Your Highest And Best Use Of Time
Whether you are building a real estate empire or buying a couple of rental properties, you are essentially running a business. For most people starting out, you are the CEO, janitor, and everything in between. You’re responsible for acquisitions, underwriting, property management, financing, bookkeeping, hiring contractors, and what seems like a hundred other things. Eventually, for some, you start to build a team and outsource these things, like hiring a real estate CPA, property manager, bookkeeper, etc.
I’m sure you’ve heard the phrase “time is money” before. Yes, this is true. Your time is valuable. The question is, just how valuable? If you are constantly in the weeds of your business, mowing the lawns of your rental properties, chasing down tenants late rent, etc., then you aren’t using your time to it’s highest and best use.
As the CEO to your real estate business, your job essentially comes down to two things: finding deals and raising money. It’s that simple. Everything else is a distraction. Unless you are the best carpenter around, or the best plumber, etc. then you shouldn’t be spending your time doing those tasks. And even if you are the best carpenter in your market, ask yourself if are you trying to build a plumbing business or a real estate business. It’s important to work on your business, and not in your business. If you are working in your business, that is a job.
Finding deals and raising money can be a bit like the chicken and the egg. Which comes first?
Finding Great Deals
The name of the game in real estate is finding great deals. You’ve heard that if you have a great deal, the money will follow. Especially as value-add investors, finding distressed properties or owners is a great way to find deals. Distressed deals can mean a few things. The owner can be in distress, either personally or financially, the property can be in distress or a combination of both.
Financial Distress describes the owner more so than the property. People go through hardships from time to time, losing their jobs, relocating, or a number of other hardships. As a real estate investor, you have the knowledge and capability to help people out in certain situations. This is much different than taking advantage of someone. The key difference in helping out a financially distressed homeowner or investor versus taking advantage of someone is both parties benefit when you help. Let’s look at some ways you can search out people in financial distress.
- Foreclosure Auctions
- Bank Owned
- Tax Foreclosures
Life happens. Sometimes that’s good, and other times it’s not so good. People fall into personal distress for many different reasons. Family, work, moving, divorce, and even death are reasons people might face personal distress.
- Absentee owners
When seeking out deals you are looking for distressed properties just as much as distressed sellers. Distressed properties can provide opportunities for you to add value to the property and do a number of different things with – like flipping, BRRRR, wholesale, etc. Typically a distressed property is in poor condition. You can look at a property like this and usually tell that it is run down, vacant, or just not being maintained as it should. If you aren’t in the area to be able to drive the neighborhood (drive for dollars), then you can also search online for city or country code violations.
- Code violations
- Vacant/run down properties
- Driving for dollars
These are just a few of the many criteria that you could look for when searching for distressed properties and owners. Two great resources I’ve found helpful in searching for public records and data are:
Listsource is a great source for… well, building lists. You can search for hundreds of different parameters to build targetted lists in your markets. With these lists, you can send mail to homeowners and offer to help them out, however you can – often by buying their house.
Foreclosure.com is another great resource that focuses on foreclosures, preforeclosures, and REO properties.
Getting Stuck In The Weeds
Starting out, it can be hard to not get drug into the weeds. Especially if you are self-managing your property. I totally understand this. But as soon as you can, start building systems and processes that help you automate and outsource things. Drive your business from the 30,000 ft. view and focus on growth. You owe it to yourself and those around you to be as successful as you possibly can. Help out others along the way. Treat people how you want to be treated. Do these things, and you’ll have a hard time not achieving everything you can possibly want.
Visit Audible for a free trial and free audiobook download!