Key Takeaways
- Real estate is one of the best ways to start a business and become your own boss.
- Succeed as your own boss by carefully evaluating your goals and planning your business accordingly.
- Learning how to network and market your business are crucial skills when becoming your own boss.
Do you ever wish you could go to work in your pajamas? Is sleeping in until 10am everyday a dream of yours? Do you desire the freedom to create your own work schedule and call your own shots? If yes, real estate investing is the vehicle that will help you achieve those goals.
The idea of “being your own boss” sounds great, right? But there is a lot of hard work involved before you can become a successful entrepreneur.
First things first, it is important to ask yourself specific questions that will help you realize whether or not life as a real estate entrepreneur is right for you. Are you a person who knows how to handle finances? Do you appreciate organization? How do you deal with challenges? Are you afraid to take risks? These types of questions can be difficult to answer; however you must answer them honestly if you want to be successful in the future.
Once you’ve determined if you’ll be able to meet the demands of entrepreneurship, dive into step 1.
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Why Real Estate?
There are countless paths you can take to become your own boss: ranging from working your way up the corporate ladder to starting a business of your won. But, however rewarding these opportunities may be none are quite as attractive when compared to the benefits of real estate investing. With all of the exit strategies and property types available, almost any entrepreneur can carve out a niche when it comes to real estate investing—and be financially successful doing so. Here are just a few of the reasons real estate is a great vehicle to succeed as your own boss:
- Beginner Friendly: Real estate is one investing strategy that almost anyone can get started in, at any time. The reason for this is because there are so many potential strategies, each with different levels of time and capital required. Most investors agree that the strategy best suited to beginners is wholesaling, but there are also ample opportunities for newcomers in house hacking, buy and hold homes, and even rehabbing.
- Tax Benefits: The various tax benefits of real estate are undeniable. If you are already a homeowner you may be aware of a few, such as interest and property tax deductions. However, for rental property owners or rehabbers there are even more benefits to be had. Real estate investors can utilize the depreciation deduction, capital gains tax, and more.
- Appreciation Potential: Perhaps one of the most attractive benefits of real estate is its potential to increase in value. More often than not, property values appreciate over time as a result of inflation and other market factors. For investors, this means your equity will increase naturally with time—and not only as a result of loan repayments. While this perk does require a long term investing strategy, the potential profits are almost certain.
- Steady Cash Flow: If you opt for rental real estate, you could find yourself on the receiving end of stable monthly cash flow. This perk is especially attractive if you are in the process of transitioning out of your 9 to 5 and into a full time real estate investing business. I must say, it can take time to achieve but once you start depositing rent checks the wait (and work) will be well worth it.
- Asset Value: There are a number of asset types that can gradually lose value (collectibles) or even fall to zero (stocks). Real estate, on the other hand, will almost always maintain its worth. The reason is that even if something happens to the property, there are ways to protect yourself. First investors can utilize homeowner’s insurance in unexpected events. Second, even in the worst case scenario land will always retain some sort of value. This type of security is found in few other investment types.
7 Steps To Launching Your Real Estate Business
Launching a business will require some hard work and preparation on your part. You will need to take a close look at yourself and develop a comprehensive business plan. Becoming a success boss will not happen overnight, but if you accomplish one task a day you will be off to a great start. Read through the following 7 day guide to becoming your own boss, and see where you are a week from today:
- Assess Yourself
- Assess Your Finances
- Write A Business Plan
- Set Up Your Work Space
- Set Up Your LLC
- Create Social Media Accounts
- Launch Your First Marketing Campaign
Assess Yourself
What comes to mind when you think of a boss? Think about each of the things you associate with leadership, success and entrepreneurship. These ideas will help provide a framework as you begin to assess your own strengths and weaknesses. I recommend writing down your skillset, almost like you are creating a resume for a new job. Ask yourself how you handle conflict, risk management, and day to day responsibilities. It is okay if the answers are not as strong as you want them to be—this is only the beginning. Once you have an idea of where you are at, you will be more equipped to look for areas to improve upon. This is crucial as you move into the more actionable steps of starting a business.
Assess Your Finances
Your personality is not the only place you will need to do some reflecting on. In order to take the leap and become your own boss, you’ll also need to assess your own financial standing. This means looking at your monthly spending habits, existing debts, credit reports, and income statements. Each one of these components will be crucial as you look into how to finance your real estate business. They will also help you narrow down which exit strategy you should start with. For now, just focus on gathering the necessary information and creating a budget for yourself. I recommend using budget apps to get started, like HelloWallet; or, if you are tech savvy create your own in Google sheets. These resources will help you down the line.
