One of the biggest things I am learning right now is to change my mindset from being “just a” real estate investor (who does a deal at a time) to being a Full-time Real Estate Investing Business and Company.

What does this mean?

Well, for so many of us, we seem to be in the mindset of ”I’m a real estate investor” without keeping our focus on our entire business as a whole.  Better put;  we get our leads piddling in (because we do not have a serious marketing campaign working full time-all the time), we get a lead or two (but we act like they are deals) - we work and focus only on these “deals”, then when they either come through - or probably more like it, fall through, we go back to kicking up our marketing, get a couple of leads… and the cycle begins again.  Can anyone say feast or famine? Or more like famine, since deals need to close in order to receive money.  And even then  - we might be waiting months before we receive any money.

Now don’t go jumping off a bridge with no hope.  I don’t mean to sound like a big buzz kill.  Really I don’t!  What I am getting at it that there is a better way!   And it begins with a mind-shift.  We need to stop thinking of ourselves as “A” real estate investor and rather think like a Business.   Do you have a full blown marketing campaign?  Do you have an Aquistions team - that is, many sources feeding you leads?  Do you have private money lined up?  Are you getting paid on every deal at least 3-4 different ways?  Do we know our exit on each deal and are prepared for it?  All of these things need to be in motion and working everyday.  Just like any business!  Maybe we should think like a store front business!  Would a clothing store, a bagel shop or an accounting firm just be sitting around hoping that a customer walks in the door, and only then decide to put their merchandise out, or price it, or wait till it sells out before they order more, or not do any advertising, or make plans now for their future inventory or sales?   Heck no!  At least not the successful ones!   Hhhmm… could this be why many small businesses go out of business…because they are not run like a business? (Say that ten times fast!)

Some of the few things that are the most important aspects of running my Distressed Property Investing Business every day are:

1. Marketing, Marketing, Marketing and then More Marketing. This is one of the most important aspects of being a successful real estate investor.   There are many ways to get our information out to the public.  Buying Lists, sending direct marketing pieces to farm areas, ads in local papers, bandit signs, telling every single person you know and meet on the street that your an investor, handing out biz cards, ads on bus benches, and on and on.   Most important - get your marketing out everyday in some form or another. 

2.  AQUISTIONS TEAM.   Simply put, have many people working to bring leads into you.  Bird dogs, wholesalers, real estate agents, mortgage brokers (are there any left?).  These folks can be trained to learn what your criteria is for the homes you like to buy.  They bring you good solid deals - they get paid, you buy - everyone happy!

3.  Getting paid on every deal 3-4 times.  Huh?  Now this sounds delicious doesn’t it?  What this means is that we real estate investors need to structure every deal so that we can paid at least 2,3,4 times per deal.  This resolves the age old problem of feast or famine!  Why are you waiting for deals to close before you get paid?  Some of the best things I have learned in the last several months is that I need to wholesale every deal (even if I wholesale it to myself) and I need to get paid for construction mangement .  This already has paid us twice before we have even cashed out of the house!  Yippie!

4.  Have a business plan. This simply means - what is your investing strategy?  Do you know what it is?  Decide what it is and stick to it and become the best at it.  Stop jumping from strategy to strategy every time a new guru blows into town!  What’s my strategy?   I’m in the Distressed Property Investing Business.  I wholesale, retail and hold SFR.   My sources right now are wholesales, foreclosures, REO’s and taking house over subject to’s.

5.  Raise Private Money - This is a whole workshop in itself.  However raising private money continually is one of the most important things we need to do as investors.  Without it, I can forget about being any kind of investor.   I have a Private Money marketing campaign going on, however we can also just tell everyone we know that we are in the Distressed Property Investing Business and are always looking for money to do our deals!

6.  Everyday do it over and over again…

Photo Credit: ajagendorf25

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Tags: business structure, marketing, real estate, real estate business, real estate investing, real estate investor

Greetings from the metropolis of Cedar Crest, NM. Wow….It feels good to be back!

It has been a long six weeks for me.  You see, six weeks ago, I returned from Maui Mastermind and came down with the flu…then pneumonia.  Not only was I stuck in bed but I was also hooked up to an oxygen machine.   It was definitely a humbling experience.  But it did get me thinking…..

During my time in bed….I did not do anything.  Fading in and out of consciousness and long hours of really bad daytime TV….In my long absence….my businesses continued to run without me.  How could this be?  How could the businesses that I spent that last seven years building, run without me?  How did they not LOSE money while I spent weeks coughing, vomiting, and hallucinating?   Well….It was all intentional….it was all planned.  The plan five ago was to make my business a “level three buiness.”

You see, five years ago, I learned about a concept of a “level three business”.  I remember attending the very first Maui Mastermind, where a speaker, Curtis Oakes, said a statement that I would never forget.  “My weekdays are my weekends, and my weekends are my holidays.” Curtis had built a successful business that ran without him.  At least, that I how I understood it.  When I heard Curtis Oakes say that magical phrase….I knew what I needed to do.  I needed to figure out how to make my businesses run without me.

So what is a “level three business”?

 
Well….it is a business that runs without you.  But, not only does it run…but it grows without you. At the same time, you can

So…..

How was I going to take myself out of the the day-to-day operations without driving my business into the ground?  Well needless to say, it was very difficult and there was no magic bullet (no matter what others tell you).  And still, to be honest, there is a lot of room for improvement. But….here are three big areas that I concentrated heavily to make the transition to a level three business (there are a lot more but…give you a good idea):

1)  Technology - Automation of several of the business processes was a priority.  Identifying the processes and implementing the correct technology was key.  Technology not only allowed for consistancy but also allowed for “easier” business management overall.  A big “plus” is the right technology is easily leveraged for other areas of the business.  For example, one of my companies is a commercial property management company.  We implemented Yardi Voyager (web-based property management software) in order to not only help on the management and accounting side but also to assist on the asset management side (more on asset management below)  This was a huge financial and time investment…and loaded with mishaps….but I can look back as say it was well worth it.

2) Outsourcing - We looked at all business areas to identify what could be outsourced.   Many areas were outsourced.  For example, our human resource department (including payroll and benefits) was outsourced to a Professional Employee Leasing company (Trinet).

3) Asset Management - Implementing  Asset Management  (True North Asset Management) was probably the most helpful in transitioning to a level three business.  I never heard of Asset Management before.  But asset management is a power concept of “managing the manager.”  I deal with one person who is managing all the property management companies that manage my properties (including my property management company)  different parts of the country.

Tags: business, entities, real estate business, running your business, structures