How to use strategic partnerships to complement — not improve — your weaknesses.
The latest Hollywood superhero series The Avengers featuring Spiderman, Captain America, Iron Man, the Hulk, Black Panther, and others has created and revived legions of fans as new and fascinating stories are told about these characters. What is the secret to success for superheroes? How do they remain relevant for generations through changing times and different media? The enduring success of superheroes is mainly due to storylines and detailed character development that reveals the specific powers of each superhero juxtaposed to the vulnerability and weaknesses that can destroy them.
Like superheroes, real estate investors need only one superpower to survive, thrive, and remain relevant through changing times. Superheroes are exceptional at just one or two things, they know what those things are and they fully exploit their strengths. New and experienced investors should routinely do a self-assessment to determine their strengths and weaknesses. Your self-assessment should start with these four categories:
- Capital / Cash to invest
- Credit to invest
- Time to invest
- Experience to invest
Capital / Cash to Invest
Many people think real estate investing can be done with no money down because many infomercials and atypical case studies are assumed to be the norm in real estate. However, it is essential to have some cash and capital to invest in properties and in marketing to build your real estate investing business. It does not have to be your cash and capital, but it has to be someone’s.
Credit to Invest
What is your personal credit situation? When you are investing in real estate, it is inevitable you utilize credit at some point. Most commonly, credit is used to finance the purchase of a property. If your credit is not good, you may consider using a credit partner to finance your purchases or simply pursue strategies that do not require credit checks, like wholesaling.
Time to Invest
You are going to have to leverage either your time or someone else’s time to actively or passively invest in real estate. This business requires time to find deals, evaluate deals, put deals together with the right financing, manage the contractors, and manage all other aspects of your real estate business. The amount of time you are willing to invest in your real estate business dictates the specific strategies you should pursue.
Experience to Invest
Do you have the experience to find deals? Fund deals? Fix distressed properties as a rental or for resale? Flip properties to a buyer or tenant? Raise money? Identifying what skills and resources you have and what you enjoy doing will also help you to discover and harness your superpowers.
The problem most new and experienced investors make is they try to be experts at everything. That is like Iron Man trying to make a web! Identify your strongest strength and your biggest weakness from the categories above. Focus on making your strength a superpower instead of trying to improve your weaknesses.
Form a super-team. Find strategic partner(s) with superpowers that complement your weaknesses. This will fast-track the growth of your business.
I have spoken to hundreds of new and experienced investors at my Deals Meetup and the most common reasons investors give for not starting or growing their businesses…
“I can’t find good deals.”
“I don’t have enough capital.”
I have seen people attend real estate meetings for years and never start investing because they try to do everything and wind up doing nothing. One strategy that can help investors is to take advantage of others’ expertise to find hot off-market deals and an existing cash-buyers network to fund or purchase the deals.
At the 2018 Think Realty Baltimore Expo, Ana attended our Sunday Deal Mastery workshop and bus tour focused on finding hot off-market deals. Ana had been a real estate agent for over 10 years and had developed a negotiating expertise. She was tired of doing traditional realty and wanted to become an investor, specifically a wholesaler. Before attending our workshop, she spent thousands of dollars marketing online trying to get good leads with limited success. Ana quickly realized it is very difficult to find good investment deals.
Instead of spending tens of thousands of dollars making mistakes trying to improve her marketing skills, Ana leveraged our Deal Finders program as a strategic partner for her business. Deal Finders did the heavy-lifting to find and qualify hot off-market seller leads so Ana was able to fully exploit her superpower by spending most of her time negotiating deals with motivated sellers.
Here’s how Ana negotiated her first wholesale deal six days after the workshop:
- Ana partnered with Deal Finders.
- Deal Finders sent Ana motivated seller leads.
- Ana negotiated deal with Deal Finders support.
- Deal Finders found the fix & flip rehab buyer.
- Ana split the $14,500 wholesale fee 50/50.
Ana went on to generate over $100,000 in wholesale fees in her first year negotiating deals from Deal Finders’ leads. What are your strengths? What are your weaknesses? There are superheroes out here willing and able to partner with you.