How Long Does It Take To Start A Real Estate Business?

By Than Merrill

How long does it take to startup and kick off a new real estate business?

Is starting a real estate business something that should take just a few hours, or do you need to patiently invest years of hard work? What are the critical steps in getting to where you want to be? What barriers should more real estate entrepreneurs be breaking down?

Some never take the next step towards formalizing a real estate business. They just get into the game and start doing deals. Some add a few helpers, but don’t start an actual business. Others keep going at it solo. Then there are those that have no desire to engage in hands on real estate, but want to own businesses and start at the top, and work down instead. So do you really need a company?

For the select few that just want to do their own thing, running a company can become a distraction, and add to expenses. However, this doesn’t mean the benefits and protections of LLCs and other legal entities can be overlooked.

Many are missing out, big time. They are not focusing on building a business. This is especially true for those that want scale, and who want to just see the profits from real estate and being an owner versus having a job. That’s true, no matter how much better and higher paying that new job is.

Basic Steps in Starting a Real Estate Business

Technically, ‘starting a business’ is easy. Its maintaining a successful business that can be tricky. These simple steps should help:

• Research
• Business plan
• Choose a name
• Incorporate
• Get a tax ID number
• Open a business bank account

With the exception of comprehensive market research, most of the above can’t be done in a day. Some will take months to get there. While thorough planning is wise, many let the process drag on too long, while continually rethinking and second guessing themselves. Don’t fall into that trap.

Raising Capital

Some real estate entrepreneurs will also be keen on raising funds for their startups. Some will find it unnecessary, thanks to mortgage finances and other working capital options that this industry is privy to. Others just feel they need a big war chest to strike out and get going. There is nothing wrong with that, but there are two things to watch out for. The first is realizing that more money doesn’t always help. Normally a good business model can work with or without extra capital. More money just speeds up the pace and scale. If it isn’t working, $10M is just going to be burn money, and extend the decline. The second lesson is not to spend forever in fundraising mode without getting started. It can take anywhere between 0 to 40 weeks for startups to secure seed capital, according to research by DocuSend. But that doesn’t mean you just sit there and put life and business plans on hold in the hope of getting it.

Ensuring a Profitable Business Start

How can you ensure a profitable business start? This is crucial, especially for those taking a little longer to get going. Once the clock starts ticking, you’ve got expenses. That could simply be renewing your LLC, insurance or business checking account fees. No matter how small, you want income coming in as fast as possible. In reality, while it is entirely possible to generate income in real estate within 30 days, some closings can take 90 days to happen. Even if you hit the ground hard on day one, you might not see any cash coming back in for a couple months.

Don’t wait to start lining up deals and income. Most will find that they can begin lining up revenue and deals in advance. This may depend on your exact type of business and your organization, and maybe even the season, but most should be able to set up closings to happen in their first and second month of being in operation. Kicking off with six figures in income your first month will make a world of difference.

The earlier you get started, the better. The earlier you organize yourself as a business, the more tax breaks and legal protection you’ll have. If you can act faster than the competition, you’ll have the advantage. It can take anywhere from a few hours, to a year to get a real estate business going, but that doesn’t mean you have to put off activating revenue producing activities.

How Are You Networking Yourself?

By Than Merrill 

Regardless of your current marketing and lead generation strategy, you need to do more if you want to maintain your current level of success. The best way to grow your business is by networking yourself and constantly meeting new people. Sure, you may be able to close a few deals by sending letters or mailings, but when times get tough you need to be able to rely on your network and contacts for new deals. How you cultivate existing contacts, or meet new ones, will go a long way in determining how long you will be in the business.

Fortunately, networking yourself at meetings and investment clubs provides limitless possibilities. Regardless of where you live, you can probably find a real estate investing meeting in your area. These meetings usually have a headlining speaker to learn from, but that is not the only reason you should go. There are also dozens of area investors, realtors, mortgage brokers and attorneys that typically attend. Bring lots of business cards, as you should introduce yourself and pass out a card to everyone you come in contact with. You never know when networking yourself may lead to the deal of a lifetime.

In addition to physical meetings, you can gain contacts through social media. Nothing replaces physical meetings, but connecting with someone on these sites should lead to a quick cup of coffee or lunch. People want to work with people they feel comfortable with. You gain trust by talking to people about what they think, like or want out of the business. The more you continue networking yourself, the more opportunities that will come your way.

If you are not already, you have to find time every week to market yourself and connect with others. Your business will thank you for it.

How Much Does It Cost To Launch A Real Estate Wholesaling Business?

Posted by JD Esajian

How much do you need to start a real estate wholesaling business?

Is a real estate wholesaling business really the ultimate in lean startups, or are there hidden expenses that might cost more than you think?

The Bootstrapped Real Estate Startup

Technically, individuals can get started in wholesaling houses with little to no money down, and don’t have to have a formal company. This can make wholesaling even more affordable and faster to get started in than becoming a Realtor.

Yes, you’ll need to put in some sweat equity, and you won’t want to dive in head first unless you have invested in your real estate education, but you don’t need a fancy office, commercial printers, and other burdensome overhead or startup costs. In fact, if you can start out by hitting the street to find deals, and network in person to find buyers for your deals, you can potentially start pocketing big paychecks with a virtually non-existing marketing budget.

