It seems like everywhere I go, my reputation precedes me. Whether I’m at out to dinner with friends or giving a talk at a local club, people inevitably come up to me to ask about whether starting your own real estate investment company is as easy as I make it look. You see, I’ve been around the block a time—or fifty—and I’ve built a pretty reputable business in the industry.
What they don’t know is how many hard knocks it took to get where I am today. If only I had known the most important puzzle pieces to put in place before diving into real estate investing full-time.
So, my answer to the many inquiries is that, yes, starting your own real estate investment company is within reach of pretty much anyone who has an entrepreneurial spirit and a whole lot of elbow grease. But, to be successful, there are some critical pieces you’ll need to make it all happen.
Starting Your Own Successful Real Estate Investment Company: 4 Building Blocks
Looking back at all my trial and errors early on, there are just four elements that I wish I had put into place before anything else: training, software tools, mentorship, and a solid lead generation strategy. Sounds simple enough, but they can be harder to patch together than you might think.
Here’s the lowdown on my early missteps, so you can avoid them:
Getting the Right Training—Without Getting Scammed
There are more real estate investment ‘geniuses’ than I ever thought possible—and not many of their companies are actually successfully investing in anything other than your gullibility. They write books that boast of their huge profits but conveniently leave out the parts about how you can do it, too.
Their written word inevitably leads to the seminars, where these ‘experts’ pretend to tell you everything while they are actually only pitching additional books they authored, workbooks, DVDs and tickets to even more seminars, complete with a rubber chicken lunch and intense indigestion. Getting caught up in one of these schemes is one of the biggest mistakes in real estate investing for beginners.
Instead of getting involved with this nonsense, you need to get real estate investing training from someone who has a proven track record of success—and who is invested in your success. You need a comprehensive program that teaches you more than just theory. The training should cover all the nuts and bolts of investing, from finding leads that can provide ROI to doing accurate property valuations and even defining your exit strategy. You should walk away from the training feeling confident, not robbed.
Property Valuations Can Make or Break Your Business
One of the most important tools you’ll need when starting your own real estate investing company is a way to value the subject property. An accurate valuation will tell you what purchase price makes sense, what the rehab will cost, what the upside potential is from rental cash flow, or the profit you will make from a sale.
Without a proper valuation, everything is guesswork. Your budget can go up in smoke if you pay too much for a house or underestimate what the rehab will cost. And, that’s not a risk your real estate investment company needs to take, especially when you are just starting the business.
There is a range of valuation software you could buy that promises to make the job easy, but the trick is finding a program that is not too narrow or too broad in its application. It should work well with other software and not be packed with extra bells and whistles you will pay for, but probably never use.
I’ve tried plenty of the top property valuation tools out there and the best of the best provides several must-have features, including:
1. Localized estimates for material and labor on the rehab
2. Area comps on the after repair value (ARV) on the investment house
3. Built-in communication with my team
With a valuation tool that can handle these tasks, I never hesitate about whether my numbers are spot-on when I go look at a potential deal.
A Mentor Should Inspire, Teach, and Guide
Going it alone, especially when you are just starting out, is not a smart idea. You are bound to make a critical mistake that could jeopardize your business. But, not everyone with real estate investing experience will be able to guide you in the right direction.
Most of the ways to find a one-on-one mentor are either expensive or time-consuming. Sure, there’s lots of folks who claim to provide one-on-one mentoring—for a fee. If you do not end up paying them by the hour, surely they will want a chunk of your returns should they talk you through a deal. Spending money like that is no way to get ahead with your business. Another option is to join a real estate investment club, but you are likely to find that most of the attendees are as green as you.
You need someone experienced who’s got your back and helps you stay on track with your real estate investment business plan. The trick is where to find one.
A Steady Stream Of Leads Will Keep You Going
Leads are the lifeblood of a real estate investment business. Your future success is built by finding the right properties at just the right time. There’s an old saying that new business activity starts every day at 9 am. When you get up, suit up and show up a part of your daily calendar should be focused on finding your next investment opportunity.
There are old-school lead generation techniques like knocking on doors in a target neighborhood. However, the yield for that strenuous effort can be minimal. Plus, you don’t want to deal with surveillance cameras and yard dogs when ringing the doorbells of people that often don’t want to come to the door for yet another self-interested investor.
Advertising on radio, billboards, and online are good ways to develop leads. The downside is the expense and time involvement, which can both drain potential revenue. That is, unless, you have a way to pool resources with other regional real estate investors, like me.
Everything You Need to Begin Investing Today
When I first started my own real estate investment company, it was getting leads that led me to look for outside-the-box resources. I, admittedly, had been struggling otherwise with trying to patch together all of the elements, including training, software tools, and mentoring. But, if I couldn’t get leads, then I would never find out if the other resources were worth it or not.
My answer wasn’t too hard to find. You’ve seen the nationally trusted “We Buy Ugly Houses®” advertising—it’s everywhere. And, guess why? It brings qualified leads directly from distressed homeowners. In fact, it’s so effective that HomeVestors® franchisees have bought over 140,000 houses since 1996.
If that wasn’t eye-opening enough, when I became an independently owned and operated HomeVestors® franchisee, I received some of the most comprehensive training in the industry. No gimmicks, just plain talk and knowledge that I could actually use—and the tools to do it right, including the proprietary valuation software, ValueChekTM. And, to get me off on the right foot, I also got a seasoned Development Agent who, all these years later, remains dedicated to seeing my real estate investing business do well.
See for yourself what a HomeVestors® franchise can do to help you start your own professional real estate investment company. Request information about becoming a HomeVestors® franchisee today.
Each franchise office is independently owned and operated.