I think a key to success in the notes business is finding “off the grid” sources of notes. Going to FCI Exchange or one other very common sources is typically going to result in overpaying or getting some very troubled assets. A while back a very experienced note investor who has done 300+ notes told me that all you really only need 2 or 3 good sources and then you are set. So I’ve been busy finding those sources, and while a still have a long ways to go the efforts are beginning to bear some fruit.
Developing these sources is a long term endeavor. You aren’t going to just send a couple of emails or make a call and then check it off your to-do list. This is something that happens over months and then years. Think of it more like a huge treasure hunt or a quest. The good news is it is also a lot of fun and I’ve had some really interesting conversations with bankers, people at hedge funds, and other individuals who happen to have very large note portfolios.
A couple of keys to success in finding new sources of notes:
- Send emails on a regular basis – Let asset managers know what you are up to, and when you have funds to invest. Most sales are made after the 5th contact. So even if you email someone several times over a few months and you don’t hear from them, you still may be making great progress.
- Get on the phone – This is a very relationship based business and people like to deal with actual humans. Don’t try to just do everything through email. Get on the phone.
- Use LinkedIn – Connecting with people on LinkedIn is super easy and its something you can do while watching TV. Again, your LinkedIn network is going to be built overnight. But with some persistent effort you can reach a lot of people.
Remember, finding good sources of notes is a marathon, not a sprint. If you are persistent and hang in there you can get some terrific results.