Warren Buffett and his mentor Benjamin Graham are famous for their motto; “investment is best when it is most businesslike.” This quote certainly applies to real estate investing, and it doesn’t just apply to being analytical, and taking the emotions out of investing. Warren Buffett wouldn’t be as famous and wealthy as he is today if he hadn’t formalized his investing juggernaut Berkshire Hathaway. There are many benefits to forming an actual real estate wholesaling business versus just being a lone wolf flipping properties in your own name. They include:

• Reducing liability
• Tax breaks
• Scaling your real estate investing
• Automation
• Building additional value in a business and brand
• Ease of succession

This can all add up to very significant additional income and wealth building gains. Often from simply doing what you are already doing, just under the umbrella of a business.

So how much does is cost to start a property wholesaling business?

Real Estate Business Startup Costs

Launching a real estate wholesaling company can bring additional costs. Specifically this means startup costs. Some of these maybe static regardless of how big you will go. Others will vary depending on scale out of the gate. And others will depend on the vendors and quality of services you choose.

Some of these costs may include:

• Incorporation
• Logos and branding materials
• Business mailing address
• Accounting help
• A real estate company website
• Business phone line
• A real business plan

This doesn’t have to be dramatically expensive. The more you can do yourself, the more you’ll save. For example; writing your own business plan, filing an LLC online, logo creation, etc. It is important to recognize when to get help. You can also turn to your real estate coach to help review these items.

Real Estate Marketing

For those that do plan to go bigger, it is essential to have a real estate marketing plan. In fact, you should have one of these even if you only plan to tackle one wholesale deal at a time, or a handful of flips a year. There are a huge range of marketing options available. Most work. Some work better than others. Some are better suited for those starting out than others. Some of these options to consider may include:

• Direct mail
• Cold calling
• Driving for dollars
• Email marketing
• Social media
• Real estate blogging
• Press releases
• Online real estate classified ads
• Pay-per-click advertising
• Print magazine advertising

Real estate wholesalers can accomplish a lot with very little if they work smart, and are diligent about maximizing leads. If they aren’t careful, they’ll blow their budgets, and be let scrambling for deals to make ends meet. Key to success here is maintaining a good marketing mix, accurately forecasting closing ratios and cost per lead, as well as knowing when to seek expert help. When starting out, it is important to create a marketing budget that you can stick to for several months consistently. Don’t start and stop every time you find a deal. You have to be constantly filling the pipeline for later.

An important caveat here is to make sure marketing isn’t the only thing in your ongoing budget. Some investors have made this mistake. They’ll be like; if I make $15,000 per deal, and save $5,000 for marketing, then I can spend $10,000 on toys for myself. What about saving for emergencies and growing the business?

Summary

Getting into real estate wholesaling really doesn’t have to cost much beyond investing in your real estate education. However, those that are serious should seriously consider organizing a business. This can be a lean startup, but make sure you budget accurately and thoroughly so you aren’t caught short.

Working Alongside Your Spouse As A Real Estate Investor

Those that have had a taste of the rewards real estate has to offer, often want to pull their spouses and significant others into the fold. So how do you convince your other half to take the leap? Is it even smart to do so? If you are on the same page, what are the best ways to work together in real estate?

How to Convince Your Partner of the Awesomeness of Real Estate

One of the most common questions real estate agents, investors, and industry startup entrepreneurs have is how to get their life partners as excited and involved in the business as they are. After all, if they only experienced the monetary, scheduling freedom, and thrill of real estate for themselves, they’d be hooked too, right? Plus, you could achieve so much more together!

Not everyone gets it right away. Many may think that it sounds too good to be true. Or maybe they aren’t that excited about having to learn something new, or taking the leap into something they haven’t proven to themselves works yet.

Of those that have reeled their partners and spouses into real estate with them; it is often a result of either letting them learn their way, or simply showing them the results. Bring in a few big money checks from your real estate closings and they’ll probably want to help you make more. Others just need to have their own “eureka” moment. Leave your books and real estate education courses laying around long enough and they’ll probably come to you.

4 Ways to Work in Real Estate Together

Whether you both magically fell head over heels for real estate at the same time, or you have finally come around; what are some of the options?

• Working side by side on the front lines of investing or real estate sales
• Owning and operating a real estate business together
• Working in different parts of the industry, but not together
• Helping each other out, but not necessarily both working in real estate

If you are going to work together; how will decisions be made? When you don’t agree, will one of you have the final say? How will you separate work from personal life, so that you aren’t working 24/7 and forget to enjoy your personal relationship?

If you will be operating a real estate business, either as a brokerage, real estate investment firm, or managing rental properties, who will adopt which roles? Is one of you more talented at sales and marketing, and the other at paying attention to the details? How will you plan for the day one of you no longer wants to work in the business, or your relationship hits the rocks? How will the real estate company you built keep going, or be wound down? Or will one of you simply be an employee of the company?

Another option is working in different roles within the real estate industry, but ones which complement each other. For example; one partner could be a Realtor and the other a mortgage broker. Or one a title company rep., and the other as a real estate investor.

The dream of working together in real estate can become an amazing reality for couples that can work well together. The perks of a fantastic income and flexible scheduling can really come together for these couples, and create a magical life.

However, not all couples are built to work together. If you feel you might be, make sure you are on the right page. Remember what is most important, and make sure you are in it for the right reason.

- See more at: http://www.cthomesllc.com/2015/03/working-alongside-spouse-real-estate-investor/#sthash.Nv4OvLqs.dpuf