The Wealth Blue Print to Running Your Real Estate Business Like a BusinessPosted on April 8, 2014 by
Do you have doubts about being a real estate investor? Are you scared to make offers because you are afraid of making a mistake that could cost you tens of thousands of dollars? Are you having a hard time finding the time to grow your real estate business? If you answered yes to any of these questions then take the time to read this news article carefully.
My name is Robyn Thompson and I have been investing in properties for over 15 years. I have bought, renovated and sold 339 houses. I started my real estate business with $500 and I had to learn how to run a business like a business not a hobby. I learned a long time ago that successful real estate investors do things differently than the amateurs. I am going to give seven habits that all 7 figure real estate investors possess:
1) All serious business owners who make over 7 figures focus on marketing WEEKLY. We take marketing as serious as a heart attack because wealthy business owner know that marketing = revenue. No marketing means No profits. All you need to do to raise your income is make an appointment with yourself and put it on your calendar for one hour a week to focus on marketing to attract desperate sellers.
One measly hour a week without interruptions is all it takes to up your income by massive amounts. During the hour, you call realtors, order “We Buy Houses for Cash” signs for your car, execute direct mail campaign to out of state owners, landlords in the middle of evictions or attorneys who have desperate clients who need to sell and put an ad in the newspaper in the real estate wanted section.
2) The second step is to execute the marketing. The signs must be put on the car, the direct mail list of out of state owners must be bought and you must write a simple one page letter telling the desperate seller that you want to buy their house. The envelopes must be stuffed, addressed and mailed. The ads for the newspaper need to be placed. You must call the top producing realtors and tell them you want to buy several properties.
3) All serious business owners know that you must quickly handle the incoming calls. Answer them LIVE! No answering machine. Approximately 60% of the desperate sellers will hang up if they do not get a live person on the phone. When you realize that any one of the hang ups could be a $25,000 check or more you will pick up the phone and not let it go to voice mail. Better yet, get someone else to answer it 24 hours a day. I use a live answering service to answer the calls and take down all the critical information about the home. They email me all the important facts within minutes and then my secretary eliminates all the bad deals and no deals.
She will eliminate all the tiny houses under 1000 square feet, as well as the rough neighborhoods with high crime. I also don’t like busy streets, train tracks or power lines directly behind the house, or functionally obsolete floor plans.
4) Get 4 rock solid sold comparables so you know exactly what the home will be worth when you get it renovated. All successful real estate investors do their homework thoroughly before they construct an offer to buy. Look at your exit before you enter. Make sure you are buying houses that 85% of the buyers want to call home. The home must appeal to the majority not the minority.
You will need 4 very similar sold properties to determine an accurate price for your new property. The sold comparables must be in close proximity, same style of house, no more than +-10% in the square footage, and the same number of bedrooms as the house you’re looking to buy.
If I can’t find 4 sold properties in the past 180 days or less then I walk away from the house. Yes that is right. Walk away! Do not gamble with your hard earned money!!!! All serious business owners know when to walk away. Never get emotional about any deal. There are millions to buy and tons of desperate sellers.
5) Compile a detailed list of repairs before you close and make sure your budget includes $7000 – $10,000 for WOW, sexy sizzle features that will make your house drop dead gorgeous. Your reputation is your most valuable asset you have in business. You always want your house to be in the top 1-2% of the houses for sale. If your home beats all the competitors hands down then it will sell in days not weeks or months.
Carrying cost can eat a business alive by eroding profits quickly. A successful real estate investor prepares a detailed scope of work that lists all brands and sku #’s of the materials you demand. This list is provided to the contractors several weeks before closing. All contractors should quickly prepare their estimates and proposals so you can make your final selections before closing. All contractors should be ready to start the renovation process the minute you close.
6) A serious business owner is always watching the construction process closely because there are three factors that will make your project a complete success or a total failure. They are time, quality, and price. Great contractors will renovate the house quickly for the fixed price that was agreed and never sacrifice quality of their workmanship. Many beginning investors cut corners and only worry about price. They end up with a construction project that takes months to finish and quality is mediocre at best. They lose thousands of dollars on carrying costs and end up with a house that won’t sell so they are stuck renting it.
Writing big checks to buy and fix and getting little rent checks in return will put you out of business quick.
7) Last but not least all serious real estate investors who make 7 figures never take their eyes off the selling machine. We know to hire the best and pay them well. You never step over the dollars to get to the dimes. I hire the top producing selling realtors to sell my homes and I pay them 4.5% for commission not 3%. Most top producing selling realtors have 5+ approved buyers that they are showing houses to at all times.
If you have a house that the majority of buyers want to live in and you made it drop dead gorgeous so it is the best house for the price, the top selling realtors will get the house sold fast. They are extremely motivated to sell it when the commission is 150% higher than all the other properties in the MLS.
In closing, I look forward to seeing you at Tampa REIA on April 10th & 12th! Until then, best wishes to a prosperous real estate investing career.