Helping real estate investors get motivated seller leads is what we know best and we’ve done it for over a decade. In this article, however, we will discuss finding motivated note owners for mortgage note investors (or note investors), the focus being on search engine optimization of note investor websites.
Real estate investing and mortgage note investing are very similar. The in-house processes and the methods for sourcing leads are similar, too: note investors launch direct mail campaigns and they develop note investing websites as part of their lead generation efforts. But there are some differences as well.
We offer 4 tips to improve the ranking of note broker websites through SEO. However, before we do that, let’s start off with a general overview of note investing. This introduction is for those who consider becoming a note investor to diversify their investment portfolio but don’t know much about note brokering, so let’s get started
Mortgage notes are practically loans that have real estate as collateral. The “note” part regulates the loan term (describes the borrower, the lender, the amount borrowed, the interest rate, and how to settle the debt if the loan is not paid back). The “mortgage” part concerns the collateral (the property tied to the loan, and the payment terms).
Note holders act as a bank. The prospective homeowner repays the loan (borrowed amount + interest) to the note holder. It’s as if you’ve taken a private loan instead of a mortgage from a bank.
Investors buy real estate notes to profit in one of three ways:
Mortgage notes are generally viewed as a good portfolio diversification tool. They are backed by actual real estate (the house) that serves as collateral, and in that sense, they work very similar to tax lien investing. So, even in a worst-case scenario, note investors are usually able to collect returns. We say “usually” because it’s much more complex than that (more on this below).
In essence, real estate mortgage notes are debt instruments with physical collateral, and as such they are a safe investment. It’s investing in someone else’s debt while you hold the right to seize assets if this debt isn’t re-payed (it’s what banks do all the time).
Ok, so what makes note investing attractive, besides the fact that the loan is backed by collateral? The short answer: it involves a lot less hassle than rental investment properties do. Let’s look closer into this.
Some real estate investors are in the industry for the rental cash flow. There are many investing strategies, different types of properties, and all sorts of ways to rent them out, but the driving force behind all of that is the benefit of having a consistent income stream.
Unfortunately, to keep the cash flow coming, you also need to deal with vacancies, upkeep costs (like cleaning services, handyman work), etc. On top of property management, you have to put tenant screening procedures in place and to handle difficult tenants if you end up stuck with some.
Note investing can provide cash flow without the burden of having any responsibility about the property. No one calls the note investor if the roof leaks, because mortgage notes regulate loan terms and repayment – that’s it.
Maybe you don’t deal with the house itself, however, there are a lot of risks, too.
The learning curve associated with note investing is big, and if you want to do it right, you have to tackle all the legalese head on (it’s a legal minefield). And then you need to keep your eyes open.
Property liens can be stacked on top of each other – this is perhaps the biggest risk. There are 1st position and 2nd position liens, and the first has priority. If the house has a tax lien attached to its title, then the tax lien has priority over the rest of the liens. Or in English: the collateral is used to pay the 1st position lien and if the borrower stops paying and you have the 2nd position lien, you might not collect returns if there’s nothing left to take (the house is already sold). But other risk are present, too:
You need to do your homework to mitigate these risks. Note investing is a proper business, and it is a proper work. Let’s turn to types of notes, so that you can get a grasp of the work that it’s required.
Mortgage notes can be issued by many institutions (banks, funds, lending institutions) or a private lender (property owner). We will cover mortgage notes in terms of the returns they offer. The two main types of notes are:
Other notes include: junior loans (something like a HELOC), senior lien (basically a mortgage), seller finance notes, private lending notes, etc. Now off to the people who are actually buying and selling investor notes.
As any other investment asset, mortgage notes are bought and sold. There are motivated note owners (the note investing equivalent to motivated sellers) and note buyers. You might be after both of these groups (buyers and sellers) – it all depends on your investing strategy.
