Real estate, tech and entrepreneurial investors each represent trends gaining traction. In particular, real estate investors who know how to leverage technology understand what it takes to get ahead. However, while real estate investing might offer rapid wealth building and a great income, and entrepreneurship more freedom, there are some important considerations to recognize before leaping. Real estate investors should take the following into consideration:
Real estate start-ups are hot, especially tech based start-ups. However, far too many of these are being attempted with little to no market research or understanding of the real estate industry. This is leading to numerous fails after attempts to reinvent the wheel or failing to understand how the business works and why. Plenty of real estate investors have made millions without a college degree, but investing in some form of real estate education is absolutely critical for success.
2. Planning Vs. Action
When will you stop planning and start taking action? Planning is good. Often an hour in planning and honing a business plan can save thousands of dollars and time. However, at some point, perfecting something that will never be perfect vs adapting on the fly becomes counterproductive. You’ve got to know when to leap. If you don’t have a launch date, the most important thing to do after reading this is to lay out a hard timeline for getting going and commit to a live date regardless of whether you think it is perfect or not.
3. Plan on being Flexible
One of the biggest small business killers today is hammering on just because something was in the business plan. There are absolutely factors and parts of real estate investing systems which should be stuck to day after day and which will only work with consistency and repetition. There are other factors and tactics, however, which if stuck to are just futile wastes of time. Technology and trends are changing so fast that specific tactics can be completely irrelevant in 6 months or 6 hours. If there is one thing to be certain of, it is change. The only way to prevent it from sabotaging you is to embrace change and flexibility. Those that are the most agile will have a tremendous advantage over the competition.
4. Be Clear About Goals [and Expectations]
There is always a lot of talk about managing consumers’ expectations, but who is managing yours? Know your goals. Think big, but be realistic about your expectations. What are you most important goals? What’s it going to really take to achieve them?
5. You Might Not Be the Best Person to Manage Your Real Estate Business
It was recently highlighted that Zynga’s founder was leaving the company. Many other serial entrepreneurs have left their wildly profitable and popular start-ups and moved on. Even Richard Branson has moved from one mission to the next. It can take quite a different personality to be great at starting things than managing them. Those burning with entrepreneurial spirit are rarely also blessed with the patience and love for the details of ongoing daily management year after year. There is nothing wrong with this. Just recognize where your strengths and passions are. Plan for the day you’ll want someone else to manage while you expand.
6. You Probably Don’t Need More Money
Start-up incubator and financier Y Combinator recently announced it cut back on the amount it wants start-ups to be funded, even from outside parties. After a certain point, Y Combinator reports money becomes more of a burden and problem than a benefit. It causes partnership fights, and can sap traction and innovation rather than help. It probably takes a lot less to really get started in real estate investing than you imagine.
