3 Ways Your Real Estate Investment Business Can Dominant It's Competition
Updated: Feb 26, 2019
Are you looking to get into the real estate investment business?
Have you seen the astonishing returns that some of these real estate investors are bringing home?
With that being said, real estate investing in general is on the rise. According to a RealtyTrac analysis, "6.6% of all single-family and condo sales in the first quarter of 2016 were flips."
More and more people are taking notice of the strategy of purchasing a property at a discount, adding value and reselling (or holding for the long term).
An increased number of participants and an increase in activity, only means one thing... an increase in competition.
To be successful during this period of time, we must find ways to separate ourselves and our businesses from the competition.
When we have increased competition, it will be harder to find deeply discounted properties, homeowners will be asking for a higher sales prices and our properties may sit on the market longer due to increased turnkey inventory.
So what can we do about this?
I'll tell you what, nothing get's me going like a little competition. Typically when we see an increase in activity in this field, it is usually from investors just starting out. They are still learning the game and figuring out ways to get their feet wet. While this is competition, it is good competition because it allow's business's like your's and mine to truly separate ourselves with our experience, market knowledge, relationships, creativity and strategy.
Dominate Your Market In A Competitive Business
1) Know your competition & who your competing against
So, you are in a hot market, maybe you have seen an increased number of players in your area or you continue to hear about more and more people getting into the business. I am sure this is true for anyone who is actively involved with a real estate investment business. The first step in dominating your local market is going to be to understand all the players in your arena. We want to know what businesses are actively investing in real estate, how they are marketing, which areas they are targeting and how long they have been in this business. This will give us a better understanding to what is working for our competition and if we can continue with our strategy or we need to make adjustments.
So how do we know who the real players are in our market?
It is simple, the businesses who are actively marketing or building a brand are the one's you need to study. You see, it's 2016 and we have this tool called the internet available to us. This little tool will tell us all the information that we need, upfront to diagnose our competition.
A) Local We Buy Houses + City Search
To find our local competition, we are going to run a simple search query in google. This search will give us a list of all the local real estate investment businesses in your area.
B) Create An Excel Document
Next, I want you to create a simple excel document so that we can track some basic information on our competition. Some information that we will want to track is:
Where they rank in google
Social Media Presence
How long they have had a website
Knowing who your competitors are, and what they are offering can help make your services and marketing stand out.
With this valuable information at our finger tips, we can now learn how they operate there phone systems, how authoritative they are in our market (google rankings), specific ways they do business, strategies (blog), how long they have been in business or operating (www.spyfu.com).
We can use this knowledge to create marketing strategies that take advantage of your competitors weaknesses, and improve your businesses overall performance.
2) Market creatively, Market aggressively, Market Smart & Market Consistently
If you have been in the real estate investment business for any time now, I am sure that you know that a lot of "real estate investors" treat this like a hobby. They do not have a marketing strategy, they are not consistently bringing in leads, they are not documenting their results, they may not even be marketing at all. If you are treating your real estate investment business, as that "a business" then you understand that the life of your operation depends on your ability to market effectively and to consistently bring in deeply discounted deals. I don't care which niche you choose to work in (wholesaling, house flipping, or holding) the only way we can make the money we want to make is by buying right and that all starts with marketing.
A) Market Creatively
When I use the word "creative" I do not mean reinventing the wheel and trying to implement a strategy that has never been proven. What I mean is, testing and tracking results for different marketing vehicles to find out which ones work in your market. By testing and tracking the results of our efforts we will know where to put our marketing dollars and how much money we should be putting towards each vehicle. When you get some extra money from all "the deals you start closing", try testing 1 different strategy at a time (on a small scale) to see if it sticks.
You have no internet presence, educate yourself on inbound/digital/content marketing. Create a lead generating website.
Have no experience with direct mail? Educate yourself, choose a list to market too, create some copy, add some extra information (brochures, testimonials) and test that list.
