How To Prevent Flipping Houses From Becoming A 9-5
Investing in real estate is attracting to people and it should be, if done properly there are a tremendous amount of benefits that can be reaped.. Some have the wrong impression that investing in real estate is easy, takes no time and you can get rich without much effort. I can assure you that is not the truth. No matter what you do in life, if you want to be successful, it will take hard work. Hard work doesn’t mean that you are working IN your business day and night. The best way to be successful in a business is to work ON your business on the front end, put systems in place during these long hours so as your business progresses you are able to scale and become more efficient. There are certain members of your team and systems & processes that will need to be created to allow you to not have as much personal involvement in the company, besides trying to make it grow.
The most important part of creating a real estate business that will be able to run without you is your TEAM:
There are several different aspects of your business and you will not be able to work on every aspect of your business or have a successful business taking that approach. You will need to delegate certain areas of your business to specific people on your team. The first step of this delegation understands what aspects of the business you personally thrive in and what aspects of the business a team member would be more proficient. You have to be honest with yourself, but having others do duties you have a hard time with wont stretch you out and will allow to you work on decisions and strategies to grow your business. Some key members of your team will be contactor(s), Real Estate Agent(s), Attorney(s), CPA, Lawyer(s), and Accountant. These are the initial roles you will need to fill to complete a house flip. As you scale up and grow you can begin to delegate other tasks such as marketing, project managers, and superintendents and so on.
The next item on your list will be to develop a successful MARKETING PLAN because as we all know this business doesn’t operate unless you have a sufficient number of leads coming in the door each month. Developing a SUCCESSFUL marketing plan is not easy and will take some time and testing. You need to do some research and put together a plan that you can continue to work from and see results. Obviously with any plan, change is eventually necessary, but focus on putting together a plan where a certain amount of leads are coming in each month that will satisfy your goal profit. There are several resources on the internet that can educate you on this topic but each market is different and each market will get different responses from your marketing attempts. I advise you to not give up if you are having trouble bringing in leads, like I said this is the hardest part of the business. Do not get discouraged, keep making small changes and see what sticks.
Another important aspect of the business you want to be aware of is STRETCHING YOURSELF TO THIN. You do not want to try and scale too quickly. You want to have the proper infrastructure in place before you even think about growing your business. By stretching yourself to far out, you put yourself at risk of going out of business. You want to make sure you have systems in place for each step of the process and you can complete ONE flip with no problems or if problems occur you know how to handle them. Another reason you don’t want to stretch yourself to thin is because of financing. A lot of people who are just starting out do not have the cash to fund these flips or the experience to raise money. So you want to be aware of your financial situation before you start telling yourself you’re going to be flipping 10-20 houses or even 2 houses a year. Understand your LIMITS!
Now, even though I said your TEAM is the most important part of developing your business. I have to save a close second is the SYSTEMS that you develop for your business. This is where working ON your business creates a successful business and working IN your business will make this business more like a 9-5. I am going to tell you when people first hear of systems and processes that get a little worried, I did to. This is because they do not know where to start or even what a system is.
A business system is a procedure, process, method, or course of action designed to achieve a specific result. Its component parts and interrelated steps work together for the good of the whole. Creating effective business systems is the only way to attain results that are consistent, measurable, and ultimately benefit customers.
The first step to take to create systems is to identify every step in the flipping process from start to finish. Lay out each one of those steps and try to create a system (checklist, process, excel sheet, assign a team member.. whatever it may be) to make that one step run without much work on your end or at least an organized way to complete that step EVERYTIME. Eventually you want to have systems in place for every step so that you give these systems to anybody, anywhere and they would be able to execute your business (model)
I hope this helped to explain different aspects of your business that you will have develop in order to create a successful real estate investing business and one that you will not be stuck in. Real estate investing IS fun, but only if you are making money doing it. Remember you will have to put in some work up front but hopefully with time you can create a plan that will make each aspect of your business easier to execute.