Starting A Real Estate Business 101

Key Takeaways

  • A real estate business is an entity that deals with the buying, selling, management or investment of real estate properties.
  • Consider these 8 simplified steps when learning about how to start a real estate business.
  • The benefits to starting a real estate business are many — cash flow, asset appreciation, and tax benefits.

How long have you been dying to unchain yourself from the desk of your nine to five job? How badly do you desire to give orders rather than receive them? How important is it to you to live a life of financial freedom so that you can provide for yourself and your family?

If you said yes to any of the above questions, then I ask you this: have you ever considered how to start a real estate business?

What Is A Real Estate Business?

A real estate business is a business entity that deals with the buying, selling, management or investment of real estate properties. According to The Balance, real estate is “the property, land, buildings, air rights above the land and underground rights below the land.”

Over the last decade, middle class families have lost half of their net worths because wages are falling and inflation is rising. Another sad reality of today is the fact that less than five percent of people who reach age 65 have enough money to retire or are “financially secure enough” according the US census bureau.  If you don’t want to be apart of those bleak statistics, it might be time to consider utilizing real estate as the vehicle you ride to your financial and personal goals. In fact, the IRS recently reported that over the past 50 years, of all the Americans who declared more than one million dollars on their income tax returns, 71 percent of them were in real estate.

I will not lie to you and say that learning to start a real estate business will be easy, but I can tell you that it is worth the trial and error process. At the very least, be sure to incorporate small business systems to make the transition easier and more efficient.


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Starting a real estate business

How To Start A Real Estate Business In 8 Steps

Those wondering how to start a real estate business should be cautioned that owning a real estate company is no easy feat. Just like starting a business in any other industry, entrepreneurs should log countless hours conducting research and craft a meticulous business plan before actually jumping into business-like activities. However, those who have steeled themselves for what it takes when starting in real estate should find some guidance from the following steps:

  1. Clarify your personal goals: Before formulating ideas on how to start your own real estate business, it is important to take time to evaluate and prioritize your plans for the future, both personally and financially. Be sure that the business you are about to launch will align in such a way that will support these goals.
  2. Conduct in-depth research: Designing a business plan should be preceded by in-depth research on your industry, your specific niche and market, as well as competitors. What will help drive profit? What will be your core competencies? What will set you apart from competitors? What resources will you need to execute these plans?
  3. Craft your business strategy: Once you have conducted sufficient research, you should already have started formulating ideas in your mind on exactly what will help your business succeed in your market. Write out a business plan that also includes the resources and tools you plan to leverage.
  4. Build out a website: In today’s digital age, having a proper web presence is critical. Your marketing materials will without a doubt refer potential clients back to your website, so making sure your website is ready to go should be a top priority.
  5. Design a marketing strategy: Having a successful real estate business is synonymous with having a successful marketing strategy. What is your unique value proposition? Answering this question will help drive your marketing campaigns.
  6. Launch campaigns: Make sure to be consistent across all of your marketing channels, whether it be social media, e-mail, snail mail, or traditional marketing. Be sure to schedule out follow-ups to each of the campaigns that you deliver.
  7. Stay on top of leads: One of the worst things you can do to your business is to launch campaigns left and right, but not following up with leads consistently. Even if a lead does not lead to an opportunity at the time being, cultivating a relationship over time may lead to a deal down the line. Enlisting the help of real estate software is a great way to manage all of your marketing campaigns and lead management.
  8. Build a support network: As cliche as it sounds, no person is an island when starting a real estate investment business. On the contrary, many leads and deals in real estate will come directly from your personal network. Whether your network consists of clients, colleagues, mentors, or even competitors, make sure to invest ample time in cultivating these key relationships.

Top 5 Benefits Of Starting A Real Estate Investment Business

The benefits that come with investing in real estate are nearly endless. Not only do you have to ability to make a sizable profit on every deal, but also, real estate is proving to be a solid hedge against the stock market and inflation. Some other benefits that are guaranteed to come with starting a real estate business include but are not limited to:

  • Tax Benefits. If you gross $100,000 per year at your nine to five job and I earn $100,000 per year from my rental property, who gets to keep more after taxes? You guessed it, my rental property is taxed much lower because the government rewards rental property owners. The government also offers lower tax rates on long-term profits along with other benefits like depreciation and the exclusion of self-employment tax.
  • Cash Flow. Not only do real estate investors have the ability to receive a substantial cash flow from steady wholesale or rehab deals, they can also ensure themselves a secure monthly cash flow with rental property deals. The best part about rental property cash flow is the fact that after all of your bills are paid, the extra money is considered a passive income meaning, you get to collect a monthly pay check all the while managing the rest of your investing business.
  • Appreciation. While you are paying off the loan of whatever property you invested in, the value of that property is increasing, or appreciating.  While things like recessions and market fluctuations are bound to occur, it is safe to say that over an extended period of time, the value of real estate will increase.  That being said, any property you purchase today, will be worth far more 30 years from now; however, with a fixed-rate mortgage, you will always be paying the same dollar amount.
  • Control. Arguably the greatest benefit of starting a real estate business is the control and pride you feel due to owning something you created. Your destiny is not tied to an office on Wall Street or your company’s CEO, it only belongs to you.  Real estate investing puts you and you alone in the drivers seat of your financial future.
  • Security. Of course, investing of any kind will always be associated with some type of risk. However, steadily building a real estate portfolio over time means that you are securing your own future. Unfortunately, too many individuals today have no specific plan for how they will secure their retirement. Real estate investing is not only what some say is the fastest way to get out of debt, but is an undeniable method of creating for yourself multiple streams of income that will continue well into your retirement years, and can even be passed on to future generations.

It is not advised to jump into the real estate investing world without first properly educating yourself.  You must learn the best ways to find deals, how to market yourself, how to negotiate, and of course how to finance deals; however, once you’ve mastered those, you’ll be on your way to maintaining a successful business.  So my partners at CT Homes and I put together a comprehensive list of the most common questions for you to study before embarking on your investing journey.  Start from the top and work your way down and once you’ve thoroughly analyzed each question, you’re sure to already be ahead of your competition.

How to start your own real estate business

FAQ: How To Start In Real Estate

When you are finally ready to delve into the world of real estate investing, it is okay to feel anxious and overwhelmed.  Starting your first real estate business will be no easy task, but if you do your due diligence and study the answers to these important questions, you are guaranteed to realize success.

Do you have any additional resources you think folks learning how to start a real estate business might benefit from? Share them in the comments below:

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