Investor, are you a Farmer or a Hunter?

These terms mean a lot of things, but on the world of real estate a farmer or a hunter is basically the way you generate leads and how those leads affect your business, but in this scenario we are applying it to the way you as an investor are currently working to get your paycheck, if you’re running around chasing the money or if you are farming it on your backyard and wait for it to come back to you in the near future?

Now, just to be clear, there’s nothing wrong with being either of these, in fact, a lot of successful investors do a bit of both, and depending on the way they are building their business it will change the way they invest and how they get their return, but you should keep in mind that for you to be successful in a business that moves so quickly you will eventually be either of them, and you will learn plenty from both! But, let’s get down to the basics!

What exactly is a hunter?

It’s someone who with strategy has trapped, tracked or pursued animals for their consumption, but with the topic at hand, it’s actually pretty much the same, but instead of animals is all about Real Estate, so a hunter can be anyone who has different strategies to obtain deals, to obtain contracts, sales or closings, so that can be from a wholesaler to a contractor! When you are hunting on Real Estate, there’s more work, more time and more energy put into your strategies, and they require for you to be out there doing it so, because you could get a fixer-upper to flip, so that means you have to work really hard to get it ready and then really hard to get it sold back out, so there’s a lot of effort put into this type of business, and while it’s a good business model, it’s also very reliant on just the deals working out, instead of having any passive investment in the back.

It doesn’t offer a sense of stability for your business, and it changes a ton from week to week and from month to month, but does expand a lot, so there’s a lot of time when you have to be involved with plenty of different people, which will in the future be the ones who refer you to new deals, it’s a fast-paced way of living your business and it does give you many opportunities to grow with people who are in the same mindset and will most likely want to be a part of the next deal, and then the next and so on.

This type of work allows the hunter to be very good with networking and a fantastic negotiator, because to get that good deal you will have to be sure of what you want and what works for you the best, so that way you will be more successful on the business.

What exactly is a farmer?

A farmer, in general, is someone who plants a seed and waits for that seed to grow into something you can harvest, so this basic concept applied to Real Estate can actually be really interesting, since it goes for a more passive and client-focused idea of business, it’s like putting your effort in individual plans, such as bigger deals like syndications, or even smaller ones, like a multifamily deal and put it up for rent, and wait until they show results. This idea brings in a lot of passive investment, it’s not completely and fully reliant on one deal, it works with multiple at the same time so you always have a backup income, and you can dedicate your time to other things, such as nurturing your clients and making sure they are always thinking of you and you can build a very important connection and relationship with them is definitely the best idea.

This type of business offers you the idea of a very easy wealth, and sometimes it does work that way, but it does require a bit of work for you to have fully functional deals up and running and generating a good cash flow and a positive income, so just like the farmer, the work is not done after you planted the seed, that’s actually the easier part! You have to build up a bunch of things before, you have to prepare your ground, so making sure you have the lender in check and the loan approved in case you’re using that to buy a property, making sure you have the right connections and the experience to know exactly which deal works best for you.

It’s different from what everyone is used to, since most people work as hunters, but the idea of nurturing and passively receiving your profit is actually a extremely smart move a lot of investors are used to, and will go with most times, because it allows you to take a breath and not being up and at it all the time, but it doesn’t mean you have to just wait around for things to fall onto your lap, because that’s not the way life works!

Be both!

When it comes to a successful and fulfilling real estate business you don’t have to stick to only one thing, and the reason for that being that from being a hunter and being a farmer you can have redeeming aptitudes and not only that, you can also have some strategies that will guarantee for you to keep working at your own pace and still being successful, so most times a lot of real estate investors will go with bigger cash flowing projects, like a multifamily deal such as a little duplex, or a big one like a syndication, which all give in a return of investment while holding and renting it, and still have deals they just fix and flip back into the market.

There’s nothing wrong with mixing and matching, but should you dedicate more time to becoming a farmer within the next year? Yes! While the market is up and running, the only ones who will be able to cash in the money no matter what happens is those who work with a back up plan such as having a rental in your plate, and if you keep all of your eggs in one basket, like getting a big multifamily deal in one place you risk less, as vacancy is low!

So, as of now, what exactly are you? A hunter, a farmer, or a combination of the two?! Let us know in the comments below!