As an investor, one of the most important characteristics you can exhibit is organization. If you aren’t organized and don’t have good systems in place, you will run yourself ragged and end up getting involved in deals you want no part of. Over time you will develop a system for evaluating and finding new properties, but when you are just starting out this process can be very overwhelming. Every new property can seem like a home run, but on closer inspection some can turn out to be a lemon. Before you look at any new properties, you need to develop a solid system for tracking and finding deals.
What do you want out of a real estate purchase? How do you intend to find deals? How are you going to evaluate every potential deal? These are just a few of the many questions you should have answers for before you think about buying. Not only will a system keep you more focused on deals you really want, but it will also save you much time and headache. If you don’t keep track of your deals, you will constantly spin your wheels and undoubtedly look at properties that are not what you want. You don’t need an elaborate application to stay organized, just a simple spreadsheet will do. Anything that will help you stay organized and focused should be implemented and used immediately.
You can find deals in many different venues, from the MLS to direct mail marketing. Too many investors will jump into the business without any real goal or plan and end up disappointed with the results. Finding deals requires a plan and a commitment for how you are going to carry out your plan. You can’t expect a windfall of business from the MLS, or any other source, if you only give it a few weeks. Before you start, you need to give yourself a definite stop and start date and be willing to stick to it. This means budgeting accordingly for at least 90-120 days and not giving up, regardless of the results.
The method of lead generation you use is only important if you can quantify the results. If you don’t know how many leads you obtained and the costs associated; how do you know if it was a success? Not only do you need to track any lead generation ideas you have, but you need to track the incoming calls or emails you get. This can be difficult if you are in the car or doing multiple tasks at once, but this is important for your business. If you are experimenting with a few different options, you can allocate your money to the areas that are producing the greatest return on your money. The only way to know what works is to track it and then follow up diligently. A lead that does not convert immediately doesn’t necessarily mean it is a bad lead. Most leads have to be worked for weeks, if not months, before they turn into a real deal.
Once you have a few deals in your pipeline, it is important to stay on top of them and know where they are at all times. Before you go to bed every night, you should review each deal and make a list of what needs to be done, and by who. In a perfect world, you will have deals at every stage, from incoming calls all the way to closing. There will be some issues associated with every step. If you are not on top of them, you will see some fallout. As important as closing deals is, your business will fail if you can’t replace them. Whatever system you feel comfortable with, from sticky notes on your laptop to a whiteboard in your office, you need to run with and master. The minute you lose control of where your deals are is when you will start to see your business suffer.
By tracking your deals you will know which need to be followed up with and when. Putting together just one deal takes constant effort and communication. If you don’t reach out to a new lead for a couple of days, you can bet they will quickly forget about you. There will be many times where you feel yourself being pulled in five different directions. You should embrace this and be glad that you are busy. Being busy is great, but it is not the ultimate goal: closing deals is. If you just focus on one deal at a time or one lead source, you won’t be nearly as successful as you want to be.
Running a successful real estate business is similar to any other type of business: you start from the ground up. Not only do you need to constantly generate new leads, but you also need to know where they come from and how to keep them. Regardless if you close two deals a year or twenty, you need to develop a system of how to find deals and work them as they come in. You are never too busy to stay organized and on top of your business. The minute you start to slack is when you will start to lose deals and impact you bottom line.