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Starting Your Real Estate Business on a Shoestring Budget

Starting your real estate business doesn’t have to require taking out a second mortgage on your home or draining your savings account to get started. Unfortunately, many would-be investors, who spend years contemplating how to grow a real estate business fast, mistakenly believe growing a real estate business is like a Silicon Valley tech startup, which requires hundreds of thousands of dollars in startup capital and a fully-developed infrastructure in order to bear fruit.

The truth is, growing a successful real estate business comes down to three valuable skills: the ability to cultivate relationships, evaluate deals, and move quickly to shepherd potential deals, quickly, from beginning to end.

It does not necessarily require hundreds of thousands of dollars of what is referred to as business infrastructure. In fact, new investors asking the inevitable question, “what’s the secret to growing my real estate business?” often find the “secret” is not only investing in your entrepreneurship education – of course – but also, getting started as quickly as possible. Build up business systems as affordably as you can, Learn from your mistakes, and tweak and improve your processes until you find a winning formula that provides consistent results. After closing a deal or two, you’ll build up the funds to improve both your portfolio and your education.

So, even if you’re on a shoe-string budget, and barely have enough to cover the cost of a couple hundred postcards, here are some strategies for starting your real estate business when the ambitions are high, but the funds are not.

Starting a Real Estate Business the Frugal Way

starting a real estate business

1. Getting a Lay of the Land

Before you put up a single bandit sign or build that tricked-out website of yours, it’s important to gain a clear understanding of all the ins and outs related to your chosen real estate market. In fact, some of the best tips to grow your real estate team and business relate not to huge innovative activities — such as marketing campaigns or reaching out to lenders — but instead to make slow, steady progress of your knowledge of a market. (Before you jump into any other area of your investor career.)

This includes studying things like:

  • Inventory: How much housing inventory is there in your market? Is there a glut of single-family homes? What about commercial? Rental units? It’s your job to know where the opportunities lie in your market.
  • Foreclosure rates: High foreclosure rates can mean real opportunities for investors, but it can also mean greater risk. Become a student of foreclosure rates in your market, and how it relates to the broader economic picture.
  • The median: What are properties selling for in your market? No matter how pretty your flip is, if the market won’t support it, you’ll have a tough time making a profit.

Note: Most of this information can be ascertained, for relatively small cost, by using a combination of Google, your local real estate investor association (REIA), and talking to notable real estate people in your market.

2. Building Your Mt. Rushmore

This is the part of starting a real estate business that many investors dread, and believe requires significant capital, and that is building the business infrastructure — the public-facing elements — that let you collect leads, build your brand and spread your message.

Fortunately, many of these elements can be done in a cost-effective way that doesn’t require significant investment. A couple of strategies include:

  • Website: Instead of that 1000-dollar custom website opt for a website/blog built on an existing WordPress template. Not only cheaper, but often better performing.
  • Email database: You don’t necessarily need an expensive tool, such as InfusionSoft. Opt for a more budget-friendly tool, such as MailChimp or Aweber, to handle your lead collection and email marketing.
  • Software: For every piece of expensive software, there is usually a free (ish) version out there somewhere. Whether it’s Google Docs as a MS Office substitute or Canva as a Photoshop alternative, chances are you can make with do with a free option until your business gets off the ground.
  • Creative services: Whether it’s getting pictures taken for your credibility packet or getting a logo designed, there are times when you’ll need an expert. But there are varying degrees of experts, with varying rates. Use sources such as Fiverr, Craigslist and Upwork to find freelance creative types to help your business look like a million bucks…on a twenty-dollar budget.
  • Borrow what you like: Not sure what your real estate website should look like? Check out investor sites in markets outside your own and use their look-and-feel as inspiration.

3. Creating Your Network

The best part about building out a real estate network — from a budget-conscious standpoint — is that much of the heavy lifting can be done for free, or at little cost. It just requires a bit of networking elbow grease, and focusing your actions in areas such as local REIA events, meetups, LinkedIn Groups, Facebook groups, investor masterminds…anywhere you might meet the attorneys, contractors, fellow investors and private money lenders that can help boost your business.

A word of caution: networking is a muscle, and like any muscle should be strengthened gradually over time. Don’t try to cram in networking events every night of the week, at first, in order to short-cut the process.

Not only will you get burnt out, but your efforts won’t be effective. Network gradually, building confidence along the way, and before you know it you’ll be networking like the pros in no time.

4. Generating Leads

When starting a real estate business on the somewhat-cheap side, you may have to look for creative ways to generate leads without breaking the bank. Here are a couple of cost-effective ways to build your funnel:

  • How-to content: Don’t have the budget for an Adwords campaign to attract motivated sellers? Create helpful content, that guides sellers through a difficult time, and is optimized for your market. This can pay off long after you’re done creating content.
  • Bandit signs: These continue to be used because they work, and they’re an affordable way to generate leads. Just try to track which locations work better than others, to avoid wasting valuable time.
  • Driving: They don’t call it “Driving for Dollars” for no reason. By cruising your neighborhood looking for distressed properties, you’ll not only find opportunities that other investors might miss, but quickly get the geographic scoop on your targeted area.

The Creativity of Limits

Instead of seeing your limited budget as an obstacle standing in your way to starting your real estate business, try to see these initial limits on your capital as an opportunity. A chance to react creatively, think outside-the-box, and come up with a solution that nobody else has thought of. Who knows: you might just come up with a set of business-building strategies more valuable than any amount of money.

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