Lots of “investors” fail. It’s really no different than any other business, which has a much higher failure rate than success rate.
What if you could just ask investors that have gone before you, started, struggled, are still struggling, and have closed some deals… what if you could just ask them, “what’s the most important thing to being successful?”
Well, that’s what I did. And I hope their answers help you be one of the success stories.
It may sound obvious, but the first key to succeeding is to know what you’re doing. Now, before you roll your eyes at the obviousness of that statement, consider the difference between attending a one-off conference, or watching a few videos, and doing a really deep dive into learning from investors that have been successful for years, and created a thriving business.
It’s not enough to watch some motivational videos, or attend one conference. It’s also not enough to read a few blog posts and assume that whatever worked for the guy who wrote it (probably the same guy who’s selling you a course or something) will work for you. If there’s one thing we’ve learned in the world of marketing, it’s that even when you’re in the same industry, not every tactic works for every client.
So the first piece of advice is to do a deep dive into learning everything you can before you get started: your flipping and rehab costs; profit margins and percentages; what companies you could partner with to be more successful; how to talk to clients and communicate your value to them, etc.
Eden, part of the team over at As Is Homes DFW agrees: “knowledge is power!”. And when asked what the most important thing is to being successful, Jacob, the founder of In Home Buyers concurred that the most important factor to success was “persistence and education.”
Of course, there comes a point at which you must take action (after all, if all you do is read books and study, you’ll never get started), but make sure that you don’t go in without understanding the fundamentals. In fact, in another question, we asked Pros what were the biggest factors that led to an unprofitable flip, and one of the consistent refrains was that investors didn’t know their construction costs, or the value of the home, and got one of those two numbers wrong.
We deal with a lot of investors on a regular basis, and you’ll often hear language thrown around about how they “really care about the homeowner” or about “helping you in your situation”, and we really hope that’s true. But we’re also aware that it could be part of the sales pitch some investors are learning to craft from gurus out there.
But there’s no mistaking real care for people, as a driving force to being successful. People can tell if you’re fake. And if people, and helping them out of their situation isn’t your driving force, your perseverance may wane. Listen to this piece of advice from Andrew, the founder of Columbia Cash Home Buyers – “Patience and a true desire to help people. Yes, we are dealing with an asset and real property, but people are what make us successful. I believe the more people we can positively impact the more opportunities we will have for success.”
And he’s not the only one. Steve Rosales, an investor who runs SOC Industries also cited that “helping people in bad situations” was the most important factor to being successful.
“First, take the time to listen and understand the sellers situation so you can find out how you maybe able to help them. Second, is educating and providing sellers with options is the best way to conduct your business. Third, be honest and open in your communications. I learned that by being open and honest in presenting my offers is just as important as the amount of the offer. It demonstrates to the seller that you are providing a solution to their need to sell their house quickly. Following these simple principals will help the seller to make an informed decision to sell to you or not.” – Christian, owner of Core Real Estate Properties.
So if you take away nothing else from this article, take away these two things: learn all you can to reduce the risk of being unprofitable or botching a flip (shadow another Pro, read, watch, listen) and then get started, and focus on truly caring for people. When you talk to them, listen to their story. It may have zero impact on your bottom line, and it may not impact the price or value of the home, but it will go a long way in establishing yourself and your company as one that people refer friends to, that truly cares about homeowners.
OK, so we alluded to this one already, but it’s crucial to get your numbers right. Overpaying for a property, and undervaluing the construction and rehab costs are going to the biggest things that kill your profit. Now, to be sure, you’re going to get some things wrong, especially in the beginning. Everybody fails and there’s a learning curve you really can’t avoid. But you can do the best you can to hone in your prices early on.
This tip comes from a number of established investors who are running their own businesses.Tyler, the owner of Sell Me Your House Florida says “[be] consistent. Know your kpi’s. Taking action. Never stop learning,” and former NFL player, now owner of ATX Home Buyers, IK Enemkpali told us that he’d put “knowing your numbers” as the most important factor to success.
How are some ways you can lock down your numbers?
Look, there’s no two ways about it. Starting any business is a long road. So set in your mind that you’re going to persevere, and keep going when it gets difficult, or when leads dry up in your area, or when competitors make big moves in your space. “Persistent and overcome fear. Do not compete but dominate your market,” says Leonard, the founder of ANB Homebuyers.
At the end of the day, this is about doing the right things on a consistent basis. It’s not going to be easy to get leads. Sometimes mailers work, sometimes they don’t. You may try and break into digital marketing and feel overwhelmed. It’s going to be those that persist, learn from mistakes, and keep improving over time that make it in the end.
Carter Fisk has run Carter Buys Houses for over 14 years. He agrees that persistence is everything, and emphasizes the need for a long-term mindset, “Understand that you should be in this for the long run. Slow and steady increases will get you through down markets much better than trying to get as big as possible as fast as possible.”
Summarizing everything here, we recommend learning all you can and doing a deep dive into all the factors that will make you successful (your market, housing values you in your area, rehab costs, etc.); focus on really caring about the homeowners who invite you to work with them and help them; get your numbers right
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