• Daniel sisto

How To Scale You Real Estate Investment Business



A real estate investment business needs to be treated just like any other business. Just like any other business there are departments, systems and processes that need to be created in order to better organize and streamline operations. The primary goal of any "for profit" business is to produce enough revenue to scale. When we use the word scale in this post, we will be talking about growth. This growth will come from hiring new employees, increasing your marketing budget, purchasing new technology/ software to streamline operations and entering into new markets. This means in order to grow, we will have to spend money strategically to help the business create more revenue. For this post, we are taking into consideration that your business has already been functioning and you have had some minor success and you are interested in taking your business to the next level.

REVENUE/SALES

"The income generated from sale of goods or services, or any other use of capital or assets, associated with the main operations of an organization before any costs or expenses are deducted"

Before we get started, you have to understand how your business produces revenue. We also need to understand that without more/sufficient sales our business will not be able to grow and function. The only way we can increase our marketing budget, hire new employees, improve our processes is through additional/consistent revenue.

Do you operate a house flipping business? wholesaling? buy and hold? Once we know how the business will produce income, we will be able to forecast how much revenue we will need to produce in order to operate at a specific business level. From our revenue goals, we can back into how many deals we will have to complete a year through taking our average profit per deal and dividing by our total business revenue goals. Once we are producing enough revenue as a business, the business will be able to absorb more expenses, such as an increased marketing budget, new employees and innovating technologies.

MARKETING

In order to produce revenue in our real estate investment business, we will have to produce leads. We produce leads through the execution of a marketing plan. The majority of successful marketing strategies cost money. We will use the revenue from our business to support our marketing budget. If we are truly operating a real estate investment business, we will have to be able to source off market deals. Our marketing strategy will most likely include a variation of direct mail, bandit signs, cold calling, SEO, paid facebook ads, PPC, flyers, door knocking, radio, television and several other mediums that you can explore. The key to any marketing campaign will be your ability to be consistent and test to see which mediums are successful and which ones are not. In order for us to be consistent with our marketing, we will have to produce enough revenue to sustain our marketing budget. In order to best utilize our marketing spend, we will need to create and track certain KPI's to determine which marketing mediums are providing us the best results. Some of the KPI's that you consider tracking are:

  • Cost per lead

  • Cost per appointment

  • Cost per offer

  • Cost per closed deal

  • Rates of conversion lead, appointment, offer, closed deal

Our cost per closed deal will tell us which marketing vehicles we should double down on and which ones we should no longer use or iterate to test an improve. It will also tell us how much money we need to spend to make x amount in revenue (average revenue per deal).

HIRING EMPLOYEES

Once you are able to produce enough revenue to consistently execute your marketing strategy, if you are interested in scaling your operation, your next thought will have to be to begin hiring employees. Being a solopreneur can only take you so far. When you operating a business, there are several moving parts and if you are a solopreneur, it does not leave you much time to actually work on the business because you are spending the majority of your time working in the business. When you are working in your business all the time, it is hard to find time to create systems and processes to streamline certain activities. By creating systems and processes for your business, you will have a much easier time hiring employees and plugging them in to your systems. When we are hiring employees, we create employee playbooks, work through an on-boarding process and training system in order to ensure that our employees are on the same page as to our expectations. As we begin to hire employees, it will free up more time for the business owner to focus on revenue producing activities as well as continuing to streamline the systems in the business to improve efficiencies, thus reducing costs and improving bottom line.

Instead of hiring employees in house, we can strategically outsource certain tasks to Virtual Assistance to limit our overhead and offer similiar production at a reasonable rate. Now hiring a knowledgeable virtual assistant takes time, effort and training, very similiar to hiring any other type of employee. There are currently services out there that will head hunt the best virtual assistant talent to meet your specific goals. At this point, you will be able to interview the candidates they bring to you and determine if they will be a good fit or not. The 2 companies that we would recommend for this service is: Rocket Station and Virtual Assistant Services. As a business owner, determine which tasks you would like delegated, create playbooks (training manuals) and begin to go through the hiring process to delegate these non revenue producing activities.

CLOSING

Our ability to scale and grow depends on our ability to sell, implement and execute a strategic growth plan. As we begin to grow and produce more revenue, we are going to have more cash reserves. As a business owner to successfully scale, we have to have a plan to put these monies to use to allow us to make additional revenue for the business to continue the cycle of growth. If you do not have a plan, it is very easy to spend your revenue in areas that will not be beneficial to the growth of your business. This is why it is very important to determine how you are going to spend your additional revenue as sales begin to increase. Put together a plan, strategically increase your marketing budget, test different marketing mediums and determine what your strengths are and hire around your weaknesses.


We are committed to serving you with quality and value. We believe that everyone deserves to have an alternate, hassle free home selling solution. We offer our expertise to get you the outcome you want.

Reserve A Complimentary Property Consultation With the Experts at

HS Property Funds 

315-516-8023

5701 East Circle Drive #163

Cicero NY, 13039

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