Formula for a Successful Real Estate Business

Posted on July 29, 2010 by IC N in Residential

Q-H, which is quality houses, that kind of goes, that’s the second step. I mean you want to have quality leads from motivated sellers but you don’t want to have junk. You know you don’t want to have houses that are not going to be marketable to your back end buyers. You’re going to want to houses that are, you know, your bread and butter type houses. You want to houses that are slanted to the left or, houses that are what’s known as functionally obsolete where you got shot gun house where you can, you know, open the door and basically the terms comes from taking a shot gun and shooting it through the front door and it going all the way back out the back door. So you don’t want houses like that or houses that are too small. You want bread and butter houses, quality houses because that’s where some wholesalers make a mistake thinking that just because they found a deal where the numbers may work, you know, they don’t have a good house. It’s just not going to sell because your investors aren’t going to want to junk.

And remember when I say I mean these houses are going to need to some type of work. They’re going to need some degree of fix-up whether it’s minor – paint and carpet, or whether it’s a full blown, you know, roof and air conditioning system and floor boards messed up. There’s new siding. Whatever the case may be, your still going to have a rehab house as wholesaler and that’s the key to remember is that most of the houses you’re going to wholesale are going to be your fixer uppers or your handyman specials. There not going to be your pristine houses in great condition and that’s because there’s a lot of equity in the houses in these fix ups. Because your end buyer’s going to be able to create that equity as they fix the house up.

S= System. You need a repeatable system. You need something that you can do day in and day out. That’s going to be your success. You don’t want to have, in any business, just like McDonald’s they want to steady stream of customers coming in and out and they can only do that if their systems internally can be repeated. They can always attract more customers. They can always attract the favorable terms with their suppliers and their vendors. Same thing you as a wholesaler want to do is be able to set yourself up where you can put this thing on auto pilot and systemize it where your doing the same thing, you know, the same automated systems, do what your doing over and over again until where it becomes really on auto pilot. So it’s very important to be successful and to be in a business where you can make $10,000 dollars from one deal every 30 days and then build this into a six figure or even a seven figure business. You need that repeatable system.

And then B-L. B-L is your buyer’s list. Your buyer’s list is your gold. It allows you to be able to find a, you know, when your out there looking for your houses you can say, “Oh yeah I know that John Smith would like this house.” Or, “I know that Sally would like this house.” You know your out there looking. You’ve already got in your mind, pre-determined what your buyer’s want because your tuned into them and developed that list. This is your goal because it allows you to be able to make offers with confidence knowing that you’re going to have a buyer to wholesale to right away. And that’s probably the biggest key for us is being able to develop our buyers list because part of our success is really attributed to knowing what our customers want and having the relationship with our buyers. And that’s the one thing that you as a wholesaler really, really need to focus on is that list of buyers. We can’t emphasize that more but your buyers list is very important.

R is very critical as well- your resources. These are your people on your team from the closing attorney that you have to real estate agents to contractors that you can refer out to inspectors to appraisers. You cannot be successful in this business or any business at all without teammates, without having people around you that compliment you – in house whether it be an assistant or a real estate agent that’s out there looking for deals for you. A big part of our success is really attributed a lot to our people internally and then our real estate. If we couldn’t do the amount of volume of business that we do without our real estate agents or without our closing attorneys being able to get deals done quickly when we need them to. So just, it’s really key to have the right resources in place, have the right team.