Posted over 1 year ago

Finding Your Niche in Real Estate

When I first started telling people that I was interested in real estate, they assumed that I meant selling residential homes. I know I’m not the only one who has had that experience.

Real estate is a very broad field and there are so many different ways to have a career in real estate. Naturally, the same can be said for a lot of other industries as well, which makes it important to narrow down your focus and find a niche where you can shine; where you can be productive and happy.

What Can You Offer?

I’ve been to too many real estate networking events to count. In fact, I used to run a group back in New Jersey. These groups often consist of experienced people interested in networking and building their businesses, as well as newcomers searching for a way to break into the industry.

Frequently, the newcomers will ask how they can find a mentor or someone to teach them the ropes. The usual response is that you have to find something that you can offer in return. For example, you could bring equity partners to a deal (i.e. investors with money), you could find deals for others to invest in, you could do some hands-on construction work, or you could literally pay someone to be your mentor. The point is you’re providing something of value in exchange for their time.

Another common theme from newcomers in these meetings is an uncertainty about what they want to do. They may have seen the late-night infomercials or reality shows and have dreams about flipping houses, or perhaps they heard someone tell them that they should start off wholesaling, finding deals for other investors in exchange for a fee, and so, without giving it much thought, they’ve decided that that that’s as good a way to get started as any. But these approaches rarely seem to work.

Perhaps it’s because I used to be a career counselor, but when I talk with newcomers to the industry, I like to offer them more than a quick suggestion. Instead, I’ll often engage them in a conversation. My goal is to help others find the right path for them. We’re all individuals, and what’s right for one person can be completely wrong for someone else. This is why the one size fits all approaches of telling everyone to start off by wholesaling or flipping houses doesn’t work.

I ask new investors what they enjoy and what they’re good at. Searching through your skills, talents, abilities, and interests is the best way not only to find what you can offer of value to a potential future partner, but also what area of real estate, that is what niche, you might be best suited for.

What Are You Good At?

Some people love research, data, and numbers. Some people like talking to others on the phone. Still others like to be outside in all types of weather working with their hands. It really doesn’t matter all that much what you enjoy or what you’re good at. What’s more important is how you can translate that into a marketable skill; how you can take your unique talents and interests and use them in a productive manner.

If you’re an outgoing, people person, asking you to sit in a room by yourself in front of a computer for ten hours a day probably sounds like torture. But to someone else, digging through facts, sifting between facts and opinions, dissecting the hidden potential of a deal, and piecing together the puzzle pieces of a project is exciting.

I spoke with a man once at a networking event. He told me that he was new, but had experience as a carpenter. Sounds like a natural fit for a fix-and-flip career, right? Well, that’s what everyone else told him.

But instead of jumping to the easy answer, I dug deeper. I asked if he wanted to continue “swinging hammers”. His answer was no. So, then I encouraged him to think about the transferability of the skills he’s already developed. He could certainly learn new skills, “but don’t dismiss the ones you already have”.

For example, he probably has a good idea about what things might cost. Maybe he could do some cost estimating and use that talent as a way to offer his services to someone else; joining their team, while developing new skills. Or perhaps he knows how long projects should take, has a network of subcontractors, and knows how to manage people. If so, he might make a good project manager.

Finding My Own Niche

When I first developed an interest in real estate, my assumption like a lot of people was that I would get into rehabbing single-family homes, that is doing fix-and-flips. But I knew that coming from a non-real estate background that I was at a disadvantage. I knew that I would be a prime target and likely to be taken advantage of with regards to construction costs and timelines. So, I started looking at other niches where I was better advantaged.

When I discovered mortgage note investing, I saw it as an opportunity to solve problems (which I enjoy) and to help people going through difficult times (another interest of mine). Mortgage note investing involves working with mortgage loan borrowers who have defaulted on their payments to come up with ways to address their default. This can involve a forbearance, extending the length of the loan and lowering the monthly payments, offering a discount to pay off the entire balance at once, etc. Each case is unique and involves working with individuals to figure out the best solution in a given situation. For a former counselor and a problem solver, it seemed like a suitable match.

Today, I’m still refining my niche. Although I enjoyed note investing, it was capital intensive and risky. I know that going forward I want to somehow be involved in socially impactful real estate. I still don’t know exactly what that means, but I’m getting closer. It’s like working your way through a funnel. I’ve made progress and narrowed things down quite a bit, but there’s still further to go.

I might be interested in development, managing a fund, property management, or something I have yet to discover. I might want to work for a real estate company with a philanthropic division or a nonprofit organization with a real estate division. In time, I’ll find my place.

If you’re still searching for yours… be patient. You’re worth the wait.