If you would like to download a printable word document of this session click here.

 

Updated 6/01/06

 

Working with Professionals

 

Here is the list of professionals that are most likely to have clients that have notes:

Accountants

CPAs

Attorneys – (Real Estate, Estate and Probate, Divorce, Bankruptcy)

Mortgage Brokers

Mortgage Loan Officers

Appraisers

Board of Realtors

Bookkeepers

 

Mobile Home Sellers

Public Accountants

Real Estate Agents & Brokers

Tax Preparers

Title Officers

Financial Planners

Loan Service Co.

Builders/Contractors

Developers

Escrow Officers

 

Making a personal visit to the offices of these professionals will get quicker results and cost less.  However, it will take time.  You decide how much time you want to spend with it.  I suggest setting a goal of how many professionals you want to contact each week.  If you are diligent and persistent you will, over a period of about a year, develop a small select group of professionals that will provide you with a steady stream of income indefinitely.

 

 

Just go to an area in town where there are business buildings and start talking to each one.  You will be talking to the receptionist a lot of the time.  Just talk to each business in the area unless it is a dentist or clinic.

 

 

DISCRIPTION FOR CALLING ON PROFESSIONALS

 

 

You will call on most of them only three times.  Each time you will be there only a couple of minutes.  For the first visit, you will need only your business card.  For the second visit, you will want to have either the first issue of your newsletter or a flyer that describes what you do. 

 

Be prepared for the fact that 95% of them will not know anything about what you are showing them.  This is because they do not have the type of relationship with their clients that will cause their clients to come to them if they need money.  This type of professional is NOT your prospect.  It will just be a numbers game.  Get by 20 to find the 1 that will be your referring professional.

 

It takes time to develop this strategy.  There are two things that you have to overcome.  First, you will find that even those professionals that tell you that they might need your help with a client, may not need your services more than once a year.  It may be several months before the next client that needs help comes into their office.

 

Second, most of the professionals that can refer clients to you need some time to feel that you are credible.  The newsletter will be a great benefit in this area.  It is very professional looking and will give you a great deal of credibility. 

 

Eventually, you will want to have a new edition of the newsletter every month for this small, select group of professionals that have indicated that they will send you referrals.

 

 

Script for Cold Calling Professionals

 

 

1st Call (Do not show your business card as you walk in.  You will look like a salesman) You are often talking to the secretary on first or second visit. 

 

“Hello.  My name is ____________.  I am an investor.  I buy real estate notes.  Does your boss work with clients that have real estate notes?   May I have one of your boss’s business cards?”  Take the card and turn it over – write the receptionist’s name on the back.

 

“I’d like to leave my business card for (your boss – use his name if you know it).  I may be able to help any of his clients that need to sell their notes.”   That’s all.  Turn around and leave.  As you get to the door turn around and say, “I’ll check back next week to see if there are any of his clients that I can help out.”

 

2nd Call (Have the first issue of your newsletter or a brochure with you this time)

 

“Hi, remember me?  I stopped by last week and left my business card for your boss.  Did he mention that he would like to talk to me about any client of his that might need to sell a note?  (If NO, continue).  Well, here is a copy of a newsletter that I publish periodically (or a brochure describing what I do).  It has more information about the kinds of notes that I invest in and how I might be able to help someone who needs to sell a note.  Will you please give it to him?” I’ll check back next week to see if there are any of his clients that I can help out. 

 

3rd Call (95% of the time this is the last time you will visit this professional)

 

“Hello, I’ve left my business card and a copy of my newsletter for your boss.  Does he have a need to talk to me about the type of notes that I buy?”

 

Ok, so 95% of the time you will get to this point and that will be the end of that professional.  But, 5% of the time you will talk with one of these professionals.  If a professional has the type of relationship where clients will ask about how to raise money, he will know what you are all about.  You are a very rare commodity.  You have a virtually unlimited source of money for purchasing privately held notes. 

 

This kind of professional will want to know more about you.  He will want to ask you a few questions to see how you can help his clients.

 

 

Questions that Professionals will ask you

Don’t just memorize the answers to these questions but try to understand what is being conveyed by them. 

 

 

1.  How long does it take you to fund a note purchase?  “It will take approximately 3 weeks from the time that I receive the documents that I need to open an escrow.”  (It will usually take about 4 or 5 weeks, but this is because it takes the client a week or two to get you all the documents that we need)

**Understand that we are talking about the time AFTER the offer is made for the 3 weeks here. 

 

2.  What is your discount rate?  “It varies depending on the quality of the note.  The quality of a note is determined by the amount of equity in the property and the credit and/or payment history of the note payor.” (If you get pressed for more information continue, but try to not be too specific at this time).  “A really good quality note will have at least 20% equity and 3 years of on time payments.  In today’s economy, a note like that may bring as much as 90% of the payoff balance of the note.”  (Actually, on a note this good you will get bids of as high as 99%, but don’t tell them that or there is no room for your commission.) 