Write Up A Business Plan
Now that you know what you are working with, it’s time to get into the nitty gritty. Before you ever look into incorporating your business or finding that first opportunity, you need to create a framework for your business. A sound business plan will help as you search for a team, pitch to lenders, and even as you establish the legal framework for your business. In the real estate world, this is also the time to pick an exit strategy to focus on. The point of choosing a niche now is not to limit your future potential, but instead to give you direction as you initially start your business. Here are the three most common real estate exit strategies to kick off your research:
Set Up Your Work Space
As you get more serious about your business, it’s a good idea to designate a specific workspace. In the beginning this is likely just going to be a home office or co-working space, but a few months or even years down the road it could turn into a physical office location. Where ever you are starting out, establishing a “work zone” is going to do wonders for your focus, professionalism and even morale. So, find a place where you are most comfortable and get to work.
Set Up Your LLC
You have now reached a turning point on your journey to be your own boss. With your business place and workspace in hand, it’s time to make your dream of running a business into an actually legal entity. There are a number of ways to do this including setting up an S Corporation, C Corporation, sole proprietorship or a limited liability company (LLC). Each designation offers slightly different protections and tax structures, though the one I most frequently recommend is an LLC. An LLC is designed to protect your personal assets, should anything occur within your business. It also allows for pass-through taxation, ease of management, and more flexibility when compared to other entities. The first step to establishing an LLC is to research the requirements in your state, as the process can vary slightly. From there, you will have a concrete list of the necessary paperwork and information to create your real estate holding company.
Create Social Media Accounts
Social media is one of the best marketing tools out there. Not only does it host millions of potential clients, but it is also entirely free to set up. In the early stages of your business, you may not have much to post but that is okay. As your business grows and evolves over time a social media strategy will become more and more apparent. What is important now is to get your name out there and start building an audience. Strive for uniformity across your accounts, but be sure to tailor content to each platform. Here are a few places you can get started:
- Twitter: Twitter is great for quick, business related updates. Many real estate investors also use the platform to share and receive investing news. Look into the lists feature to make the most of this platform.
- Facebook: Create a business page on Facebook and share it across your network. Not only is this platform a great place to share company information, it will also come in handy later on as you expand into paid advertising.
- Instagram: Instagram is arguably the most popular form of social media at the moment. Make a profile to showcase your real estate portfolio and maintain relationships with clients.
- LinkedIn: Believe it or not, LinkedIn can be instrumental to building a client base for your real estate business. Set up both a personal and a business page to begin building your network online.
Launch Your First Marketing Campaign
With your business framework in place, it’s time to get out there and find your first deal. Creating your social media accounts was only the start; there are so many other ways to reach potential customers: this is where marketing comes in. I recommend selecting a few strategies to start, and evaluating and improving as you go along. The following is list of popular real estate marketing strategies to choose from:
- Business Website: What is the first thing you do when you are interested in a new business? Chances are, you go to their homepage to learn more about what they do. Create a website for your business to help others do the same.
- Direct Mail: Despite its gradual decline in other industries, direct mail campaigns still have a place in real estate. Creating postcards, yellow letters, and even handwritten notes can go a long way as you search for properties to invest in.
- Email: An email marketing campaign may sound advanced, but with platforms like Mail Chimp it is easier than ever. Research the best ways to build an email list in real estate, and get started on your first campaign.
- Bandit Signs: This refers to those posters you see at intersections with messages like “We Buy Houses!” Maybe you have never called one of these business owners, but others definitely do. Look into using bandit signs, particularly if you are wholesaling.
- Driving For Dollars: Driving for dollars refers to searching for potential investments by scouting out different neighborhoods. Bring something to take notes on and start searching for potential investments in your market.
Summary
No matter where you are in your career, if you have a dream to become your own boss just know that it absolutely can become a reality. There are countless investment strategies that can lead to financial freedom when managed correctly, particularly real estate. Not only is real estate investing beginner friendly, but it is also a high-yielding asset that can help you live the life you want. So, if you find yourself unsatisfied with where you are, or even unsure of your next steps, I recommend researching how to become your own boss. With the tips above, you can even get started today.
Have you ever wanted to be your own boss? Share what steps you are taking right now to get there in the comments below.
