As I write this, the summer Olympic Games are going on in Rio. And as I watch the competition, I can’t help correlating the Games to my life as a real estate investor in Dallas, Texas. At the Olympics, we see the top athletes from around the world competing at the highest level of their abilities, against the highest level of competition they will probably ever face in their entire careers. No matter how accomplished they are as athletes, it is their level of preparation that determines their success—or lack of it—in that competition.
It reminds me so much of what we are seeing today in the residential real estate markets across the U.S. Many investors, including myself, are seeing levels of competition among investors we’ve never seen before. The housing markets are booming all over the country—metropolitan markets, rural markets, big markets and small markets. The number of investors in the marketplace is at an all-time high. And whether you’re looking for single-family homes or multifamily condos, the inventory levels are at all-time lows.
It’s very much comparable to an Olympic competition where you’re competing amongst some of the best and you’re competing at some of the highest levels to succeed. I look at the level of preparation some of these Olympians have gone through, and I think about what it takes today for a real estate investor to prepare himself or herself to compete successfully in markets that are so competitive, so hot and so tight.
What I see are three key differentiators that will enable a real estate investor to elevate himself or herself above the rest in order to compete at the highest level possible, much like what our Olympians are doing right now in Rio.
Differentiator No. 1: Branding
Branding is what is going to separate you, as a real estate investor, from the pack. That’s what will put you out in front, just as we see with these Olympic swimmers as they shoot out in the pool, lead and separate themselves from the pack to ultimately win these various swimming events.
I am not sure why, but many investors fail at creating a brand. Maybe that’s because they fail to realize they are running a business and need to position themselves as a business in front of their customers, clients and peers in order to be successful.
You cannot afford to disregard your brand as a real estate investor. Your brand is your reputation. And your reputation—in real estate investing, as in any form of business—is key.
Your brand is what differentiates you from other investors and your competitors. It also differentiates you in the eyes of the consumers who are the home sellers, distressed sellers, people who are ready to sell their homes for cash, as-is or off-market in the wholesale market.
In my case, I own a HomeVestors business in Dallas, and the reason I purchased that franchise was the brand. As I built my business, I realized I didn’t have the competence, the skills or the desire to create and build a brand, nor did I want to take the time to do so. I purchased a franchise to have an instant brand.
The HomeVestors brand is a powerful, nationally recognized brand with the largest amount of home buyers in the U.S. Each and every day I enjoy the benefits of that brand as a franchisee. And this is not an attempt to sell or promote HomeVestors, but rather it’s how I want to make the point of the importance of branding.
It was so important to me, as an investor, that I purchased the franchise and made a significant investment in the franchise so I could leverage an existing and powerful brand. It’s truly made a difference in my business.
Now, many of you aren’t going to purchase a franchise, but instead will choose to create your own brand, and that’s great. But make sure you stand out with your brand and differentiate yourself as a result of your brand.
That means every letter you send should highlight your brand and personally resonate with your target audience. Your website has to grab the attention of those distressed sellers out there and capture their confidence. Every postcard you send has to differentiate you from the rest so yours doesn’t look like every other postcard they received that week or that day. If your door hangers don’t stand out, guess what? They’re going straight into the trash. Every flier you produce for the property you wholesale or the properties you rent has to scream your brand and scream the confidence your brand is designed to foster.
Differentiator No. 2: Marketing
We’ve talked about the importance of marketing time and time again. The marketing for your real estate investment business does the heavy lifting, and it’s what holds your business up and supports it, like those power lifters we see in Rio. Your marketing does exactly the same for your business—not only does it lift it up, it holds it and supports it. This way you can sustain a level of quality, a level of volume and a level of profit that meet your goals and objectives.
And just as with lifting weights, you can never stop marketing. If you’re training as a power lifter, you can never stop lifting or you’re going to lose your strength. It’s the same for your real estate investing business. The week, day or month we stop marketing our business, we lose strength. The leads stop coming in. And then we’ve got to market more.
I stress you can never stop marketing as a real estate investor because you are going to lose that strength and your business is going to falter and drop off or fail.
Marketing is your strength. The level you need is defined by the number of leads you need, which is defined by the number of buys you want to make in order to ultimately make your business objectives.
The key here is you must understand how many buys you want to make in a given year for your business. How many leads does that mean you have to generate in order to achieve the number of buys you need? Then, how much marketing and in what form do you need in order to consistently generate those leads, to consistently generate those buys, to consistently generate those results?
Marketing is key, and even more important is consistent marketing.
Differentiator No. 3: Execution
The execution component, I have seen, is another thing that differentiates successful real estate investors from their competition. It enables them to compete at their highest possible level and ultimately win.
As we look at the Olympics as an analogy once again, we as real estate investors are performing at the highest possible level in one of the most competitive environments we’ve ever experienced. We’ve got to have execution that performs at a perfect 10—just like those gymnasts we see in Rio. We’ve got to have a flawless plan as investors in order to elevate us above our competition, those other investors who are trying to purchase the same homes that we are trying to buy.
Obsessing with flawless execution is ultimately what’s going to create your reputation and support your brand. It’s going to earn you the right to compete again.
When you execute flawlessly, it sets you up. Your sellers will refer you to their friends, families and acquaintances who are also trying to sell properties. And they’re going to refer you based on your level of execution and what they experienced when you worked with them on the purchase of their home.
This also applies to landlords. When you’re a great landlord who does what you say you’ll do and you maintain safe, affordable, clean housing, that’s all part of your execution as an investor. Your tenants will stick around. They’re going to refer you to their friends, family, neighbors and acquaintances.
Keep in mind that your execution, just like that of an Olympic gymnast, has to be clean and flawless. As an investor, you should immediately respond to every lead who contacts you with an interest in selling his or her home. You can’t wait 24 hours or until the following day to return their calls, answer their emails or respond to their website inquiries.
If you’re not picking up the phone immediately when they call, then you need to be returning their call within the next 30 minutes in order to capture the lead and engage them. Otherwise, they’re going to move on to your competition.
When you get to their living room or get to their house, you have to have a contract in hand—a legitimate and comprehensive legal contract you can execute flawlessly right there when they decide they want to sell to you. You have to have a title company that backs you up and which executes flawlessly, correctly and legally when it comes to the title work to facilitate the sale. You have to have funding, you have to be a communicator, and you have to do things when you say you’re going to do them.
Just as in the Olympics, the competition in real estate investing is at an all-time high and if you’re not competing at the level that puts you at the top of your game or you’re not performing at your highest level, then it is time for you to “up” your game.
To become a real estate investing Olympian, you must energize your brand, strengthen your marketing and perfect your execution so you can compete at your own highest level.
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About the Author
Kevin Guz is a Dallas, Texas-based residential real estate investor with more than 10 years of investing experience. He owns a HomeVestors (or “We Buy Ugly Houses”) franchise as well as the Clear Key companies, which focus on residential real estate wholesaling, rental property management and self-storage leasing. He also is a licensed real estate agent in the state of Texas. He enjoys sharing his ongoing personal experiences, perspectives and learnings from his start as a part-time or “weekend investor” and full-time corporate professional through his ultimate transition to a full-time real estate investor and business owner. You can listen to his podcasts at www.blogtalkradio.com/kevinguz.