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2014 REAL ESTATE

INVESTINGREPORT

2 - 2014 REAL ESTATE INVESTING REPORT © 2014 Realeflow

2014 REAL ESTATE

INVESTINGREPORT

COPYRIGHT NOTICEAll rights reserved. No part of this publication may be reproduced or transmitted in

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LEGAL NOTICEWhile attempts have been made to verify information provided in this Publication and

any accompanying video and audio presentations, neither the author nor the publisher

assumes any responsibility for errors, omissions, or contradictory information contained

in this document.

This document is not intended as legal, investment, or accounting advice. The purchaser

or reader of this document assumes all responsibility for the use of these materials and

information.


2014 REAL ESTATE

INVESTINGREPORT

TABLE OF CONTENTS

Introduction ..................................................................... 4

Executive Summary ........................................................ 6

Properties Invested In To Date ................................... 8

How Old Are Investors? ................................................ 9

Primary Focus In Real Estate Investing ................. 10

Primary Source Of Income ........................................ 11

Primary Source Of Seller Leads ............................... 12

Primary Source Of Buyer Leads ................................ 13

Experience With Real Estate Agents ....................... 14

Experience With Social Media .................................. 15

Experience With Bandit Signs ................................... 16

Experience With Direct Mail ..................................... 17

Experience With Websites ......................................... 18

Experience With Auction Sites ................................. 20

Common Business Tools ............................................. 21

Primary Source Of Funding ........................................ 24

Real Estate Investing Activity Preference ............. 25

Average Time Spent On Investing Activities ......... 27

To Grow Business In The Next 12 Months ............. 30

Real Estate Investing Tools ....................................... 32

Conclusion ...................................................................... 37


2014 REAL ESTATE

INVESTINGREPORT

INTRODUCTIONWelcome to the 2014 Real Estate Investing Report. What started out as a seemingly small

project has morphed into arguably one of the most expansive and valuable collections

of data our industry has ever seen. During a 24-day period in April, 2014 we collected

over 32,000 responses from across the country. The respondents varied in age, location,

expertise, focus, and success rate.

This report will serve as an incredibly valuable data set and also a reference point for our

industry. Additional responses will be collected throughout the rest of 2014 with an end of

year version available for download to each survey respondent.

When we began this project our main objectives were to:

1. Separate out the results from the top 2% of investors so that we could understand

what differences existed between how they tackle the real estate investing business

versus the other 98%. When the results came in it became clear that there was a

far more natural fault line at 5.3%, which just happened to be the bracket for those

people who invested in over 200+ properties.

2. Identify “success traits” that may allow us to pinpoint why investors succeed and,

maybe more importantly, why they fail.

3. Understand the short and long-term problems and constraints that investors face

on a consistent basis. And, potentially identify solutions to these issues.

For the purpose of this report we will refer to this top group of investors as “The Leaders.”

Does this mean that all of those in the The Leaders are “better” than those in the other

95%, which we will refer to as “The Pack?” Absolutely not. It does, however, allow us to map

the actions and attitudes of a distinct group of investors who have clearly had massive and

consistent success in the business.


2014 REAL ESTATE

INVESTINGREPORT

While the responses to each question are extremely interesting, it may make sense to start

by reading the Executive Summary followed by the Conclusion or the “Big Aha’s” as we call

them. If you’re only going to spend a few minutes digesting the information, this will offer

the most immediate value. However, we suggest that you take 30 minutes and read the

entire report. We’ve spent a great deal of time, not only collecting the responses but also,

analyzing the data so it can add immediate impact to your business.

Of particular interest is how The Leaders spend much more of their time operating in what

we call “The Real Estate Investing Lifecycle” than The Pack. Also, of note, are the different

patterns and trends that we’ve seen emerge from the data. It seems obvious now that lead

generation, funding, and “bandwidth” (time and effort) dwarf all other responses, both good

and bad, in the survey.

We hope this information serves as a foundation and a springboard to your success. We

think you’ll quickly see that with a little hard work you’re probably not that far off!


2014 REAL ESTATE

INVESTINGREPORT

EXECUTIVE SUMMARYLead generation, funding, and bandwidth were the three most prominent themes of the 2014

Real Estate Investing Survey. When comparing The Leaders with the rest of the group, there

were some very sharp contrasts in these 3 main areas.

