6 Things We Wish We Knew When Starting a Real Estate Investment Business
Kelly and I have been on our real estate investment journey for three years now! We have learned a ton of lessons during this time. While I wouldn’t say we have any significant regrets, there are definitely things we wish we would have known when starting our real estate investing business.
Hire a Coach ASAP
It took us nine months to join a coaching program to jumpstart our real estate business. While we learned quite a bit during those nine months, it was also time we could have leveraged much better had we started the coaching program sooner. Yes, coaches typically are not cheap. However, the right coach will significantly reduce the learning curve, accelerate your results, and prevent you from making costly mistakes. Ask me how I know this.
Currently, we are involved in multiple coaching programs impacting different parts of our business. Each coach has provided the value that far exceeds what we financially invested in the program. Need proof? In a recent conversation with one of my coaches, they told me exactly what to say to three sellers I was working with that had gone cold. Within a week I had purchase contracts signed with two of the three “cold” sellers.
Choose a company name that is brand-able
When Kelly and I created our first real estate LLC we spent a few days trying to come up with the perfect company name that “meant” something to us…rookies. New Roots Investments, LLC is what we decided. We thought “New Roots” could mean different things to different people: Kelly and I are creating “new roots” in our community every time we buy a house; Our sellers creating “new roots” somewhere else after they sell, and many other lame ways you can spin “new roots.” Also, “NEW” is an acronym for Northeast Wisconsin, where we invest and reside. While the name was well-intentioned, the biggest mistake was using the work “Investments” as it really confuses sellers when talking to them.
Sure there are plenty of companies that have names that do not explicitly say what they do like Nike, Apple, Amazon, etc. However, these companies have spent billions of dollars on marketing over the decades to develop the brand recognition they have today.
After realizing the error of our ways we created a trading name for New Roots Investments, LLC that is much easier for our target market, home sellers and landlords, to understand what we do. This is how “Sell My House In Wisconsin” was born.
Create a marketing strategy that fits your personality, skillset, and schedule
We spent too much time and money in our first year of real estate utilizing marketing channels that were not a fit for our personalities, skill set and lifestyle.
The best example I will share is sending direct mail to property owners. This marketing strategy we absolutely despise now. Countless hours were wasted stuffing multi-colored envelopes and writing out addresses trying to be “personable” so that we would stand out from the dozens of other letters the property owners received. Don’t even get us started on the cost of stamps and supplies. We even outsourced these dreadful tasks for one of our lists of property owners, which was extremely pricey. While we received calls here and there, we never closed one real estate deal off of direct mail.
We have had far more luck with “active” methods of marketing where we talk directly to sellers. By far our best marketing strategy has been cold calling. Yes, we realize it could be annoying if you are on the receiving end of a cold call. However, it is highly effective and efficient. We get to actually talk to people to understand if they may be interested in selling their house. In one hour we can make over 100 calls to approximately 30 properties and talk to 10-15 homeowners. Very effective and efficient.
Ask for testimonials from sellers at the closing of every deal
The first two years in business we did not ask for a single testimonial from anyone we worked with. What a colossal mistake.
When you are thinking of working with a business or going to a restaurant to eat what is one of the first things you do? You check their reviews online to see what others have to say! Social proof and credibility are extremely important. When past clients have good things to say about you others will be willing to try your business.
This past year we have made an effort to ask for testimonials and reviews at each house closing. Now we can show future sellers what previous clients had to say about working with us. This builds credibility and demonstrates we are legitimate and experienced house buyers.
Create a detailed weekly schedule
Everyone has a busy life. Ours is no different. Trying to balance raising children, working day jobs, and running a real estate investing business is a challenge.
We have been able to manage the madness by creating a weekly schedule that breaks down each hour of the day. Throughout each day we review the schedule and cross off tasks that have been completed. We even put time with family on the schedule to ensure we are present during that time. The hourly schedule may seem like overkill but it has been a tremendous tool to focus efforts and create work/life balance.
Outsource work to others to leverage your time
It is challenging for two people trying to grow a business while balancing other important priorities. In our first two years in business, we completed almost every task ourselves. This meant our business did not move forward unless we were actively working at it.
Over the past year, we have found that outsourcing certain non-revenue generating tasks to others has been beneficial to leverage our time and continue moving the business forward. Thus far we have outsourced property management of our rental properties, content creation, and website organization. In each of these areas, the work completed was better than we could have done ourselves. For our business to continue to grow we must determine additional tasks to outsource. As Kelly’s dad says “Sometimes your checkbook is the best tool in your tool belt.”
So there you have it, six things we wish we knew in our first year as real estate investors. As time goes on and our business grows we are certain there will be additional lessons learned. Without a doubt, we will be able to write a similar blog post at the five, seven, and ten-year marks that may be drastically different at that time. The key is to keep learning and growing, which is important not just for businesses but for our personal lives as well.