Being in the trenches as a full-time investor since 2003, I’ve learned a thing or two about growing an investing business. I’ve done a lot of things right… and have made my fair share of mistakes along the way.
Hey Moguls, Patrick Riddle here, and below is a list of 11 tips that will help you build your business faster and easier… while avoiding many of the common pitfalls that plague investors.
Hop to it…
1) Do What Experienced Investors Tell You to Do
I remember the first real estate boot camp I attended where my mentor said:
“The biggest mistake you can make is not doing exactly what I say.”
Believe it, folks.
I remember another time when one of my students was having trouble getting private money and asked if I’d hop on the phone with him. After just 3 minutes of asking him a few questions, it was clear why he wasn’t getting any private money…
He wasn’t following the process we teach in the program. He was doing things his way… and had nothing to show for it.
After recommitting to our proven process, fast-forward to today and he’s gotten millions in private money.
2) Join a Mastermind Group
In Napoleon Hill’s classic, Think & Grow Rich, he defined the ‘Mastermind Principle’ as:
“Coordination of knowledge and effort, in a spirit of harmony, between two or more people, for the attainment of a definite purpose.”
Basically, a Mastermind group is a circle of like-minded individuals who you meet with regularly to brainstorm, share ideas, what’s working, where you’re having issues and need help, and so on.
One of the Mastermind groups I’m in meets quarterly in person. We have 4 members (all biz owners) – a publisher, an attorney, a musician,\ and myself. We do whatever we can, to help each other move our businesses forward.
3) Get Everything in Writing
With your business partners, investors, contractors, tenants… everyone you do business with, write down the terms of your agreement!
If there’s someone who you’re doing business with right now on a handshake, I urge you to get it in writing ASAP!
You infinitely improve your chance of building long-term relationships by adhering to this often ignored nugget of wisdom.
4) Hire a Good Bookkeeper and/or Accountant
For most entrepreneurs and investors, the “books” often get ignored, procrastinated on, even forgotten… until they’re an absolute mess. Don’t let that happen to you!
The best way to find a good bookkeeper and/or accountant, from my experience, is by referral. Ask a local investor in your niche who they use. So if you’re a wholesaler, ask an experienced wholesaler for a referral.
This team member is worth its weight in gold.
5) You are NOT the Owner . . . You Work for the Owner
To put yourself in the best negotiating position with a seller, or tenant, or contractor, you are not the owner, you simply “work for the owner.”
Why?
Because if you’re the final decision-maker, people will appeal to your emotions in the negotiation… and there’s no room in this business for becoming emotionally involved with a property or person’s situation.
6) Have Multiple Exit Strategies
Do NOT enter a deal if you only have 1 way out!
Why do you think so many of the speculators who bought preconstruction deals before the market crashed lost their investments to foreclosure?
They banked on 1 thing and 1 thing only…appreciation! When that exit strategy vanished, so did their investment.
7) Negotiate Seller Financing
Negotiating seller financing can add tremendous value to a deal… especially if you get great teams.
As long as you are working with a motivated seller, this should be your reality in every deal you do.
Give a little on price when it makes sense to get the terms you want. Most investors spend all their time negotiating on price, when the terms of the negotiation can make all the difference.
8) Get “The Stuff” Thrown In
One of our students was negotiating a large package deal. The sellers were highly motivated and ready to dump these properties. After he told me about the deal, I suggested he ask the sellers if they had anything else that they wanted to get rid of… furniture, cars, boats…
…and guess what?
The student got two Harley Roadsters thrown into the deal!
9) Protect Deals While Under Contract
If you’re not protecting your deals while they’re under contract, it is not a matter of whether or not you will lose a deal to another investor, it’s a matter of when.
How do you protect your deals?
Here’s an example…
We put a contract on a property in West Ashley, SC… but a few days later, the seller wouldn’t call us back. We feared that another investor came along and offered her more… and come to find out, we were right.
But, we had filed a “Notice of Purchase and Sale” on public record to protect our interest. And when the other investor tried to snatch the deal out from under us, we popped up on his title search and he couldn’t close.
10) Delegate Intelligently
When you delegate things in your business, whether it’s something that you don’t know how to do yourself or something you just don’t like doing, learn as much as you can about the thing being delegated.
You don’t have to be an expert at it, but know what goes into it, the process, etc.
11) Don’t Quit Your Day Job… Yet
Relying on monetizing your real estate deals for your ONLY source of income (especially if you’re new to REI) can be a bit challenging.
Establish a good income outside of real estate investing first, build up your cash reserves and your experience as an investor… then consider quitting your J. O. B. to play the real estate investing game full time.
Follow this sage advice, and you’ll be good to go. Happy investing!
Got Any More?
What other tips do you have for creating and running a successful investing business? Share below.
Get a mentor and do what they say!
Make sure you get everything in writing – always – and protect your deals with a Notice of Purchase and Sale.
Hire a qualified bookkeeper or accountant.
Delegate the tasks that you don’t like doing or take time away from you making and closing deals.