I can assure you that running a business is no simple matter; it takes a lot of hard work and dedication. Entrepreneurs of every level have a tendency to want to be everywhere, do everything and take on as many projects as possible; it’s the nature of the beast. However, I can assure you there isn’t a quicker way to run yourself into the ground. That said, I highly recommend implementing real estate systems to help you through your daily routine. Establish systems that are capable of replicating the results you want to see on a daily basis, and be sure to create a system for every process in your company. Everything from ordering office supplies to closing on deals should have a system in place. That way, you can expect results, no matter who is in charge of the task at hand. Subsequently, having systems in place will enable your business to grow more efficiently.
Having been an investor for more than a decade now, I can assure you that some systems are much more important than others. There are those, however, that you simply can’t invest without, or at least I don’t recommend it. If you are looking to find your way to the forefront of the real estate landscape, I highly encourage you to look into implementing these five real estate systems; your business will be glad you did:
1. Marketing & Lead Generation: Lead generation is one of the foundations of any real estate business. Finding a real estate investment property may be the most important aspect of any deal. If you are not doing something every day to generate leads, chances are you will fall behind the competition. Fortunately, there are systems to help with marketing and lead generation; the key, however, is to implement one that coincides with steady results. I recommend reaching out to ten real estate agents every Monday morning. You can even spend a few minutes writing a blog for your website three times a week. When Tuesday comes around, don’t hesitate to promote your business through social media. Whatever it is you decide to do, you need set aside time every week to to do it. If you do decide you want to try a large campaign, you need to map it out before you start. Everything from the budget, presentation and execution must be thought out before you begin moving things forward. Lead generation can’t be something you do between deals or when you are slow; it has to be part of your daily routine. Without a system in place to keep on top of marketing and lead generation, things can quickly get out of hand.
2. Working With Sellers: I highly recommend implementing a system that allows you to seamlessly work with sellers, as generating leads is only half of the battle. That said, you need to be able to turn those leads into actual deals. Every time you have a seller lead, you need to be ready to act on it, and nothing gives the the ability to do so better than a proven system. Remember, time is always of the essence, and real estate is no exception. A strong system will help you quickly evaluate how serious the seller is. Upon first talking to them, you should have a list of questions that you want answered. Only then will you will be able to determine their motivation and what they want out of the transaction. From there, move to set up a meeting and physically see the property. Once inside the property, you should have another series of questions ready to reinforce the seller’s original answers. The more organized you are with your seller system, the easier it will be to discern the serious sellers from those that are just shopping around.
3. Property Evaluation: Above all else, you must have a system in place that allows you to evaluate properties. There are so many boxes that need to be checked over the course of a property walk though that you are only hurting yourself if you don’t have a well-devised system. It drastically reduces the risk of you missing something very important. A good property evaluation system will almost act as an inspection before the actual one occurs. Start by creating a checklist of items you need to look at. Plumbing, flooring, mechanical items and foundation should be at the top of your list. Once you are finished looking at everything on the physical property, take notes on the street traffic and neighborhood qualities. The more properties you look at, the better you will be at evaluating their potential. A good system greatly reduces the odds you miss something on your next property, so get to work on developing one immediately.
4. Deal Structure: How do you determine your offer price? Do you have a set formula that you use, regardless of outside factors? Remember, your initial offer is the starting point for acquiring a deal, not the end-all be-all. It is important to have a system in place to determine which properties you will make offers on and what the price will be. You also need to have an idea of how you plan to finance them. Certain deals may be better suited using cash offers, while others should utilize lender financing. Either way, you need to devise a system that can help you quickly determine which path you will take.
5. Accounting System: There is no reason every investor shouldn’t have an accounting system in place. In fact, it is inexcusable if you neglect to implement a system that keeps track of accounting. Regardless if you focus on rental properties or rehabs, you need to have an idea of how money flows in and out of your business. If you don’t pay your contractor on time, they will not work as hard for you on the next deal. If you are sloppy with your rent collection, you may encounter a late payment. Accounting is much more than simply handling money; it is developing a system that pays bills, buys supplies and best allocates your funds. It helps you know which items need to be paid and how you plan on paying them. Even if you do not have a background in finance, you can develop your own accounting system that works, and I suggest you do so sooner rather than later.
These five real estate systems will help your business run more efficiently and effectively. They will help you make quick decisions that will save you time. Instead of thinking about what to do next, a well-defined system will help you act without any hesitation.