Realistically, there are more than four tools to building and boosting your business, however, these are the ones we will currently be focusing on. From finding the right property for your goals, to making certain that your business gets the public's attention, these tools can make a genuine impact. Wholesale buyers, Rehab Flippers or Rental Investors should consider putting these practices in place. Whether you are new to the profession and just getting started, or are a veteran, these concepts should be part of your personal portfolio.
4 Real Estate Investment Tools Every Real Estate Professional Should Be Using:
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Plan Your Exit Strategies: Determine before you walk through the property what you not only intend to do with it, but how you will finish your involvement. Even rental holdings need to have a solid plan for turning it over. By in large, with investment in real estate, the profit is most consistently realized in the turnover, the resale. Many hard money lenders will expect to see exit strategies as part of the loan negotiation. Don't just put all your eggs in one strategy basket, cover the contingencies in case one becomes unworkable. Take the exit strategies in the door with you, at a minimum as a concept, based on the projection for the property. Buy in low, rent advisedly, sell out high.
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Integrate Social Media: Facebook, Twitter, LinkedIn, YouTube, Pinterest, and any other cross-linkable sites you want to add in, are some serious free connection tools. Yes, you can upgrade some of them by subscribing to the 'professional' models, but even the basics are useful. Every day more and more people are becoming internet connected. The Pew Research Center data shows that from an average of 50% in 2000 the overall adult population was at 80+% online in 2013. One of the most dramatic rises is in older adults moving from 14% to 59% in the same timeframe. Search for properties, find networking opportunities, connect with wholesalers or flippers and buyers. The possibilities are wide open.
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Know Your Tax Code: Flippers and long-term investors are looked at differently by the IRS. Understanding, fully, the arcane workings of the code may never be an absolute, but being aware and talking with your accountant is a must. The category of flipper is taxed based on a retail stock rate. There is no 'magic number' of sales that make you a flipper by the tax code. One quick resale may be enough. Those deemed long-term investors are under a different tax rate, which can make a very significant difference to your business.
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Stay In Tune With Your Partners: If you are asking 'what partners' please go back to researching this profession. Partners include lenders, realtors, flippers, construction contractors, material suppliers, and others that are a vital part of your operation. These are not peripheral considerations. These people and other businesses, that you have cultivated a relationship with, are genuine assets. Being aware of changes in the market, how it could affect all parts of your network, keeps you from being caught shorthanded. Boom markets can boost or crunch your cash flow. Bust markets can put trusted partners out of business. Transition periods can entice quick cash types to attempt the business. Maintaining contact with your network means fewer negative surprises.
Whether you consider these tools, tips, strategies or simply a timely refresher they are just sampling of what your business should be using to stay profitable. To discuss these and more, please contact us.