**They think that we have just a base discount rate.  And we want them to understand that each note will be evaluated on its own merit. 

 

3. What’s in it for you?  If I buy the note, I’ll receive the monthly payments on the loan.  Hopefully, I’ll get back more than I pay for the note.

**We want to clarify that we are an investor looking for a return on our investment. 

 

4.  How big of a note can you buy?  I can fund notes up to $500,000 quickly.  If the note is bigger than that, I work with several other investors that can joint venture on notes of almost any size.

**Let them know that there may be others involved in the deal without belittling your position. 

 

5.  Are you an investor or a broker?  (Never represent yourself as a broker.  There is no such thing as a note broker.)  “I am looking for notes to buy for my own portfolio.  However, if you have a note that is bigger than I would buy, or if I am not interested in it, I work with several other investors that can fund notes of almost any size.”

**Let them know that there may be others involved in the deal without belittling your position. 

 

6.     What kind of notes can you buy?  (If this question gets asked, you have a very good prospect.  He would not ask this question unless he already knew about our industry.)  “I buy real estate notes, but I work with several other investors that can purchase almost any kind of cash flow “  (He is asking this because he has some type of note in mind – business, commercial, mobile homes, annuities, probates, auto & airplane & boat, lotteries, royalties, etc.  If you point out that your interest is in Real Estate notes, you will not have to field questions about types of cash flows about which you know nothing.)

 

 

You need to have only a couple of dozen professionals sending you notes.   If each of that small group send you only one referral a year, that’s 24 deals each year.  If your commission is only $2,000 per deal (and it will almost certainly average more than that) you will earn $48,000 from this source.

 

The best thing about this strategy is that it eventually grows by itself.  With direct mail you are constantly purchasing more lists of people to mail to.  With professionals, once you do a deal that helps one of their clients, they will refer you to other professionals.  Over time, your small select group of professionals will grow by itself. 

 

In the long run, this strategy becomes more like Public Relations than marketing, advertising, or selling.  In the initial development there is definitely a lot of contacting and selling.  But, ultimately you just attend business luncheons, Chamber of Commerce and Board of Realtors meetings, and PLAY GOLF with your Professionals :>)

 

Some people might call this work – I guess it’s a matter of perspective.

 

Check List for including Professionals in your monthly Newsletter group

 

 

As you are visiting all of these professionals, keep a mental check list for deciding which professional will be included in your small select group that will receive your newsletter on a monthly basis.  I prefer to hand deliver this newsletter to a professional until I get my first deal from him.  After that, I will mail them to him.  Of course, I will still continue to see him at various business luncheons and dinners (and, of course, playing golf).

 

Here are the tests that a professional must pass to be included in your small select group:

 

1.    You must speak to the boss.  If you’ve been by the office three times and still have not talked with the boss, forget about him.  HE IS NOT A PROSPECT or he would have called you or asked his secretary to set an appointment with you for the next time that you stop by.

2.    When you speak with the boss, he must understand that you buy notes – you do NOT make loans.  If you don’t make this perfectly clear, someday he will call you and say something like “I have a client who is building a shopping center.  Can you LOAN him $20,000,000?”  We do not MAKE loans, we BUY notes.

3.    When he understands what you do, directly ask him, “Do you have clients that have notes like this?”  If he says “No”, say “Goodbye” and you’re outta there.  There is no reason to ever go back.  He is not prospect.

4.    If he says, “Yes, I have clients like that”, then directly ask him if he will refer the next client that needs to sell a note to you.  If he says that he will, then this he has become one of that small select group that will receive your newsletter once a month.  On rare occasions, a professional may say, “I already have another investor that I refer those clients to.”  Your response is, “Well, that’s a great service that you provide for your clients.  Do you mind also referring them to me?  That way your client can get competing bids for his note and choose the offer that makes him the most money.” 

 

 

In order to help you find other resources out there for newsletters, try doing a search on www.google.com or www.mamma.com or www.goclick.com.  Search for “cash flow newsletters” or for “note newsletters” or “inexpensive newsletters” or note business brochure, professional newsletters.  These types of searches may help you find other resources out there to help you.  You can also look at http://www.totalnotesolutions.com/ for letters.