LEAD GENERATION

Leads were (unsurprisingly) front and center in the minds of almost every investor who

participated in this research. While the need for leads was united across the board, the

method for generating them was not. The Leaders focused far more on tried and tested

channels such as real estate agents, word-of-mouth referrals, and direct mail. The rest of the

pack had a much more varied approach including newer methods such as their own websites

and third party sites such as Craigslist as well as social media.

The Leaders enjoy, and spend more time on, marketing and sales activities vs. The Pack who

spends more time on analysis and operations.

The most successful lead generators appear to be those who understand, enjoy, and invest in

marketing. Amongst some of the less successful lead generators, the need for leads does not

always equate to a need for marketing.

FUNDING

Challenges in the economy over the last several years have made property acquisition easier

for those with access to funds. Those same economic challenges have, however, made it

more difficult for those looking to borrow money to fund investments.

Our data shows that many of those who are at the top of their game have largely walked

away from banks, and now rely on private lenders or their own capital. Those outside of The

Leaders are still working with banks as well as hard money lenders, to augment funds they

may not be able to access through private lenders or their own capital.


2014 REAL ESTATE

INVESTINGREPORT

The challenge for the 95% will be in breaking the cycle that continues their reliance on banks

and hard money lenders.

The most successful investors in this area are those who continue to develop relationships

with existing lenders while proactively targeting new lending sources.

BANDWIDTH

Challenges around bandwidth change as investors evolve. New investors continue to run out

of hours in the day as they struggle to balance investment activities with full time jobs and

other obligations.

Those who have moved into full time real estate investing are drowning in necessary, yet

low value, tasks which prevent them from tackling higher value, direct revenue generating

activities. This group continues to look to technology to automate aspects of the investing

lifecycle. Alternatively, this group continues to look for ways to simply outsource elements

such as marketing, paperwork, and general administration.

Once an operation grows from a solo venture to a team operation, the focus shifts from

quantity to quality. Better trained and more experienced staff enable principals to delegate

more and turn around projects more quickly and with fewer errors.

The most successful investors in this area are those who recognize that time and personnel

limitations will always exist. These investors prioritize high value tasks and actively seek out

solutions that enable them to capitalize on the time they do spend on specific activities.

When reviewing the responses as a whole, it is clear that the most successful investors are

those who focus their efforts on the earlier steps in the investing lifecycle while finding

creative solutions for managing the necessary activities that come later in the process.


2014 REAL ESTATE

INVESTINGREPORT

HOW MANY PROPERTIES HAVE YOU INVESTED IN TO DATE?

0%

10%

20%

30%

40%

Number of Properties

1-5 6-20 21-50 51-200 201+

PROPERTIES INVESTED IN TO DATE


2014 REAL ESTATE

INVESTINGREPORT

HOW OLD ARE YOU?DO INVESTORS GET BETTER WITH AGE?

48% of The Leaders fall into the 31-50 age range. Furthermore, 44% fall into the 50+

category. A whopping 93% of everyone else is 31 and over. These numbers show us that real

estate investing is much more a marathon than a sprint. Those looking for a get rich quick

scheme, may do better trying to design the next Flappy Bird app. While success can be

achieved rapidly (months) true long term wealth often takes years to create.

0%

15%

30%

45%

60%

Age in Years<22 23-30 31-50 50+

The Leaders The Pack

AGE OF INVESTORS



2014 REAL ESTATE

INVESTINGREPORT

WHAT IS YOUR PRIMARY FOCUS IN REAL ESTATE INVESTING?

Rehabbing clocks in at the top spot for both The Leaders (53%) and The Pack (39%).

Rehabbing offers, perhaps, the best opportunity to add value to a property and, therefore,

net the most profit. Rehabbing is, however, the most capital intensive and risky, which is why

so many investors begin (and often stay) with wholesaling, which is far less demanding on

funds.

It should be noted that many respondents also reported doing business across multiple

categories.

0%

15%

30%

45%

60%

Landlord Rehab Short Sale Wholesale


PRIMARY FOCUS IN REAL ESTATE INVESTING



2014 REAL ESTATE

INVESTINGREPORT

WHAT IS YOUR PRIMARY SOURCE OF INCOME?

