Investing in real estate has exploded in recent years. You can turn on your TV almost any night and watch a show on house flipping or rehabbing. This popularity has also spilled over into most local markets. One of the most common complaints from new investors is that their market is too competitive. While this may be the case there are ways to combat it. Entering a competitive market only means that there plenty of deals to go around. Here are a handful of strategies and ideas that can help penetrate even the most competitive markets.
- Know Your Competition. As you get started in real estate it is important that you know your competition. Take a look at what kinds of deals are being closed in your market. Is there an abundance of short sales and foreclosures? Is your market ripe with condominiums, mobile homes and other specialized properties? Whatever the niche you don’t want to get swallowed up in it. Foreclosure investing may have been the reason you become interested in investing but you need to create your own niche. Regardless of the industry the most successful companies either excel at their field or find an alternative way to generate sales. Investing in real estate is no different. If there are ten investors all after the same property it makes more sense to look at areas that are less competitive. This could mean looking for different property types or exploring different markets. If you are determined to stay in your market you need to know why certain investors are successful. Look at where they get their deals from and the quality of the finished product. By studying your competition you can get a good idea of how and where you want your business to go.
- Value Added Networking. Penetrating a market often takes a solid team around you. To build your team you need to network. There is a misconception that all networking is the same. Meeting new people and gathering business cards is nice but that may not do much to help grow your business. When you network you should put yourself in other people’s shoes. Ask yourself what reason you are giving someone to work with you. By focusing on what value you add to the relationship you will build a much stronger networking base. A real estate agent may have five other investors they can turn to with a foreclosure. What makes you and the way you operate different? The same thought process should be applied with every new person you meet. If you have something that benefits them or makes their job that much easier you are sure to be remembered. If you stick with this networking approach eventually you will be given an opportunity. From there it is up to you to perform. When you do you will be thought of the next time they have a deal and you now have someone you can build your business with.
- Focused Marketing. When you are trying to break into a field or penetrate a market how you promote your business is essential. There is a natural instinct to pick any type of marketing and run with it. This is a recipe for disaster. Think about how many letters are being sent to local homeowners in foreclosure. Unless your letter truly stands out it will probably be disregarded. One of the great things about investing in real estate is that you can run your business any way you like. Your marketing can be totally unique and exclusive to you. If you want to focus strictly on digital marketing you can run with it. If you have capital for billboards and radio ads you can try this approach. Whatever you do you need to make sure you are focused in your approach. This means you need to know who your target market is and what your goals are. Market to deals and properties that you really want. The better you are at marketing the more deals will come your way.
- Think Big Picture. In a perfect world you will be able to find home run deals as soon as you enter the business. A much more realistic scenario is that you will have to build your way to that point. There may be times when you have to entertain deals where the profit margins are smaller than you would like. Your time is always worth money but this may be a good way to get going. Not only are you still making money but on every deal there are multiple contacts. Between two real estate agents, an attorney and possibly a mortgage broker there can be up to five potential contacts per deal. This doesn’t include the seller and anyone else that pops up during the process. Closing a few smaller deals can get you noticed and lead to much bigger ones down the road. You never know if someone involved in a deal knows someone that can be a perfect fit for your business. As you build your real estate empire you may have to make some sacrifices along the way.
Entering a competitive market can be difficult but it is far from impossible. The most important thing is not to get frustrated and to stay the course. If you are consistent eventually you will break through. When you do it will be worth all of the hard work and sacrifice.
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