It seems that more and more people are leaving their day jobs to go into real estate investing fulltime. I had a good friend call me up today to set up a lunch meeting to discuss this very thing. Having done the same thing myself in 2005, I can appreciate the apprehension and anxiety associated with leaving the security of a 9 to 5 to chase the greener pastures of real estate investing.
Back then, I did my best to develop a business plan, but didn’t really know what to expect until I just dove in head first. Looking back over the last 8 years, I’ve learned a lot about what it takes to be successful (and unsuccessful) in this business. I’ve tried a lot of different approaches and have interacted with a number of other investors who have done the same.
Having gleaned some amount of perspective over this period of time, I believe there are 3 key pillars of focus that enable a real estate investor to be successful.
The Three Pilars of Success in Real Estate Investing
1.) Develop a Niche –
One of the great things about real estate investing is the fact that there are a number of different strategies and angles from which to approach this business. I believe that one of the reasons certain investors do really well is because of their ability to hone in on a specific strategy, market area, property type, etc. and become the go-to person for that particular niche. The more you focus on one specific thing, the better and more knowledgeable you become at it. In addition, you can develop a reputation over time for being the expert or top provider for that particular niche which can create a network of potential vendors, buyers, customers, etc.
2.) Marketing –
Regardless of what aspect of real estate investing you choose to focus on, you will always need to be an expert marketer. Too many investors have the “build it and they will come” mentality when it comes to real estate. Any successful real estate investor will tell you that marketing is absolutely one of the most important components of this business. Whether it be online marketing, email newsletters, social media, direct mail, radio, print, signs, etc., putting together the right marketing program and allocating the necessary amount of resources towards this is absolutely crucial to the success of any real estate investing business.
3.) Systems -
Once you’ve figured out your approach to real estate as well as a marketing strategy, it’s important to have systems in place to handle the business that is generated as a result of these efforts. As I mentioned, I’ve been at this fulltime for 7 years and this is going to be the first year that I’ve bought and sold over 100 houses in a single year.I believe our business has been able to scale up because of our implementation of systems. There is no way that we could be doing this volume without very clear roles, programs, databases, etc. executed throughout the office and team.
Finding Success in Real Estate Isn’t Easy
For any new investor looking to create a business in real estate investing, I think these 3 pillars are an excellent place to start. Yes, it will take some amount of experience and education to fine tune your ability to effectively implement a game plan around these 3 areas, but I believe they should always be a primary focus. And know that you will probably always be on a path of improvement in these areas as you gain experience and as your business grows.