97%

2%

1%

66%

32%

2%


PRIMARY SOURCE OF INCOME

DO YOU HAVE TO BE IN IT TO WIN IT?

97% of The Leaders are entirely dedicated to real estate investing versus just 66% of The

Pack. Real estate agents account for a third of those outside of The Leaders, but barely

register a blip inside it. Many respondents to the survey cite lack of available time as a key

challenge to getting deals done, let alone managing the volume of business required to get

into The Leaders. The data also shows that the most successful lead generation channels

involve face-to-face interactions, which can be hard to achieve for those limited to just a few

hours per week to dedicate toward real estate investing.

Real EstateInvestor

Real EstateInvestor

Real EstateAgent

Real EstateAgent

OtherOther


2014 REAL ESTATE

INVESTINGREPORT

WHAT IS YOUR PRIMARY SOURCE OF SELLER LEADS?

Traditional lead generation channels such as real estate agents, word-of-mouth referrals,

and direct mail are the three most popular avenues for both groups.

The Leaders are more concentrated on these three activities compared with The Pack, which

is spending time across a wider variety of channels such as 3rd party sites like Craigslist and

social media, as well as their own website.

The data indicates that availability of time may be a significant factor in how these two

groups approach their lead generation activities. The more traditional methods may require

investors to build close relationships with business partners and establish trust over time.

New or time constrained investors may not have the same opportunity to get out there and

develop these relationships and are relying on digital tools to help bridge the gap.

3rd Party Web Sites

Auction Sites

Bandit Signs

Direct Mail

Real Estate Agents

Referrals

Social Media

My Web Site

0% 10% 20% 30% 40%


78% of The Leaders group still uses traditional lead generation activities.

PRIMARY SOURCE OF SELLER LEADS



2014 REAL ESTATE

INVESTINGREPORT


3rd Party Web Sites

Direct Mail

Real Estate Agent

Referrals

Social Media

My Web Site

0% 13% 25% 38% 50%


PRIMARY SOURCE OF BUYER LEADS

WHAT IS YOUR PRIMARY SOURCE OF BUYER LEADS? Real estate agents and word-of-mouth referrals still occupy the number one and two

positions, remaining in line with investor tactics for generating seller leads. For buyer leads,

3rd party websites have pushed out direct mail to assume third place.

In general, buyer lead generation presents far less of a challenge to investors than seller lead

generation in this current market. Based on survey responses, generating buyer leads didn’t

seem to represent a large constraint in their business. Investors are, however, looking for

newer, cheaper ways to market their properties. Moving forward, we will not be surprised to

see social media play a larger role in buyer lead generation.


2014 REAL ESTATE

INVESTINGREPORT

EXPERIENCE USING REAL ESTATE AGENTS

0%

13%

25%

38%

50%

Using - Success Using - Mixed Used in Past Considering Not Using


Results


TELL US ABOUT YOUR EXPERIENCE WITH USING REAL ESTATE AGENTSWhile real estate agents remain the cornerstone for brokering transactions, the data

suggests that a subset of investors are not seeing the kind of the results they would like

from their agent. Comparatively speaking, The Leaders appear less frustrated than the

rest of The Pack, likely due to the value agents provide in terms of qualified leads to those

investors moving a large volume of property. The Leaders likely understand that developing

solid relationships with agents is critical in both buying and selling, while The Pack seems to

operate a little less systematically and more transactionally.


2014 REAL ESTATE

INVESTINGREPORT


TELL US ABOUT YOUR EXPERIENCE WITH SOCIAL MEDIA

While social media has attracted an unprecedented number of daily users from

Grandmothers to their Grandkids, its adoption as a lead generation platform for real estate

investors in still in its infancy. The data collected in the survey indicates that while a limited

group are having a certain level of success, most investors are still in “wait and see” mode.

Very few of the respondents (less than 5%) have dismissed it as something they used and

then ultimately dismissed.

Anecdotal data suggests that social media may gain more attention as it matures and

vendors simplify their ad management experience.

Social Media - still more cats and kittensthan leads and conversions.

EXPERIENCE WITH SOCIAL MEDIA

0%

15%

30%

45%

60%



Results


2014 REAL ESTATE

INVESTINGREPORT

EXPERIENCE WITH BANDIT SIGNS

0%

8%

15%

23%

30%



Results


TELL US ABOUT YOUR EXPERIENCE WITH BANDIT SIGNSSurprisingly, a far greater % of The Leaders are successfully using bandit signs in their

marketing when compared to The Pack. Traditionally viewed as an “entry level” marketing

method it seems that many investors have used, and will continue to use, them in the future.

