There are a lot of moving pieces to keep in mind when starting a note buying business. One of the most important aspects of the note business is developing a team.
When investing in notes, it can be helpful to have a team since you cannot be successful all by yourself. The five essential resources you will need when investing in mortgage notes are people, knowledge, time, experience, and money.
People Power
Building relationships with people who have the services which comprise of these essential resources that you do not have is important. You will need help with managing and servicing your assets.
Make alliances with people who have experience and expertise which you do not have.
If good credit is needed to do a deal and you do not have good credit, it would be wise to build a relationship with someone who does.
It is ideal to have relationships with real estate agents, title companies, loan servicing companies, appraisers, inspectors, and locksmiths, and attorneys that are licensed in the states where you do business.
Enhancing Knowledge
One way to approach this is to joint venture with people who have more expertise about a certain aspect of the note business than you do.
For example, if you specialize in performing notes and you find a deal that is a nonperforming note, you could joint venture with someone who is an expert in nonperforming notes. You can also leverage knowledge of a mentor who can help you structure deals to establish positive cash flow.
Tackling Time
There are only 24 hours in a day. We all have a limited amount of time to accomplish all the goals we have. Connect with others who have the available time to help you grow your business and generate profits.
One way to save time is form relationships with note brokers who can bring deals to you instead of you chasing deals. This creates a win-win situation for you and the brokers.
Leveraging Experience
Using the experience of other service providers, you will be able to manage your business more effectively. You will also need legal and tax advice and need the ability to acquire deals, i.e., deal acquisition.
Therefore, utilizing a CPA and a tax attorney will be helpful. If you are unable to do so, you can also hire someone to take care of the accounting records as well as an asset manager
Money Mastery
Capital partners will allow you to invest using other peoples’ money. This will allow you to borrow money using a mortgage note as the collateral to fund a deal. Say you do not have quite enough money you can use other people’s money instead.
To expand your business, you must use other peoples’ money. Using your own money will limit you. Even multimillionaires will run out of money to use eventually. Eventually, you will have all your capital deployed in other investments.
Develop your skillset to build a network of potential capital partners. Capital partners can be friends, family, associates, etc.
You should not put too much value into the monetary aspect of the note buying business and devalue the other resources. Each are equally value components of a successful business.
Network Building
One of the best ways to meet people for your team is through networking. When others ask you about your business, one method would be to use some case studies which can be presented as a printout or via your website.
You can also attend meetings or join real estate investment groups. You can then ask other investors for referrals and contact information for certain vendors that you can use for your business. Do not forget to bring business cards to distribute. Follow up with your new contact within a couple days to touch base.
Go on social media platforms such as LinkedIn, Twitter, and Facebook to find other investors, hedge fund or bank managers. Make a phone call to asset managers, mortgage bankers, and note servicing companies – they can all assist you in locating and funding potential deals.
Once you have established a new network, keep in contact with them periodically, preferably at least once a month. Maintain a list of your contacts in a customer relationship management (CRM) database.
Email newsletters, text messages, phone messages, or even webinars are great ways to stay in touch. Establishing a regular contact schedule is important to keep your business at the top of mind of your contacts.
Now, you see the power in leverage these essential elements to supercharge your note buying business.
