Finding a Niche That Fits Your Style

It Can Be Simple - But it's Not Usually Easy


In a Russ Whitney CD set I have, he makes a very true statement. "Real Estate Investing is a simple process, but it's not necessarily easy to do." That might sound trite, but I have found that it's quite true.

Of course, if you look at any business process, including running a multi-billion dollar company, it can usually be described in a simple set of rules. For example, to run a large automotive company, all you have to do is:

1) Research the market to find out what vehicles and features are in demand
2) Prioritize the things you can afford to build
3) Assign the team to build them
4) Communicate the benefits to the market, via the sales channels and advertising
5) Take orders and deliver products
6) Set up customer support and sales channel support programs
7) Set up service and parts channels, and advertise their advantages
8) Do more market research to see how you are doing, and what you can do better
9) Improve the processes and repeat the cycle

If a car company can do this, they will sell a lot of cars and make a lot of money.

In real estate investing, most gurus will tell you (for free) that all you have to do is:

1) Locate motivated vendors
2) Analyze opportunities to see if the house can be bought cheaply enough, and can earn enough rent (after fixups) to carry itself "fully financed". Fully financed usually means with 90% mortgage or greater.
3) If you can hold the property long enough that it will appreciate a bit, you can usually refinance and get any down payment you made back out, and start again.

That's the super-simplified message, and it is easy to understand, but not so easy to do without spending a lot of time digging below the surface to address a lot of different issues. Those issues grow exponentially, and that's where the gurus make their money. They know you won't get far without having a "system" that tells you what to do at each decision point.

I've spent the last 5 years digging into various models and systems for making money in real estate. Each one looks promising, but the biggest problem I usually find is that, at some point, the investor has to either make tough decisions, or speak face-to-face with a seller, a buyer, a banker, a trades person, a lawyer, an accountant, or someone else. It's not that these are very difficult things to do, in theory. It's that most people are not strong negotiators, and they will hit barriers with each of these face-to-face meetings or conversations.

You have learn and practice how to deliver the message you know needs to be delivered at that time, and it has to be credible. A banker will not take you seriously, unless you have an answer to all his/her questions.

The whole thing just takes so much study and practice, that I imagine most people eventually give up, having spent thousands of dollars on guru's courses, just to learn "it wasn't for me". It's like any other job. You have to enjoy it, and it has to fit your style and strengths.

The good thing is, if you do enjoy it, you can usually find team members to compensate for your weakness. But you have to be good at some part of it, or you will be paying everybody else on your team, and nothing will be left. I've experienced that more times than I've intended.

Real estate investing is a great business to get started in part-time, because you can learn and have fun, and make money. There aren't many hobbies you can make a lot of money at. Collecting rare coins, art, stamps, etc. might pay off pretty well, but it's not as exciting.

When you tell someone you invest in real estate, it is fun to hear their comments. But it is something you have to have some passion for. One of the reasons I like the Real Estate Investment Network so much is that they make you think about what you want out of life, and your "life's vision that is so compelling that you can't help but act on it".

REIN also stands firmly on the side of integrity. You can't run any business for long when you flirt with the grey areas of the law and ethics. I can do a whole other post on whether you can run a successful business without selling your soul and and losing your integrity. I prefer to keep mine.

But you have to spend a lot of time going down paths to discover what business model fits your style. A lot of them won't be for you, and a lot of them can get you into trouble, if you don't practice good business sense.

I believe I've found a system that can work in the long term, and I can make use of all the lessons I've learned. Putting it all together to work in an area you enjoy, and for which you have lots of energy and passion, is what makes your own business style.

... Scott