Years after my investing career began with manufactured homes and to a lesser extent single family homes, I was still under the impression that as a real estate investor not only do we have to know all aspects of our craft but we also have to be masters of all the areas of investing at every given moment. I learned years later I was incorrect.
In reality a successful and happy real estate investor can become so by only truly mastering just a few aspects of his or her real estate investing scope-of-duties. Allow me to clarify and hopefully bring some ease to your investing business.
As investors we ideally should know every step needed from start to finish with regards to properly investing in the types of real estate that excite us. A common expression that you must perform multiple duties is to “wear multiple hats” with regards to real estate investing.
While it is vitally important to have an understanding of each task needed you will not need to become an expert in every area. In fact your personality-type and natural propensity for handing situations may actually hurt certain areas of your business.
- Are you a people person?
- Can you estimate repairs?
- Do you consider yourself patient?
- Do you understand number well?
Let's break real estate investing down into areas of importance. Speaking only to investors that are not passive; your duties can be looked at as green for most important and red for least important. I use the word “important” to describe tasks that must be handled with the most care and skill. Ideally many investor would choose to handle these cash-producing tasks themselves.
While almost every area of your investing business can be outsourced keep in mind that the list below is designed for the average investor that has little money to hire multiple employees and/or does not wish to partner with multiple parties to close deals. Instead the list below is an outline of the tasks which require the most care (in green) and those task which simply need to get done effectively (in red).
Tasks to Outsource:
- Making repairs to your properties.
- Estimating repairs to potential investments.
- Managing your properties and serving notices.
- Finding and attracting new leads.
- Orchestrating the closing and closing of the property
- Implementing and carrying out the marketing and advertising of your business to buyers and sellers. I.e. Mailing letters, hanging signs, online and offline marketing, news print ads
- Showing homes to potential buyers.
- Pre-screening sellers and buyers over the phone.
- Meeting with buyers face to face.
Tasks to Complete Yourself:
- Brain storming advertising methods and game-plans
- Raising private money
- Networking with other investors and park managers
- Building rapport with sellers on face-to-face appointments.
- Creating purchase offers.
- Delivering purchase offers to sellers, following up with these same sellers, and negotiating directly with sellers (assuming no Realtor is involved).
As you can see the most important tasks are the ones that require you put your face out to the public or the tasks which require the deal-structuring of a property up until the point the home is under contract to purchase.
Please note that if you are simply a capital investor that spends money and credit to buy properties you will be able to outsource almost every aspects of your business. Indeed everyone is unique and the goal of this article is to inform you that options to outsource your least favorite tasks are available.