Consistency, it seems, is important when you consider the %’s in both groups that have used

them both successfully and with mixed results in the past. Repetition is a key to marketing

and it looks like it holds especially true here.


2014 REAL ESTATE

INVESTINGREPORT


EXPERIENCE WITH DIRECT MAIL

0%

10%

20%

30%

40%



Results

TELL US ABOUT YOUR EXPERIENCE WITH DIRECT MAILDirect mail remains an effective marketing method for The Leaders, while a large % of The

Pack is considering it as a source of seller and buyer leads. There is a slightly higher barrier

to entry when compared to other traditional marketing methods and that is likely the cause

for many in The Pack to be in the “consideration” phase. While reviewing some of the open

ended text responses it seems that finding reliable and consistent servicers (list providers,

mail houses) is of the utmost importance to both groups.


2014 REAL ESTATE

INVESTINGREPORT

TELL US ABOUT YOUR EXPERIENCE WITH WEBSITESCreating and maintaining a business website presents the same challenges to investors as

it does to any other business sector. Creating an engaging site that is easy to find can be

a costly and time-consuming exercise. Maintaining timely and relevant content is often

an even greater burden, especially among those investors who have little inventory to

showcase.

It is apparent, the data suggests, that those more experienced investors view their website

as having two main purposes: to position themselves and their company as professionals

AND to generate leads for their business. Newer investors tend to ONLY consider the

amount of leads their website is generating when measuring its effectiveness.

• 3 times as many investors in The Leaders group are reporting success with their own website as those in The Pack.

• 56% of The Pack are not currently operating their own website.

• More investors in The Pack are reporting higher success with third party websites than their own.

• Investors who have used either type of website in the past account for the lowest response number.

Third party sites negate many investor issues as they allow investors to simply post content

rather than having to maintain a site. The challenge for investors in this area is getting their

content noticed by their target buyers and sellers.


2014 REAL ESTATE

INVESTINGREPORT

0%

13%

25%

38%

50%

Using Now - SuccessUsing Now - Mixed Used in Past Considering Not Using


Using Success Using - MixedResults

Used in Past Considering Not Using

YOUR OWN WEBSITE

THIRD PARTY SITES

0%

10%

20%

30%

40%


5% 95%

Results




2014 REAL ESTATE

INVESTINGREPORT

TELL US ABOUT YOUR EXPERIENCE WITH AUCTION SITES

Auction sites tend to be a newer marketing channel for finding properties and potentially

selling inventory. It appears that both groups are going to consider them as a viable

alternative in the future, while far more of The Leaders are having success right now.

We predict that auction sites will become more popular as property inventory continues to

increase on these sites. Auction sites will likely see a jump in usage amongst those investors

who are most limited on time or who are looking for a consistent source of readily available

deals.

0%

13%

25%

38%

50%



EXPERIENCE WITH AUCTION SITES



2014 REAL ESTATE

INVESTINGREPORT


COMMON BUSINESS TOOLS

0%

15%

30%

45%

60%

Desktop Laptop Pen & Paper Phone Tablet


WHICH TYPE OF DEVICE DO YOU PRIMARILY USE TO MANAGE YOUR BUSINESS?


2014 REAL ESTATE

INVESTINGREPORT

WHAT IS YOUR PRIMARY METHOD FORPULLING COMPS TODAY?

CREATING OFFERS

0%

15%

30%

45%

60%

County Tax Data Direct MLS DataMLS Data via 3rd Party Paid Service Free Service


County Tax Data Direct MLS Data MLS Data via3rd Party

Paid Service Free Service



0%

13%

25%

38%

50%

Manually Create a Document Paid App or Service


Manually Create A Document Free App or Service Paid App or Service Real Estate Agent


2014 REAL ESTATE

INVESTINGREPORT



0%

10%

20%

30%

40%

A Free App/ServiceDo Not TrackDocuments on ComputerDocuments in CloudA Paid App/Service Pen & Paper


A Free App/Service Do Not Track Documents on Computer

Documents inCloud

A Paid App/Service

Pen & Paper

HOW DO YOU TRACK PROPERTIES YOU ARE BUYING?

