Real estate moguls are not made overnight. For as much as you may desire to have more deals than you can handle, there is a process. Success isn’t just handed out. Remember to respect the system. There is nothing wrong with working on one deal at a time, and growing your business methodically. Grow your business properly, and your business will reward you accordingly.
Every new investor wants to close their first couple of deals yesterday, but that is not always realistic. Here are five ways on how to grow your real estate business at your own pace:
1. Keep Expenses Down: The way business is done has changed over the years. In the past, if you wanted to open a business, the first thing you did was look for office space. For today’s real estate investor, this is hardly a necessity. With the way technology has advanced, you can probably do everything you need to make an offer from your phone. There is a temptation to have everything lined up perfectly before you make an offer. This means spending money on a website, business cards, letterhead and possibly office space. Some, or all of these can be necessary over time, but until you get rolling they aren’t needed. There is nothing wrong with finding deals on your laptop from your kitchen table. Search Craigslist, Tulia and other real estate listing sites to generate leads. You don’t need to pile up the debt before you close your first deal. As you get going, you will need to spend money to grow your real estate business. However, wait until you get to that point to do so.
2. Look Locally: Instead of searching for properties within a 100 mile radius, cut that search in half. In most markets there are more than enough deals – if you are willing to find them. If you are hitting a wall and are having trouble generating leads, the problem could be with how you are searching. Instead of waiting for a deal from the MLS, you may need to change the way you search. Keep your target zone under thirty miles. You want to be able to drive to a property. Thirty miles is still a very big area. Even the deals you don’t get will help you learn the area. By knowing the ins-and-outs of a zip code, you will know which areas to focus on and which to avoid. This will save you time and money down the road. To grow at your own pace, you need to have an investing sweet spot that you can count on.
3. Start Small: It is important not to spend over your budget on your first couple of deals. There is nothing wrong with looking for properties $75,000 and under. In fact, these types of properties can offer a greater return. One entry to the real estate world that is often overlooked is by buying a two-family property. FHA guidelines allow for a minimum of 3.5 percent down payment, with rates still near historically low levels. Under this scenario, you can live in one unit while collecting rent on the other. Your mortgage payment is greatly reduced, and you will learn what is needed to be a landlord. After a few years, you can move on to another property and collect rent from two units or sell for a profit. This is just one way to start small. There are many others that will fit with what you want to do.
4. Smart Marketing: There is a temptation to blindly dump money into marketing to get your business jump-started. Marketing can be a great way to generate leads, but you need to do it wisely. For starters, you need to know just how much volume you can handle. You will be wasting money if you can’t fully work every lead you get. It is far better to work on a smaller marketing idea with the commitment to do it several times. You don’t need to break the bank to generate leads either. There are several free options that can do the trick. Consider joining local networking groups, or find a real estate investing club. Buy a bulk number of bandit signs and place them in popular local areas. Price out the cost to advertise on your favorite social network site. However you want to market, make sure that it fits your budget and you know exactly what you are getting.
5. One Deal At A Time: In time, you will be ready to take on a handful of deals. Until you get to that point, work on one deal at a time. Understand the ins-and-outs of every aspect of the transaction. Ask questions along the way until you are confident that you know what you are doing. After you complete one deal, you will be ready to take on the next one. Keeping your pipeline full is always important, but it doesn’t do you much good if you don’t know what you are doing. Until you understand the process and how to work on multiple deals, stick with one deal at a time.
The real estate business is not a sprint, it is a marathon. This is your business and you can run it any way you like. You don’t need to be an overnight success to be successful. Grow at your own pace.