Real Estate Investing Basics

Growing Your Real Estate Investing Business

Expertise: Real Estate Marketing, Mortgages & Creative Financing, Real Estate Investing Basics, Real Estate News & Commentary, Personal Development, Business Management, Real Estate Wholesaling, Landlording & Rental Properties
145 Articles Written

Growing your real estate investing business is certainly about doing the work that it takes. But it is also about being crystal clear about where you want to go. You won’t get there no matter how much work you put in, if you don’t have a clear vision of exactly what you want your business to be. What do you want your business to look like in one year? In five years?

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Once you have answered these questions, you can begin to craft a plan to get there.

Where do I start?

What is your grand vision for your business? I am a full-time wholesaler, so my vision would be a little different from that of a landlord or a rehabber.

For instance as a wholesaler, I might have a monthly income goal; a certain amount that I would like to make each month. If I were to say, “I want to make $15,000 each month”, my next question would be how can I get there? How many transactions would that be each month?

In some areas, that might be one wholesale deal a month. In other areas, it might be two or more. Let’s just say for now that it’s two. If I need to buy two houses each month, then how many leads do I need? Most folks will say that you need to talk to about 20 people in order to find one viable lead that turns into a deal.  That’s a pretty good statistic so we will just use 20 leads as the number we need. Therefore if you want to buy two wholesale deals each month, you will need about 40 leads every month.

What is the next step in the process?

The next step is to determine which marketing strategies you plan to use to get those 40 leads.

Maybe you plan to use direct mail marketing. How many pieces would you need to send out to get 40 leads?  Direct mail usually gets between a 3%-6% response rate. You might wonder why there is such a difference in those two numbers. It’s because there are a lot of variables such as the mail piece you use, the timing of your mailing, and the quality of your list to name just a few things. There are many factors that go into a successful direct mail campaign.

If you need 40 leads, assuming a 4% return on your mailing, you are probably going to need to send out around 1000 pieces. If you are planning to use direct mail as one of your lead generating strategies, then I recommend that you do send out at least 1000 pieces of mail every month. You get a higher response rate from direct mail over time so it’s important to be consistent.

Why not mix it up?

Rather than just using one marketing strategy, why not have a direct mail campaign, put out some bandit signs, and set up a website to collect leads? Try several different strategies to get your phone ringing. Find out what works best in your area and implement those strategies.

Never under-estimate the power of networking. Make it your goal to meet and get to know people in your industry. You should also attend functions that are not directly related to real estate. You never know where your leads will come from. No matter which strategies you decide to use, don’t put all your eggs in one basket.

The 3 step plan

  • Develop a crystal clear vision that becomes a roadmap for growing your business.
  • Decide on 3 -4 marketing strategies that you will use and master these before adding others.
  • Know how many leads you will need each month to meet your goals, and then create a plan to get these leads and stick to it.

Success comes to those who not only have a plan, but diligently work the plan.

Sharon has been investing in real estate since 1998. She owned and operated a successful home inspection company for 17 years. In January of 2008 she took the leap of closing her business to become...
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    Kyle Hipp
    Replied about 8 years ago
    This is the most important factor for long term success in anything. We often get caught up in a great deal or finding that fantastic idea but without a developed plan long term success is very difficult. Efficiency is key. Devloping a plan and systems in which to operate allows many parts of a business to operate on their own allowing one the time to work on the time sensitive areas of the business that require full attention. If one can develop a strategy to survive, then there is time to develop a strategy to thrive. Great insight.
    Sharon Vornholt
    Replied about 8 years ago
    Kyle – I am big on having “a plan”. I believe that knowing how to break your grand vision down into bite sized steps, is what prevents a lot of people from succeeding. They either don’t know how to work the plan or they just fail to excute the plan they spent so much time creating. I agree with you completetly that systems are crucial. Also, I love what you said; “If one can develop a strategy to survive, then there is time to develop a strategy to thrive.” I am going to remember this.
    Michelle Minch
    Replied about 8 years ago
    Sharon: Having an actionable plan is very important. I am going to get better at contacting and interacting with current and past clients and contacts in the new year. I’m setting up a drip campaign on iContact and have signed up for for help in keeping track of my next steps and client info. Current and past clients and contacts have already hired me and/or expressed an interest in my business. Therefore I should get a higher ROI farming these clients, than from brand new clients. I will always market to new clients as well…that’s where many current and future clients will come from. As you suggested, I created a plan for myself. I have an income goal and I figured out how many projects/deals I will have to complete per month in order to meet my goal. Its an ambitious plan, but I’m already seeing signs that my plan is starting to work.
    Sharon Vornholt
    Replied about 8 years ago
    Michelle – I have always found that follow up is the key, and it is the thing that will separate you from the pack. Most people throw in the towel after a couple of attempts. I am finally closing on a very difficult deal Friday. It is one where I first started talking to the seller last April. She wasn’t motivated at all. I spoke with her after each subsequent mailing. She would call me to see if “I was more motivated to meet her price”. Finally after months of speaking to her, she accepted my price. We have had many stumbling blocks along the way, but I think we are finally at the end and will finally close on Friday. Congrats on getting your plan done. What I do is review my plan every couple of months to see if I need to make changes along the way. Keep in touch and let me know how you are doing with your goals and your plan.