HOW DO YOU TRACK LEADS AND CONTACTS?

0%

15%

30%

45%

60%

General CRMReal Estate Investing CRMManual DocumentsWeb/E-mail Contacts Pen & Paper


General CRM Real EstateInvesting CRM

Manual Documents Web/E-mailContacts

Pen & Paper


2014 REAL ESTATE

INVESTINGREPORT

WHICH IS YOUR PRIMARY SOURCE OF FUNDING? PRIMARY SOURCE OF FUNDING

0%

18%

35%

53%

70%

Bank Hard Money Own Money Private Money


Of all the questions posed on the survey, the responses to this funding question most clearly

delineated the differences between The Leaders and The Pack. Most striking is that The

Leaders almost never use banks to finance their investments, preferring to utilize their own

capital or funds from private lenders.

The move away from banks and hard money lenders enables those investors to move much

more quickly on deals, using less expensive money. The challenge to the rest is how to make

that same transition. The answer is once again, marketing.

Investors need to develop their brand in order to build confidence in private lenders.

Investors also need to target private lenders in much the same way they would sellers, using

regular communication and a consistent message that creates trust and mitigates potential

risks in the eye of the lender.



2014 REAL ESTATE

INVESTINGREPORT


REAL ESTATE INVESTING ACTIVITY PREFERENCE?

0%

9%

17%

26%

34%

Analysis Marketing Operations Sales

5% 95%

MOST ENJOYED


2014 REAL ESTATE

INVESTINGREPORT

0%

10%

20%

30%

40%

Analysis Marketing Operations Sales

5% 95%

LEAST ENJOYED


Sales and marketing are generally considered to be the highest revenue producing activities

in the “The Real Estate Investing Lifecycle” and those which provide the greatest return.

The Leaders are far better positioned for success than The Pack if, for no other reason,

than they enjoy executing those activities. The Pack enjoys analysis indicating that a higher

percentage of their time is likely spent on planning and analysis rather than pipeline building

and execution.

Both groups cite operations as the least enjoyable aspect of their work. Unfortunately for

these investors, the data in the next section of the report shows that the operational side

appears to be one of the most bandwidth consuming elements of their business.


2014 REAL ESTATE

INVESTINGREPORT



SALES AVERAGE

MARKETING AVERAGE

Sale

s H

ours

Per

Wee

k

2

4

6

8

10

12

14

16

18

20

0% 10% 20% 30% 40%

2

4

6

8

10

12

14

16

18

20

0% 10% 20% 30% 40%


Mar

ketin

g H

ours

Per

Wee

kAVERAGE TIME SPENT ON INVESTING ACTIVITIES


2014 REAL ESTATE

INVESTINGREPORT

2

4

6

8

10

12

14

16

18

20

0% 8% 15% 23% 30%


ANALYSIS AVERAGE

OPERATIONS AVERAGE

2

4

6

8

10

12

14

16

18

20

0% 8% 15% 23% 30%


Anal

ysis

Hou

rs P

er W

eek

Ope

ratio

ns H

ours

Per

Wee

kThe Leaders The Pack



2014 REAL ESTATE

INVESTINGREPORT

It was very interesting to see the differences among the two groups when it came to how

they spent their time. It seems apparent that The Leaders spend a greater amount of time

in sales and marketing activities than The Pack. It’s also apparent that The Leaders spend

more time in actual steps of “The Real Estate Investing Lifecycle” and, hence, achieve greater

results. It is obvious that many in The Leaders are attempting to work “ON” their business

instead of “IN” their business.

• 51% of The Pack spends no more than 4 hours each on marketing.

Only 21% of this group spends more than 10 hours each week on marketing.

• Members of The Leaders group most commonly spend 10 hours each week on

sales activities, whereas The Pack most commonly spends just 2 hours.

• 25% of The Leaders dedicated 10 hours to analysis each week versus just

12% of The Pack.

• Most strikingly, most investors in The Leaders group spend 20+ hours each

week on operations versus The Pack where most investors spend just 2 hours.


