Real estate investment is one of the most lucrative ways to make money, especially if you learn the art of flipping properties. Yes, it is an art—and one that can make you wealthy if you learn how to make the right choices.
Investors Are Business Owners
The most important thing to remember is unless you have an unlimited flow of capital and you’re in the game for fun, you’re in the investment business. You’re an entrepreneur and as many have noticed in recent years, there’s no better time to be in business for yourself. Congratulations.
As a business owner, there are two crucial elements to your success. The first is a business plan and the second, a marketing plan. This might sound like a little more than you bargained for—you may just want to buy and sell property quickly and for a profit. You still need a business plan, even if it’s a single page.
What’s a Business Plan?
A business plan is a road map for your business. After you’ve stocked up on tools, and before you get on the road, your first leg of the journey is to identify what you want out of your business and where you want to go with it:
1. Your Vision
This gives you a birds-eye view of your investment business.
- What does it look like?
- Who will be involved?
- Where are you going with it?
2. Your Mission
What do you hope to accomplish through your business?
- For Yourself?
- For Others?
Having a clear picture of what you want and why will help you determine the steps needed to execute your plan. Two of those steps will be determining a business budget and marketing budget.
Your Business Budget
Are you jumping in with both feet and funding your business on your own or partnering with an investor? Deciding which way to go will help determine the amount of funding you’ll allocate to running your business. One area you’ll fund is marketing.
What is Marketing?
More specifically—what is marketing as it relates to building a real estate investment business? Marketing is the vehicle that carries your concept (products or services) to the consumer. As an investor, you’ll be involved with marketing from several slants. All are important.
Marketing is an Investment
Marketing isn’t a frivolous expenditure. It’s an investment in the growth of your business and directly linked to revenue generation. This doesn’t mean you’ll spend just to spend. Successful investors don’t open their wallets mindlessly, and they don’t waste money. They set a marketing budget and more importantly, they stick to it.
Knowing how much you have to spend is part of the equation. The second part is learning how to be most efficient with your spending. As your business grows, you’re going to come across a lot of good deals—once-in-a-lifetime deals—and defining parameters will help you make the best decisions.
Your first marketing angle will be marketing your business to the property owner; the motivated seller. Once you set a budget your marketing plan will help you do that.
When creating a marketing budget, you’ll be considering two major factors and they both begin with HOW:
- How much are you able and/or willing to allocate toward marketing efforts?
Marketing your investment business to the public
Marketing properties for resale
- How do you want to market?
With the help of your marketing budget, you’ll determine how much each of the above will cost and measure it against how much you can afford to spend. A marketing budget is as good as the discipline it takes to follow it. There are good reasons for doing so; the most important of which is this: as an investor, liquid working capital is without question an asset to your success. If you overspend your business budget or marketing budget, you’ll have less money to invest when that once-in-a-lifetime deal comes your way. Set your budget and stick to it. Don’t risk having to wave good-bye because your pockets are empty!
Strategic marketing begins with mindset. Always set aside money for marketing. You can’t grow your investment business if prospects don’t know you exist.