The nature of the real estate industry is one in which highs and lows are both a common occurrence. Accordingly, harsh realty sets in quickly, even after a successful transaction. The emotional high that you experience from closing a deal will be short lived unless you have a new deal to replace it. If you want to enjoy sustained success in this business, you need to constantly focus on building your pipeline. Even when things are going well and you find yourself with a few deals moving towards closing, you need to do as much work as you can to replace them.
Finding deals to place in your personal investing cycle requires time and dedication. For every one deal you close, you should be working on anywhere from five to ten subsequent transactions. Additional deals should be a direct result of your networking contacts, marketing efforts, mailings and referrals. Each and every lead you obtain from these methods should be pursued, as they have the potential to turn into a deal. Most deals are a result of dedication and continuous followup. Deals will not just fall into your lap. You have to actually work to get them.
Many investors do not understand what working deals really entails. If you think that all you have to do is run the numbers, submit an offer and wait for them to accept; you are sorely mistaken. Working deals requires talking to homeowners who may have closed the door on your face or hung up on you the first time you spoke. It also means following up weeks after your initial conversation and seeing if they had a change of heart. Working deals is sending updated offers to a lender with new comps and revised work estimates. More importantly, you can’t take no for an answer.
These are the moves you must make to get that extra deal every few months. It can have a huge impact on your bottom line at the end of the year. If you do not have these deals in your pipeline, you will only enjoy scattered success throughout the year. You should allocate a portion of any dollar you make, towards replenishing leads. This is the lifeline of your business and without a significant base to get deals from, you will end up quickly out of the business.
By improving your marketing and networking yourself to people in your area, you can potentially add deals to your pipeline. Doing marketing alone is not enough. You need to have a focused vision on getting real leads and real deals. This takes a time commitment, understanding that you have to be able to give your undivided attention to anyone that calls you from your marketing. It does you no good to market if you are not going to listen to the lead and work it to the best of your ability.
Networking yourself is the best way to get deals since they are usually more reliable and much less expensive. To do that, you need to go to investment club meetings and local networking groups. You need to do something every day to get new leads and build relationships. If you don’t, you will see a drop off in new leads and soon enough your business will start to suffer. How well you build your pipeline will have a direct impact on your success.