How to Build an Extraordinary Real Estate Business in a Sea of Ordinary

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Take a look around. What do you see? Everywhere you look you see “ordinary”.

If you look down the road a little bit, there is a very focused buy and hold landlord who only buys 3 bedroom brick ranches in one particular zip code. He never varies from this buying formula. Then there is the rehabber that has a buying criteria so stringent that he throws away most of the “opportunities” other wholesalers and investors send his way; after all, they just don’t fit his criteria. They are too small, too big, not in the right area, they don’t have a basement, and on and on. In other words, they are not perfect.

But if you walk down the block a little further you will stumble on “extraordinary”. Extraordinary is the guy that figures out what to do with all the leads everyone else doesn’t have time for. After all, “they just aren’t right for their business”.

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Making Lemonade out of Lemons

Extraordinary has built a reputation around the neighborhood as being one savvy real estate investor. He is the “go-to guy” if you have a property other investors don’t want. He is also the guy that is quietly building a fortune off of leads other investors are throwing away because they just don’t fit neatly into their plan.

Extraordinary started out as a rehabber. That was his primary business. When he stumbled on a lead that was a good deal but it wasn’t really quite good enough for a rehab project, he ran the numbers and determined that it would make a great rental with good cash flow if he just “spruced it up a bit”. So that’s what he did. He put a couple of coats of paint on the cabinets, found some new but rather inexpensive hardware and found a counter top for the kitchen in the closeout bin. Before you knew it, he had a nice looking rental and that was the beginning of his buy and hold business.

It wasn’t too long after that someone brought him a deal that was in an area that was just too far away from where he was located. But extraordinary had learned that there are always multiple options for a property. You just have to dig deep and look for them.

Anyone Can Be a Detective

After getting some comps from a Realtor in this nearby city, he determined that this house was actually a great wholesale deal for someone in that area. So he set out to find a real estate investor to sell the deal to. Since he didn’t know anyone in that area, he paid for access to their tax assessor’s site. It was about $30 for a month, but he knew he could probably find a buyer for this property by spending some time on this site. And, that’s just what he did.

That night he pulled up the property address, and started looking at the property owners for about 3 blocks in each direction. It took him less than an hour to come up with a half dozen names of people that owned multiple properties in that area. That told him that they were “buy and hold” real estate investors. With just a little more detective work he was able to find a phone number for all but one of those people. Then next morning he simply started making calls. Before the end of the day, he had a buyer for the property.

Extraordinary had taken the unwanted lead from ordinary and made a big chunk of cash.

The Choice Is Yours

The one thing I have come to know is that it doesn’t take a whole lot more work to go from “ordinary to extraordinary” and it can have a huge impact on your bottom line. What it does take is a simple decision; you just have to decide that you won’t settle for anything less than extraordinary.

I challenge you to look at your own business and find ways to stand out in your market; to become extraordinary. What can you do differently or better than everyone else?

Photo: Joi Ito

About Author

Sharon Vornholt

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 a full time real estate investor.

28 Comments

  1. Great article. I believe the process that you laid out is the formula that will help you to better understand your business and help your business grow. This process will help to clarify the business plan as well and help you survive when tough times come, as they always do.
    Thanks!

  2. Really nice article, Sharon. As beginners, we’re taught to have a plan and criteria and not get all mushy with the strategy, but…. flexibility and nimble-ness are GREAT qualities for people who want to get jobs done. I love Tim Gunn from Project Runway’s constant mantra “Make it Work”. This was a good read. –Karen

  3. So true! Here’s one for you. A very small triplex, 2-1bedrooms, 1-2 bedroom setup was for sale for over a year. Listed with two different realtors. Wasn’t selling because the land was zoned residential single family and no one wanted to get into it although price was slightly below average for setup, all leases had been in effect at lease 15 months and total rents were very good. Some fact checking was done at the zoning and platting board and a set of grandfather rights was found in the paper file, not online, that were dated 3 years before the current owner had bought the property (20 years ago) showing usage had been in place since the late 50’s. Profit for finding this paperwork was $12k for about 10 hours of total work. It pays to question the norm.

  4. Great article Sharon,
    True real estate investing defined. Anything else is considered arm-chair investing! I think we’ve all come to find that you have to be flexible and believe that failure is not an option!

    Thanks,
    SA

  5. Great article, I always try and find a way to monetize any deal that comes across my desk. I’ve never thought of looking a few block around a subject property to find a buyer for wholesale deals…definitely something I will put into effect right away!

  6. GET OUT OF MY HEAD!!! 🙂

    This is great and I like to run my business like this. I do not at all have strict buying criteria and make most of my money buying places nobody else wants. I say I have made a lot of money off of “Stale Crap”.
    I do have fairly strict PROFIT criteria and am conservative with my numbers so I don’t waste a lot of times with the “hot” new property. Once the fanfare has died down I just put in low bids and pick up stuff that has been around a long time that nobody else wants anymore.

    I also buy stuff nobody else wants.
    Actually my little spiel when doing intros at the REI meetings is “blah blah blah boring stuff that sounds like everyone else… and I will buy crap that nobody else in this room will touch. I don’t mind busy streets, train tracks, tiny 2BR houses even sewer plants next door. I buy ANYTHING!” It is true and it gets peoples attention!

    • Sharon Vornholt

      Shaun –

      You know I can’t do that.

      I also know that you are good at putting deals together successfully that other investors have given up on. This past year I have looked at deals a little differently myself. For ones that I thought there was just no way to put together a profitable deal, I decided to take one more look each time and think outside the box. I ask myself, “Isn’t there some way I can make money on this property – even if it isn’t obvious”?

      As always, thanks for making me think!

      Sharon

      • Sometimes it is NOT easy to see where the potential in a deal can be.

        Nobody really saw the potential in the place I bought across the street from the sewer plant. That was great since I got it so cheap I made a killer profit on it! 🙂
        Now like your examples you need to be flexible with a deal like that. If my only thought was to wholesale I would have been in trouble since nobody wanted to buy it as an investment there would be an issue. Since I was willing and able to do a rehab myself on it (I did ask a few people about wholesale first though) I was able to do well since I was ready for a not so easy retail sale (Sold a bit easier than I guessed!).

        The last local rental I bought was a place I had made an offer on as a flip. Got my offer accepted and when looking at it a little closer the flip seemed pretty thin. Wholesale wasn’t much of an option either since it was in a city I’d say 80%+ of the rehabbers I know that work the area stay out of. However I had a few other rentals similar in the area and saw that if I cut the budget to do an apartment rehab that I was looking at an easy “2%” property (1% is usually pretty good in most of MA). I was right and it is actually just about 2.2% and even using a 50% rule I cash flow over $500/month. In reality I actually bank over $800 most months. Again pretty much nobody had any interest in the place for one reason or another.

        I suppose being very focused makes it simpler and easier to systematize things but man if you get a good lead lock it up and sell it! There are guys like me that will be more open to working with the potential of a deal regardless of how you need to realize it!

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