The real estate business, like most other businesses, is great when things are going well, but can be very frustrating when plans fall apart. One of the things that many new investors fail to realize is that things will not always go according to plan. There will be ups and downs. Every step along the way is filled with potential for error. What separates the best investors is their ability to be able to solve these problems as they come. Any investor can close the easy deal, but it is the difficult ones that will put you over the top. The better you are at solving problems, the better investor you will be.
One of the reasons that the real estate business has stood the test of time is that people will always have problems. With every problem, there is an opportunity to benefit from it. The more difficult the problem, the higher the return will be. This could mean anything from helping a homeowner get out of foreclosure or finding deals for end investors. There will be very few deals that are a slam dunk from start to finish. Most deals will require you to get your hands dirty and be willing to think outside the box. In order to be a problem solver, you need to first know what the problem is.
Before you start any mailing campaign or do any other type of marketing, you need to know your target market and the problem they have. If you are mailing to distressed homeowners, you know they are late on their mortgage and either facing foreclosure or it is eminent. Once you know their problem, you can tailor your pitch to finding a solution. This may mean offering cash for a quick closing if there is equity. It could mean working with their bank and making a short sale offer. You may need to be flexible and allow them to stay in their property for a few months to finish out the school year. If you are set on doing things only one way, you will leave a lot of deals on the table. Figure out what the problem is and immediately work on solving it.
In addition to offering a solution, you need to stress just how you will alleviate their problem. Instead of focusing on what you are going to do, shift the focus on what selling would do for them. They can get rid of debt and get into a payment that is more comfortable for their budget. If you are a wholesaler trying to build your investor pool, you can justify a higher fee by explaining how you will solve problems. You can do most of the due diligence on the property, eliminating a time consuming step. Whatever they have a problem with, your first goal should be trying to solve it. If you can make it easier for a seller or end investor, you greatly increase the chances of working together.
There is a certain skill in being able to solve problems that not every investor has. Not only do you need to be able to recognize them, you also need to be able to convey that to the people around you. This is the part of the business that requires you to be a bit of a salesperson – without sounding like one. There is a delicate balance in using gentle persuasion, while still giving the recipient pros and cons. The more people you talk to, the better you will become at this, but it is an important part of the business. You need to be able to get that point out to the people around you. Once you do that, you will see your business slowly start to grow.
You also need to be able to see problems before they happen, and act quickly once they do. There is a lot that goes into closing a real estate deal. Depending on the type of transaction, there could be multiple realtors and attorneys, a buyer, mortgage broker and a seller. Each person has specific issues: mortgage approval, title, insurance and appraisal. While you can’t do everyone’s job, you may need to go the extra mile. If you are selling a property, there may be items in the house that have to be repaired or replaced. Instead of questioning why you can get someone over to the house ASAP and have them done. By dragging your feet, you potentially slow down the process for everyone else. If you know you are going to need something done, don’t put it off until you have to do it. The quicker you can solve a problem, the less of a burden it is on someone else.
There will always be opportunity in real estate if you are able to solve problems. Instead of getting frustrated or annoyed when things aren’t going your way, think of how you can find a solution to problems that people have in the business. This will differentiate you from other investors in your area and will ultimately get you more deals. Every investor has to be able to solve problems. The quicker you realize that, the better off you and your business will be.