2014 REAL ESTATE

INVESTINGREPORT

Increase Seller Leads

Get Better Access to Funding

Improve Rehabbing Process

Increase Buyer Leads

More Effectively Negotiate with Buyers

Improve Property Purchase Process

Improve Close Process

Improve Inspection Process

More Effectively Negotiate with Sellers

More Effectively Pre-qualify Sellers

0% 13% 25% 38% 50%


TO GROW MY BUSINESS IN THE NEXT 12 MONTHS I MOST NEED TO…

Investors face a core set of challenges across the board; finding deals, funding deals, and

better executing the rehabbing phase of the project.

The need for seller leads continues to dominate the results in this report. All investors

recognize the need to keep the funnel full. It’s now apparent that even The Leaders have a

strong desire and need to find more deals to work on. As they become more efficient their

ability to handle more deals increases as does the need to keep their funnel full and increase

profits.

TO GROW BUSINESS I NEED TO



2014 REAL ESTATE

INVESTINGREPORT

The Leaders are marginally more focused on improving their funding situation. We expected

The Pack to rate funding more highly as something to improve upon given their continued

reliance on banks and hard money lenders.

The Leaders additionally seem more aware of the need to improve the rehabbing process,

which often affects how long an investor has to hold onto a property as well as the revenue

they may ultimately realize. Improving operational efficiencies is a key to improving profits

long term.


2014 REAL ESTATE

INVESTINGREPORT

PROFESSIONAL WEBSITE WITH SEO

HIGH QUALITY LEAD SOURCES (CASH BUYERS, PRIVATE LENDERS, AND FORECLOSURE LISTINGS

0%

18%

35%

53%

70%

1 2 3 4 5

5% 95%

Not Impt SomewhatImpt

VeryImportant

ExtremelyImportant

Important

0%

18%

35%

53%

70%

1 2 3 4 5

5% 95%


VeryImportant

ExtremelyImportant

Important

REAL ESTATE INVESTING TOOLS



2014 REAL ESTATE

INVESTINGREPORT

ACCURATE ESTIMATING SOFTWARE WITH SKU TO ACTUAL PRODUCT (HOME DEPOT, LOWES,ETC)

0%

10%

20%

30%

40%

1 2 3 4 5

5% 95%


VeryImportant

ExtremelyImportant

Important



2014 REAL ESTATE

INVESTINGREPORT

0%

10%

20%

30%

40%

1 2 3 4 5

5% 95%

MOBILE TOOLS FOR SENDING SMS/VOICE BROADCAST MESSAGES

DIRECT MAIL/ YELLOW LETTER ENGINE MARKETING

0%

10%

20%

30%

40%

1 2 3 4 5

5% 95%


VeryImportant

ExtremelyImportant

Important


VeryImportant

ExtremelyImportant

Important




2014 REAL ESTATE

INVESTINGREPORT

PAPERWORK AUTOMATION

CRM TO MANAGE ENTIRE BUYING & SELLING PROCESS

0%

10%

20%

30%

40%

1 2 3 4 5

5% 95%

0%

10%

20%

30%

40%

1 2 3 4 5

5% 95%


VeryImportant

ExtremelyImportant

Important


VeryImportant

ExtremelyImportant

Important




2014 REAL ESTATE

INVESTINGREPORT

EVERYONE NEEDS LEADS

We asked investors to rate various real estate investing tools on a scale of one to five; one

meaning not important and five meaning extremely important. This data provided valuable

insight and again reaffirmed the notion that many investors view leads as THE MOST

critical factor for success in their business, yet view marketing tools as comparatively less

important. 63% of The Leaders viewed lead sources as extremely important compared with

77% of The Pack.

MANAGING THE PROCESS

Many investors are recognizing the importance of more efficiently managing the investing

lifecycle. Improved comping solutions scored highest signaling that investors are focusing on

getting the best price in the markets that they are working in. Paperwork automation (a.k.a

the paperless office) and a CRM frequently work together in many industries and the need

for these integrated features is evident in the data.

REHABBING

Anecdotally, many investors communicated a desire to be less hands-on with the physical

rehabbing of properties. They realize the inefficiencies of long term success if they are

the ones actually doing the rehab work. We logged a good number of responses showing

investors looking to outsource this step in the lifecycle rather than taking a more hands-on

approach.


