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Decide and Plan for a Small Business, Entrepreneur Ideas

Advice for Starting a Real Estate Business

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Downward trends in the housing market between 2007 and 2009 caused real estate professionals to become concerned about the future of the industry. However, since real estate is a necessity for most, like food and water, some small business owners still choose to enter this industry.

Wooden house
© Josefuente | Dreamstime Stock Photos

If you’re interested in starting a real estate business as your small business idea, do a thorough analysis of the real estate industry first to prepare yourself for the various challenges you may face as well as potential opportunities.

Types of Real Estate Businesses

You have a few different options for starting up a real estate business. Some people start as real estate investors or “flippers.” A real estate investor purchases properties with the intention of fixing them up and reselling them (or becoming a landlord) at a profit. You can also establish your own real estate agency (franchise, independent operation, or partnership), which requires a real estate license and training. Real estate mortgage brokers (professionals who work with big lenders) and construction professionals are also important role-players in the real estate business.

Home Prices and Home Sales

According to a 2009 study by Altos Research home prices dropped in 20 major U.S. cities, which in turn helped increase demand for homes. Michael Simonsen, chief executive of Altos Research confirmed this trend saying, “The percent of homes on the market with price reductions is a really insightful indicator of organic levels of demand.”

Despite unfavorable economic news regarding the real estate market in 2008 and 2009, including an increase in foreclosures and home debts that exceed the value, Plunkett Research estimates that existing home sales increased from 4.69 million in 2009 to 5.02 million in 2010.

This news is an indication that someone going into the real estate business post-2009 will likely have plenty of opportunities to make money. An increase in home sales and demand is good news for everyone in the real estate business, from investors and to brokers.

Trends in the Real Estate Business

Plunkett Research reveals that the popularity of the Internet will likely change the real estate industry significantly. Traditional residential brokers may not be able to compete with internet-based real estate operations. This puts a spotlight on the importance of establishing an internet presence as a real estate business owner, including social media and web blogs. Plunkett also recognizes a trend in “green” (environmentally friendly) buildings and smaller homes as opposed to “McMansions.” These are all important points to consider as you navigate any level of the real estate business, from construction to selling.

Innovative Solutions

When the real estate business is slow, as it was after the housing market crashed in 2007, small business owners sometimes find success through creativity. For instance, Kevin Lisota and Shannon Ressler of Findwell, an online real estate company, found success by holding seminars and taking advantage of social networking websites. In an article published in the Puget Sound Business Journal Ressler states, “We’re finding that giving away free advice is working for us.”

If you’re interested in starting a real estate business, it’s crucial that you stay updated on the various trends and news about the industry to ensure long-term success. Subscribe to real estate newsletters, journals and magazines. Also, follow plenty of other real estate entrepreneurs on social media, including Twitter, Google Plus and LinkedIn, to stay in the loop and always be prepared for new opportunities.

 

Sources:

msnbc.msn.com/id/32970895/ns/business-forbescom/

plunkettresearch.com/Industries/RealEstateConstruction/RealEstateConstructionStatistics/tabid/278/Default.aspx

businesswire.com/portal/site/home/permalink/?ndmViewId=news_view&newsId=20100519007025&newsLang=en

seattle.bizjournals.com/seattle/stories/2009/02/16/smallb2.html

work.com/starting-a-real-estate-business-742/

 



Starting up a small business, even if it's just on the side, is no longer an option -- it's a necessity. Why? Because everyone needs an additional source of income in our new economy. Click here to sign up for educational and motivational posts to keep you on track.

Business Plan Outline, Decide and Plan for a Small Business, Entrepreneur Ideas, Lead Generation

3 Tips to Win As a Real Estate Investor

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Going into the real estate business as an investor definitely is no piece of cake—it takes an immense amount of patience and hard work to find success. You need three important skills to win as a real estate investor: a business plan, a bold attitude, and a reliable source of information that the general public doesn’t know about happenings in the real estate market.

Wooden house
© Josefuente | Dreamstime Stock Photos

Business Plan

Before you make any move that requires a financial investment or contractual commitment on your part, draw up a business plan that outlines all of your intentions. Start with your goals—what do you wish to accomplish in the next three to five years? How do you plan to achieve those goals? What kind of budget do you have and how do you plan to raise the needed funds to buy properties? Get it all down on paper before you start making decisions and signing agreements.

A Bold Attitude

When working as a real estate investor, you are going to have to deal with a number of different parties including contractors, agents and potential renters or buyers. You definitely can’t be afraid to boldly request what you need and want from them if you are to do business.

If you plan to pursue a career in real estate investing, you can’t be a person who is afraid to say “no” or who cares too much about what people will think of you if you challenge them. What matters first and foremost is that you get things accomplished in the most economical and efficient manner possible so that it’s consistent with your business plan. Contractors and carpenters will try to put you on the backburner and charge you for unexpected extras. Agents will try to convince you to agree to terms that may not vibe with your business plan. Potential renters will try to get away with not paying you rent if you let them. Be bold and set your foot down early on to let these different parties know that you mean business. When you find service providers who are reliable and efficient, value them and treat them right.

Inside Information

Many people jump into real estate investing without doing any research. Before you buy your first property, pick up a library of books on the subject. This will teach you what other first-timers have learned so that you can avoid making the same mistakes that they did. Next, invest in journals and subscriptions that will update you on what’s going on in the real estate market in your area before the average man on the street. For instance, you should know in advance if a new major business is planning to build in an area that might attract higher rents or home values in the future.

Also, find a mentor if you can (you might be able to find one using the SBA’s database). Find someone who has experience in real estate investing so that he can provide you with insight into the business. However, be sure that you pick a mentor that is respectable and has good character.

If you want to win as a real estate investor, you have to be willing to invest time and planning as well as money into your venture. Stay positive and on top of new developments in the real estate market if you want to find success buying and selling or renting properties.



Starting up a small business, even if it's just on the side, is no longer an option -- it's a necessity. Why? Because everyone needs an additional source of income in our new economy. Click here to sign up for educational and motivational posts to keep you on track.