Starting your own business, no matter what the field is, can be a particularly daunting task. Amplify that by five and you have what it is like to be a real estate investor. Between the many different types of investments, how they are structured, price points, budgeting and much more, it is no surprise why many new investors do not make it through their first year.The frustration is only compounded by those who try to be a jack of all trades. There is just too much for the average individual to take in. The reality is that even the best, most seasoned, investors can’t do that. If you are looking to get your footing in the business, focus on one thing and do it better than everyone else. Specializing in a niche real estate market may be just what your business needs to succeed.
Between single-family, multifamily, condos, apartments, private money financing, tax liens and many more different aspects of the business, it is easy to get caught up trying to know and do everything. What the best investors know is that you don’t need to get involved in every deal that comes your way. By spreading yourself too thin you end up wasting time and in some cases money. You can make money if you focus on just one part of the business.
Tax liens, mobile homes and homes in depressed areas are just a few of the niches you can get involved in. Whatever part of the business you really enjoy and have some background in should be what you should do. If you lived in a multifamily house and are interested in them, you can look exclusively at two or three family properties. If you lived in a mobile home park and see value in them, consider them for your real estate niche. If you purchased a property through a tax lien sale and found the process interesting and profitable, you can make them the centerpiece of your business. Pick a niche, an area or a part of the business you really like and make it yours.
In doing so, you need to know more about it than everyone else. Saying you want to invest in something and knowing how to do it are two different things. Start with educating yourself on how your niche differs from others and how you can make it work in your area. From there, talk to fellow investors who invest in your niche and go to investing websites and find out the nuances of how it works. You may think you are taking a step back by only focusing on one area of the business, but what you will find is that you taking one step back to take two giant steps forward. Once you have your niche and start to establish yourself you can promote it. Over time you will be the person that your community calls when they have a deal in your area. Instead of being one of twenty investors trying to get a deal off the MLS, you can be one of a handful bidding on a tax lien property.
The quicker you can find your niche, the more focused and successful you will be.