Five P’s: Preparation, people, presentation, private money, and persistence.
Preparation
- Self-examination: find out what you’re getting yourself into. Maybe the lifestyle isn’t for you. Don’t waste your own time.
- Self-learning: Knowledge is power. Read, watch videos, listen to podcasts – do everything you can to understand the business.
- Word choice: Learn real estate terminology, learn words to use (“profit”, “ROI”), learn words to avoid (“guaranteed”, “risk-free”).
- Basic legal issues: learn how to stay out of trouble when it comes to deeds, liens, disclosures, advertising across state lines, etc.
- Online research: fastest way to get general answers, best way to learn about thought leaders in real estate investing
People
- You’re preparing to talk to peers and colleagues, where mistakes and missteps are a lot less critical.
- Networking: getting to know you, “it’s who you know”, learning to speak to strangers, finding common ground
- Real estate investment clubs: talking to established pros, developing business relationships and contacts, laying the groundwork for referrals
- Active learning: learning to discuss what you’ve read on your own
- Online participation: easiest way to communicate with like-minded people, fastest way to get specific answers, best way to learn from thought leaders
Presentation
- Now you’re using your newfound knowledge to talk to clients.
- Brands and niches: What do you want to be known for? What do you want your business to look like – sole proprietor or big company? What’s your specialty – flips, landlording, wholesaling?
- Scripts: Develop a unique selling proposition (USP) and customize elevator speeches for different occasions.
- Marketing materials: using branded business cards, letterhead, brochures, websites, bandit signs, direct mail, and other things to promote your business.
- Credibility kit: List realtor experience, business experience, personal finance management – anything with a professionally impressive (and preferably provable) track record.
- Keep it relevant: stay on message.
- Now you have something to promote. “If you build it, they will come.” If you lay the groundwork well, you’ll make it easier for the money to find you.
Private money
- You know the basics, you’ve made your connections, and you’ve learned to speak to them. Now speak with authority and intelligence to the people who can finance your deals.
- Understand cash flow and documentation of specific types of deals (short-term, long-term)
- Private lenders will loan based on the potential of the house. Have realistic numbers and comps ready.
- Equity partners will loan based on a percentage of the profits. With no money, be prepared to offer sweat equity.
- Sell them on the deal: show them you’ve done your homework and focus on what’s in it for them.
Persistence
- You will not learn everything during your first month – not even during your first year. Be patient with yourself.
- Adjust plans as you go – deals aren’t always predictable. Flexibility and creativity keep you thinking on your feet. Stubbornness and negativity hold you back.
- Remind yourself that nothing worthwhile is easy. If you want something, you have to work for it – preferably with a positive, optimistic attitude!
- The one thing you don’t quit is your day job – not just yet, anyway. Use this as a side gig at first and let the job build savings to put into your deals.
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