Today is a cold day, and when I say cold, I mean temperatures of -4 degrees. You know this Aussie is freezing. There are so many places I’d rather be than Toledo, Ohio — the Bahamas being #1! As I sit here freezing, I know it’s for a purpose: my family, and here the numbers just work, so my activity is focused on growing our business.
What some may not realize is that Real Estate is like a roller coaster. You get all the thrill and speed when deals are hot, but it also comes with the coasting part for when they’re not. So many young agents and investors, as business owners themselves, don’t know how to handle the times when things are lean. They experience the euphoria of cashing that commission check or getting the big deal across the table, and before they know it, the money is gone and they are right back to the start.
I say this because it has also happened to me. At one point I was up $300,000, and a few months later it was gone and I was eating peanut butter from a teaspoon. When I first started I thought that leveraging debt was the way to build an empire. I was over 1 million in debt, and due to economic situations I was barely getting by and I realized that my empire was FALSE!
Today when I work with investors, I stress safe investing and I also practice it. I also practice safe business ownership. Now, don’t get me wrong, I take risk and some of that does come with a high reward, but I also have fortified my ship. Gone are the days of eating peanut butter because I ensure that we have a safety in place for the lean times, and they do happen.
Today I share with you my top three strategies to fortify any business!
How I Bought, Rehabbed, Rented, Refinanced, and Repeated for 14 Rental Properties
This is the dream right? Going from zero to 10+ rental properties, providing stable cash flow and long-term wealth for you and your family, and building a scalable business model to boot! Learn how this investor did just that, in this exclusive story featured on BiggerPockets!
3 Strategies to Fortify Your Real Estate Business
1. Keep Costs Low and Drive Revenue
No matter how much you are making, no matter how big the deposits into your bank account get, keep the costs of operating your business low. If you rent office space, find the smallest possible office you can handle with the cheapest rent for your area, and don’t move until you literally have people taking up floor space. Keep your focus on bringing in the revenue. Get free pens from the bank if you have to. Use every aspect of social media to help your business grow, and post regularly. I made my first million from a 200 sq ft office shared by 3 other people!
2. Keep the Momentum Going
When you have it, you have it, but how do you keep it going? Focus on the little things, and don’t stop because you think you’ve made it. Keep up with your daily routine every single day. No excuses. So many of us will go out and close a few deals and be so high from that feeling of accomplishment that we stop. We think we deserve a day off or a vacation because it’s been so long.
In my experience, that day you want to take off is the most important to be in the office and meeting with clients; our energy is intoxicating, it rubs off, and people want to do business with high energy people. Don’t let it get away. That is momentum, and you must follow it because it always leads to better things. Take the vacation later when the iron is cold, but while it’s hot, KEEP THE FOCUS!
3. Don’t Spend it All!
So you’ve made some money, happy days! Don’t spend it all… always know or think that leaner times are ahead. Put some in reserve. Trust me on this one. My office rent is paid for the entire next year. So are the utilities, and even payroll is set aside to cover expenses just in case something strange happens. What I mean here is simple. You must take care of the business, yourself and the people around you that make it all happen before anything else. No lavish vacations, no new car, no new wardrobe and expensive dinners.
Don’t get me wrong here — get what you need, but please understand the difference. It took me a while to do this!
To wrap this up: Real estate is a business of ups and downs. Plan accordingly, and you’ll be able to weather any storm that comes your way. Do the right things with the right people in the right way, and you’ll be surprised at where you’ll end up — possibly on the beach in the Bahamas with me, The Real Estate Dingo!
Investors: What strategies do you use to safeguard your business against the hard times?
Leave me a comment, and let’s talk!