A well defined crystal clear
vision, with objectives and milestones is the foremost basis of any business
venture and in Real Estate Investing it is imperative.
Whether it is to grow
your business or start-up one, you need to think things through and study all
the options available e.g. Wholesaler, Land lord or Rehabber and what you want
to focus on.
Once you have decided,
you need to set yourself targets of monthly income you would like to generate
now and say after one, two and five years of operations.
Break-up each month
into number of deals per month to achieve your revenue target. You now need to
estimate the leads you need to achieve the desired number of deals. A thumb
rule is 20 leads potentially generate one deal.
Draw up a multidimensional Marketing Strategy
Direct mailing – at best averages 4 to 5% leads. Obviously, the attractive or
effectiveness of your mailer is the first criteria. Timing, the second criteria
is just not related to the Season or holidays but also, prevailing market
sentiments. Quality the third criteria, refers to the quality of your mailing
Website - set-up a website to collect leads.
Personal Networking - with industry professionals and meeting people not
directly connected with your business, by attending seminars or functions, is a
A healthy mix of all
possible strategies applicable in your own environment will yield results. Fine
tuning to optimize time, effort and positive outcome is an ongoing process. Diligence
and consistency are a prerequisite.
A Business Plan
Your business plan is
your mapping out of your vision in a professional manner, you need to comply
with not only the standard format of presentation but also let your passion and
positive qualities show. A Biz Plan would include the following, besides any
-An Executive Summary –
normally prepared once all other aspects have been covered.
-A Market Analysis
-Your Business Practices
-A Marketing Plan
-Assumptions – etc, etc.
A business plan not
only requires hard work to prepare, it will perforce make you study all aspects
of the business before you take the plunge. It is a great Sales tool and
provides an opportunity to your investors and clients to make a favorable
impression of your organization.
Obviously, the most
important aspect of your business plan is the Executive Summary. A summary
needs to be short precise and cover all the essential points of your business
plan. A lender or prospective partner needs to feel the tinge of excitement to
be attracted to join your venture.
Real Estate Investing
involves many other aspects too:
-Long Term Revenues –
obtaining best market rents with minimal expenses
-Short Term Revenues –
by enhancing profitability of each acquisition
-Real Estate Market -
keeping a sharp eye on market conditions
-Strategies – to deploy
in depressed markets
-Lease Purchase / Rent-to-own
-Investment clubs –
which to select, if any
-Equity or Mortgage –
option to follow under changing market conditions
-Real Estate Investment
Trusts – to avoid if Land Lording is not your strong suit
-Financing and real
-Mortgages – various
types and their implications
-Undervalued Real Estate
– if you can handle the title issues and renovation at a profit
-Title issues - etc,
It is clear from above,
that besides a good accountant a legal beaver is essential to manage these