2014 REAL ESTATE

INVESTINGREPORT

CONCLUSIONThe responses that we gathered for this report demonstrate that there are many people

who are achieving a great deal of success in real estate investing. The top 5%, 20%, and

even 50% of investors have made a significant amount of money actually doing deals. Those

who are the most successful in this industry have become so through continued education,

persistence, and a willingness to evolve. Many problems facing the least successful investors

are also facing the most successful ones. But as you climb the “success ladder” some new

constraints arise. If you are able to solve these issues then you can systematize most aspects

of the investing business. This proves that real estate investing has maybe a dozen or less

“levers” that can be optimized to get far more results with less effort.

Investors embarking on this evolutionary process will go through three distinct phases; No

system, adopting a system, and optimizing the system.

NO SYSTEM

• I had a better idea of what I was doing

• I can just get paid

• I had a magic ball, an abundance of cash reserves,

and a day or two to be lazy

• I could work smarter, not harder

• I had a well documented system for each part

of the business

• I would focus on one thing instead of the next

shiny thing

Life would be so much easier if:


2014 REAL ESTATE

INVESTINGREPORT

Working without a system is where most investors start. Success is governed by

effort, luck, and support. Investors can make a series of smart decisions and still find

themselves impacted by variables that are entirely outside of their control. Working

without a system is inefficient and risky and creates a business without a model,

which becomes impossible to scale.

The failure rate in this phase is high and few new investors have the financial capacity

to withstand mistakes. Many of these investors succumb to the fear of failing, which

frequently prevents them from moving from planning mode to execution mode. Rather

than crashing and burning, a large percentage of these investors simply never get

started.

ADOPTING A SYSTEM

Investors need to adopt a system, whether that means building their own or using a

system developed by another party. The system should create a logical sequence of

steps and a set of rules that govern the investor’s activities.

The challenge for the investor is to not only understand the steps, but to be capable

of differentiating between high and low value steps. Investors often fall into the trap

of focusing too much time on low value (albeit necessary) tasks at the expense of high

value, revenue producing actives. Left unchecked, investors find themselves focusing

on new business OR existing projects when they should be focused on new business

AND existing projects.

“Develop systems for everything, then managethose systems.”


2014 REAL ESTATE

INVESTINGREPORT

OPTIMIZING THE SYSTEM

Optimizing the system is an important step to achieving long term wealth. This

requires the investor to refine and improve each individual step. The most successful

ones will focus more on steps with higher revenue producing impact and often

delegate or outsource steps with lower financial impact. Once optimized, investors

understand how rapidly they can move through each step as well as knowing how

many deals they can move through the system simultaneously.

In addition to creating and optimizing the system, many survey respondents recognize

the need to focus the system on the right opportunities.

In closing, real estate investing has been, and will continue to be, an incredible way to

build both short term cash flow and long term wealth. The most successful investors

have done one thing well – they’ve worked at it. They’ve dedicated themselves to

becoming better and they have focused on activities that they both enjoy and are

good at while delegating the rest. They realize that they can’t possibly “do everything”

at a high level and, therefore, surround themselves with the right people and the right

resources to grow their business. Real estate investing takes commitment; you can’t

“try” it, you have to jump in with both feet and DO IT!

“Automate and delegate to compensateprofit thresholds.”


2014 REAL ESTATE

INVESTINGREPORT

INSIDE THE MIND OF THE LEADERS THESE 9 QUESTIONS WILL HELP YOU FIGURE OUTJUST HOW FAR OR CLOSE YOU ARE TO BEING ONE OF “THE LEADERS”

1) Am I marketing consistently enough (weekly or bi-weekly)?

2) Is my business “positioned” properly in my market to generate a solid stream of referrals?

3) If I had more private money would I be able to scale faster?

4) Are we using real estate agents as an effective lead generation source?

5) Am I spending too much time at my desk analyzing (comping, repairs, profit) properties?

6) Am I spending MOST or LEAST of my time in high revenue producing activities?

7) Do I have a system? IS my system good? Great? Flawed?

8) Do I honestly have written down income goals? Do I have a plan to achieve them?

9) Am I focused on my unique ability and am I building a team to focus on theirs?

REAL ESTATE - HousingWire · 2019-08-30 · Real Estate Investing Tools ... what differences...

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Transcript of REAL ESTATE - HousingWire · 2019-08-30 · Real Estate Investing Tools ... what differences...