Create a marketing strategy, test it, track the results and then begin to get creative with alternative strategies once you have begun to bring in more deals through your marketing channels. If you have no success, continue reading.
B) Market Consistently
The name of the marketing game, is consistency. Any marketing strategy or plan will take time to take affect. We have to make sure that we are staying in touch with existing customers but also reaching new customers in the process. The more times that you can touch your target market, the better chance you have of seeing them take action towards your material. You will also be building your brand, building your message which allows you to gain increased traction in your market place. By marketing consistently you will reap the benefits of:
Message confusion among customers
Saving time & money
Increased response rates
Building a connection
Weather you are focusing on inbound marketing, direct mail, bandit signs, newspaper ads etc. You need to know how often you will write blog posts, how often you will send out direct mail, how often you will hang bandit signs. Stay consistent with your touch points, find out what the most effective touch rate is and stay consistent with your message across all of your channels.
C) Market Smart
Before you begin the marketing game, we have to understand some key metrics. Whether you are wholesaling, flipping or holding, the first step of smart marketing is knowing your average profit for deal. You can break this up into 3 different categories, if you practice all 3 of these niches.
When we talk about paid marketing, we need to know how much money we are bringing in on an average deal. This will determine how much money we should be spending on our marketing efforts to ensure we have a lucrative strategy in place. If you are just getting started, then go out and investigate the market, talk to other investors in your area and find out what their average profit per deal is.
The metric we need to understand is how many leads on average does it take to close a deal. This will allow us to work backwards to figure out exactly how much we need to invest with no guessing involved.
Once we understand these metrics, I want to go back to consistency. Once you come up with a strategy, don't stop too soon. Marketing takes time and we tend to see this a lot. You put a little bit of money into a marketing channel and leads do not start flowing in and we just give up. We need to be in this game for the long haul and the longer we have our material out into the public eye, the more traction we will gain.
Marketing is not an emotions game, that why we have to be smart with our marketing. We have to know and trust our numbers and stick to these numbers. We do not want to use emotion when analyzing if our marketing is working or not.
3) Developing Business Operating Systems
If you have read anything in the past that I write, you know that I am big on systems. Systems allow you to streamline certain aspects of your business so that your business can run and operate in a more efficient manner.
Developing systems for each department of your business will be vital when you are going through the process of finding a deal and closing the sale. All of that work in between needs specific systems to ensure that your business can run effectively and to allow for a certain amount of scalability down the road.
In our house flipping business, we focus on a couple key departments that we feel are important to operate this aspect of our business. These departments are marketing, acquisitions, financing, construction and sales. (On a company scale we include business management and business development). For each one of these departments we want you to create systems to lead you into the next department. By creating these systems, you will be able hire employees to execute your specific systems that you have in place.
For example, to initiate construction on a project that we have under contract, we will first create a scope of work (using an excel document we created). From this scope of work we create a material list (using an excel document, material list catalog, vendor material lists) documenting all of the material we will need on this specific job, with product numbers for specific vendors we use. From these 2 documents, we will create our overall job budget (excel document we created). Once we have these 3 documents in place, we will create a schedule (using smartsheets), so that our projects run smoothly, we are able to schedule subcontractors with confidence and all contractors are on the same page.
Creating these systems will not happen over night but it will allow your business to operate in an organized, efficient manner where your team will understand exactly how your process works.
Wrapping Up | 3 Ways Your Real Estate Investment Business Can Dominate Your Competition
We are well aware that more and more people are getting involved in the real estate investment business. This does not mean that this is a time to stand down and let your competitors steal business from you. This is a golden opportunity to set yourself apart from your competition and build your brand. However with an increased action in this space, we do advise you to continue to study your local market conditions, pay attention to any signs of a correction and continue to build your team so you garner the advice you need when you need it most.
We hope that this post gave you some insight on how you can separate yourself and your business from your competitors and what you need to do to be successful in this business.
If you have any questions, comments or concerns please let us know in the comment section below.
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