The Anti-Hustle Guide to Building a Real Estate Business From Scratch
Collaborative Post
Many people looking to start a real estate business imagine that they need to engage in the usual hustle and grind. The fact of the matter is that constructing a profitable portfolio is something that you can often put on autopilot after the first couple of years. Yes, initially things can be difficult and you’re learning the ropes, but after that you’ll make fewer mistakes and you’ll feel more confident. You’ll learn all of your processes and know what to do.
In this post, we look at some tips. If you’re looking to launch a real estate business from the ground up, don’t worry. It won’t be the usual set of instructions you’re used to on posts like these. Instead, we look at real estate businesses through completely different lenses so you can get a new perspective on the task that’s in front of you.
Check your minimum viable market
If you are interested in the startup world, you’ll know that many Silicon Valley entrepreneurs look for a minimum viable product, or an MVP. You can do the same thing when it comes to your commercial or residential real estate business.
Instead of trying to dominate a specific segment, you focus on a niche that you can then grow into something bigger and less focused. One way to do this is to target demographics that other investors are ignoring. Usually, there will be a subset of your market who are looking for something very specific or particular and aren’t being served by the current offering. If you can provide this, then you will lap up this market, and sometimes you can charge a premium.
At the same time, you’ll want to do what many Silicon Valley startups do and perform rapid iteration. You can test marketing messages quickly and cheaply using modern tools, and then pivot to new approaches if neighbourhood campaigns aren’t working. Again, this gives you the information you need to make the best decisions and prevents you from getting caught in a marketing process that lasts months before you get real feedback.
Automate your ground game
If you’re not using rental management services to automate your ground game, you’re missing out. Failing to use solutions that are already available will leave you spending most of your evenings and weekends putting out fires, communicating with clients, and generally performing administrative work. If you’re somebody interested in passive income and you’re not passionate about this type of work, then it doesn’t make sense to do it all by hand. That’s why it’s a good idea to use solutions to automate.
For example, you can design evergreen email sequences for buyers and sellers that trigger when they interact with your digital content. If you’re marketing your properties online, it’s often a good idea to have independent sales funnels outside of the platforms that you’re using to communicate with potential buyers.
You can also use modern tools to set up behavioural triggers. For example, you can get a CRM to provide you with alerts on client activities. You can also use these systems to reach out to clients only when their intent is highest and when they’re most likely to sign up, so you don’t spend all of your time chasing leads.
Build authority without listings
Most real estate businesses assume that listings are what enable them to build authority. After all, that’s the main touchpoint they have with renters or people looking to buy, but this is actually a myth.
Branding in the real estate sector works similarly to branding in other industries. It’s about trust and familiarity. The more people get used to your real estate business’s brand name, the more likely they are to want to use it. If you can build an established, trusted digital footprint, that will put you ahead of 90% of the competition.
It’s often a good idea to publish digital guides and other tools to help stakeholders make better decisions. For example, you could provide courses on securing home buyer grants or helping renters navigate local tax assessments. It’s really up to you to decide what the pressing issues in your community are and how you can meet a need.
Use proprietary data
Finally, if you have the option, it’s a good idea to leverage as much proprietary data for your real estate business as you can. Instead of following the data that everybody else is using, gathering your own and leveraging it can give you a distinct advantage in the marketplace and help you make better decisions.
What’s nice about building a proprietary data set is that it helps you spot off-market opportunities before they materialise. For example, you can monitor the public records for things like estate sales, probate filings, and zoning applications. These are often data points that precede a sale and tell you more about potential valuations in the future.
You could also use infrastructure arbitrage. As an experienced real estate business person will tell you, building around potential property sites can have a significant impact on their value. If you notice that a particular neighbourhood is going to receive an upgrade or a municipal project is going to transform a downtown area, then you might want to invest in that market.
What’s nice about using proprietary data is that it gives you a long-term perspective. You’re able to see what’s coming down the pike so you can prepare yourself accordingly. Sometimes future projects can actually lead to a loss of value of your properties, so it may be wise to sell them now before they trade at a discount.
When you start using these methods, you’ll notice that running a real estate business becomes more enjoyable and less of a hustle and grind. In this post, we’ve tried to give you the anti-grind antidote so you’re not spending all of your time working and trying to build a business that’s supposed to give you passive income. So which of these strategies will you try, and which niche are you going to target?