One important caveat: note brokers are more advanced investors compared to tired landlords or motivated house sellers. This is a good thing because it means that they gravitate towards hubs where other note investors do their trading – whether that’s the secondary market, through classified ads (Craigslist) or by networking with loan servicing companies and attorneys (title companies).
Online marketing for note investors works a lot like finding motivated sellers. Just type in “we buy notes fast” in the search engine, and you’ll get a lot of results.
Let’s check how you can do SEO so that your note investing website pops up in these kinds of searches.
For a long time, note investors didn’t even have websites. Some of the typical pains of note investor when it comes to building a website were along the lines: there isn’t enough content to put out, it’s time consuming, are the costs justified, etc. Luckily, mortgage note investors saw the benefit of maintaining an active online presence and now there are a lot of sites who rank for the same keywords.
And all of it starts with the website, so we’ll tackle that first.
Have your website done by a professional. These days, you can easily find affordable offers for note business websites. Here are two of the best options out there: Note Investor and Carrot.
The main benefit is that you get a ready made template that has been field tested by other note investors before you. They are designed with SEO in mind, including a dozen articles (depending on the designer) which are to help put your business on the map. Look for mobile friendly templates and check if the website has lead generation features (lead capture forms, landing pages that convert, etc).
You can make a website from scratch, too, but these templates make the process much easier.
Professional note investor templates come with free content, but that doesn’t mean that you should run them on autopilot. Having the same content as other websites within your industry actually hurts your ranking. The search engine algorithms value original content, so optimize these templates to make them yours.
The most typical way of optimizing generic content is to add long tail location based keywords (“we buy notes in X”). Yes, we did mention that note investors tend to band together and that their actual location isn’t as important (at least not to the degree it is in real estate investing). However, local optimization can make your site content unique. Editing the content to include more info about your niche (for example, non-performing discounted notes) is another way of doing it, and it will also help search engines differentiate your business from the others.
And a bunch of technical SEO tweaks, like local citations, meta tags and alt tags, done by a professional marketeer won’t hurt either.
It’s ok if you struggle to come up with content for your note investing website. At first glance, it does seem like there isn’t much to write about, especially if you haven’t done this before (you are a note investor after all). However, you can hire others to help you with this as well.
In case you want to stay a solopreneur, or simply prefer your team to tackle this, you can find the following advice useful.
Note investing is accessible to people from all walks of life. You’ll have to hone in on the audience you want to target. Is it mom and pop investors? Are they professional brokers? Is it private lenders? Real estate investors?
This is data you’ve probably put in writing in your business plan or in your marketing plan. Ask yourself: What’s on the mind of a note buyer? And then develop content accordingly.
We’ll run a short exercise in finding topics for your content marketing. Topic cluster is practically a bunch of content ideas that revolve around one central theme.
If we are to outline a note investing topic cluster for educating note buyers it would include posts like:
Why is this important? Well, if you achieve topical relevance, this improves your ranking for the keywords you’d like to appear in the top search results for, like “we buy notes fast.”
On top of this, you can also push:
By now, you probably get the point. There are many topics you can include in your cluster, and they’ll boost your SEO.
Some note investors choose not to use social media. This is a pity, since social networks (Facebook, Twitter) offer free online marketing and they are a great opportunity to increase the exposure of your business. Also, the engagement on this platform positively affects SEO and since some of your competitors might not have profiles, you can get ahead.
Are you wondering what kind of content you can push on a social media platform? Well, for starters, you can notify your followers about the blog posts that are published on your note investing website. If you need inspiration on how to make the most of your social media profile, check out our article (originally written for real estate investors) here.
Granted, trading debt instruments isn’t for everybody. If you are yet to start a note investing business, be ready for doing your due diligence on all sorts of mortgage notes that will come your way.
Those of you who already work as note investors (or simply diversify your investment portfolio with notes) have a lot of ways to increase exposure to note sellers or note buyers, with SEO being one of the must-haves. While at first, it might appear like a difficult task, if you:
you are likely to get ahead of note investor competitors who want to rank for the same keywords as you.
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