field will help you in getting referrals.
5. Brand building
Build your name in the industry as an established brand and an expert in investing t get the best deals from the sellers.
Using these methods to earn a great cash flow deal works wonders for the investors, and so it will work for you.
And the best way to find these cash flow notes relies on three things:
Budget - The amount of money that you will be able to spend in your marketing as direct mail is quite a bit expensive.
Time - The time that you can spend on your business actually matters a lot when you use referrals or reverse ad marketing as they are time-consuming, but are cost-effective.
Skills - Your skills are a vital part of your business because it is you who will be managing the business. Normally, the basic skill set would include good knowledge of computers, contacts with real estate professionals, etc.
You can start with the five methods mentioned above and work according to your skills, time, and budget and figure out a marketing strategy that best suits you.