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The journey of a thousand miles begins with one step. ~ Lao Tzu
When you think about everything involved with starting a new business, it’s easy to feel a sense of overwhelm.
There are A LOT of moving pieces to keep track of, and when you come to terms with how complex the process is, it’s no wonder why most people give up before they ever turn a profit.
Starting a real estate investing business is no different.
I still remember my first year vividly. I encountered TONS of questions, obstacles and head-scratching moments that left me feeling lost and confused.
The first 12 months of any business are crucial for an entrepreneur. A lot of important things happen during this window of time – things that will ultimately determine the fate of the new enterprise, and whether it will blossom into a smashing success story, or die a quick death before it ever gets off the ground.
I want to increase your chances of success. Rather than spending your first several months perplexed about what you should be doing, this “quick start” action guide will help you connect the dots and set up your real estate business infrastructure the right way, from the very beginning.
1. Understand Your “Why”
Let’s be honest. Why are you in this business? What’s your real motivation?
- To retire early?
- To inject huge amounts of cash into your bank account?
- To pay for your kid’s college?
- To build streams of passive income?
- To generate extra spending cash?
- To get your time back?
- To spend more time with your friends and family?
- To finance your favorite hobby?
- To fund your dream vacation?
- To give to charity or support your favorite non-profit?
There is no wrong answer – but whatever your answer is, you need to be very clear about it, so you’re fully aware of why you’re doing all this work in the first place.
Why is this important? Because there will inevitably come a time when you feel like giving up.
Running a business isn’t easy. Everyone struggles, and if you can’t constantly remember your WHY – it will be much harder to pick yourself back up when the going gets tough.
It’s not enough to simply know what you’re doing, you need to know WHY you’re doing it… so before you take one more step, take a few minutes and ask yourself,
“Why am I doing this?”
2. Get A Mailbox
If your real estate investing business is anything like mine, direct mail will be a crucial component of your marketing efforts.
Especially when you’re getting started, there is no faster and more effective way to find motivated sellers and make them aware of your offer to purchase their property.
What is your company’s physical mailing address? How can people get a hold of you? What should you use for the return address on the mail you send out?
I can tell you right now – it shouldn’t be the same place you live and sleep at night.
You’ll come across plenty of strange characters when you’re sending out mail to every segment of society, and it’s not the best practice to let everyone know where they can find you at all hours of the day.
Instead of using your home address – rent a mailbox. Renting a mailbox is relatively cheap, and the value is worth FAR more than the cost.
If you want to take this kind of remote mailbox to the next level, you could even go with a “virtual mailbox” service like Traveling Mailbox (be sure to check out this awesome review that shows exactly how it works). With services like these, you can get everything scanned to you electronically without ever leaving your computer – you can even check your physical mailbox from your phone!
Cool Trick: When you use one of these rent-a-mailbox services, you can refer to your mailbox as a “Suite”, “Unit” or “Apt”, as long as you include the number of your mailbox (this will make you look WAY more legit).
3. Set Up Your Phone System
For the same reason you don’t want to give out your home address to thousands of strangers, it’s a good idea to set up a dedicated phone number for your business.
This doesn’t necessarily have to cost anything. If you’re willing to live with some minor limitations, Google Voice can be a great way to knock this out quickly.
I’ve been using RingCentral for years now. It’s not perfect, and there are plenty of other solid choices out there, but I’ll explain why I like it in this video…
Whatever you decide to do, DON’T put your personal/home/cell number on all of your business cards, letterhead, website and mail you send out. The last thing you want is to have your personal line ringing off the hook during all hours of the day.
With a dedicated business phone number, you’ll be much more effective at managing your time and lines of communication.
4. Create Your Website
I currently have 3 websites at work in my real estate business, and they work wonders.
Websites are great at building credibility, providing helpful information, collecting data and selling while you sleep (among other things).
While it is possible to survive without a website, you’ll end up working A LOT harder than you need to if you don’t set up this kind of sales and automation tool.
If you’re starting from scratch, the first and most functional type of website I would recommend is a buying website.
Don’t worry – you don’t need to be a computer genius to do this! Check out these two videos and I’ll show you how to get started.
There are a TON of fancy things you can do with this AgentPress Pro (and many of the other options out there) if you’re willing to learn the ins-and-outs of it OR hire a professional from a place like Fiverr or Upwork.
RELATED: Working with Bluehost and AgentPress Pro is a very cost-effective way to get your buying website up and running, but it does require some patience and learning along the way. If you still find this process confusing and/or you’re looking for a more user-friendly alternative, you may be interested in an option like Lead Propeller or Investor Carrot, both of which can do 90% of the “heavy lifting” for you. These are subscription services with a higher monthly cost, but if ease-of-use is a priority for you, either one can make the process much easier.
5. Brand Your Business
When you’re starting any kind of business, something you’ll have to think about is your brand image (i.e. – how you portray yourself to the outside world).
As a real estate investor, this is even more important, because when you’re buying and selling properties, there are technically two arms of your company at work.
Arm 1 – Buying: This is the business name and image you portray as you’re looking for motivated sellers and buying properties. This name (and logo) goes on your buying website, your direct mail pieces, your letterhead and more. It should have it’s own dedicated phone number and website, with no links or connections to the “Selling Arm” of your business.
Arm 2 – Selling: This is a separate business name and logo, which you use when advertising and selling your properties. Likewise, this arm has it’s own dedicated phone number and separate selling website, with no links, mentions or connections to the “Buying Arm” of your business.
Of course, you don’t HAVE to structure your business this way. You can just use a single business name and façade for both purposes, but sometimes this can cause issues (for example, if you buy a property for $2,000 and the seller sees you list the same property on your website for $20,000 the next day).
To avoid any potential conflicts of interest, I’ve always used two separate business names (including logos, websites and phone numbers, etc.) to represent each arm of my business.
Both arms are operating under the same business entity (and my actual LLC name is what gets listed on all the contracts and deeds), but when I have an assumed name in place, it allows me to operate what looks like two unrelated businesses, even though they’re both operating via the same business entity.
Whether you choose to register a new business entity or operate as a sole proprietor, you will eventually have to decide how you want to brand your business as you move through the lifecycle of buying and selling properties. Even though this step isn’t required in order to start, you will have to make some decisions about this before you sell your first property, so it’s worth thinking about this from the outset.
Where the Rubber Meets the Road
Once you’ve navigated through this initial start-up phase and you’ve got the basic infrastructure of your business established, give yourself a pat on the back!
At the same time, it’s important to recognize one cold, hard fact.
You don’t actually have a legitimate business until you start making money.
When you’ve got above-mentioned pieces in place, your “deal processing machine” will be in good order, but remember – the whole point of all this is to make money.
You won’t start making money until you’ve started doing deals, and you won’t start doing deals until you’ve started pursuing property owners.
There are many ways to do this, but as I mentioned, my favorite method is through direct mail. If you’re looking for more insights on how to get started, be sure to check out these related blog posts:
- How I Find Motivated Sellers – Step 1, Step 2, Step 3
- Million Dollar Postcard Templates That Work
- How Much Should You Offer For That Property?
- Boost Your Acceptance Rate By Asking This Question
- How To Write Offers That Get Accepted (With 3 Simple Pages)
- Everything You Need To Know About Getting Your County’s Delinquent Tax List
- A Closer Look At My “Blind Offer” Template
- The Ultimate Negotiation Technique (That Nobody Talks About)