Mike Hambright emphasizes the key aspects of treating your real estate investing as a business so that you can grow and scale your business. Networking, marketing, education, systems in place, etc are all important areas of your real estate investing business.
Welcome to the We Buy Ugly Houses show, where real investors share real investing stories and lessons from the trenches, where our team buys thousands of investment properties each year. Now, let’s meet today’s host.
Hey, everyone. This is Mike Hambright of HomeVestors, the “We Buy Ugly Houses” folks. I’m a franchisee in the Dallas, Texas market and I’m your host today on the We Buy Ugly Houses Show. Now, today, we’re going to talk about how to treat your real estate investing business like a business and not a hobby. Many fail because they have something to fall back on. They have a comfortable paycheck, maybe some built-up savings, maybe the income from a spouse, something that makes you feel safe that doesn’t allow you to get out of your comfort zone to really take this business seriously.
You need to treat your real estate investing business like a business. Otherwise, you’re never going to kind of grow and get out of that hobby stage. There are some things you have to do consistently and some risks that you have to take and some things that you have to be willing to kind of go out on a ledge for, especially early on. If you don’t, you’re just never going to take off. Now, to be successful, you need to be structured like a business and let me give you some areas here that are really important.
You need to consistently advertise to generate leads. As a real estate investor, it’s all about leads. If you don’t have the leads, you don’t have a business. If you don’t consistently do activities that will help you generate leads for your business, then you’re simply in hobby mode. You’re not going to be able to consistently generate revenue and income and profits, obviously, from this business.
Another thing that’s really important to treat it like a business is to have a brand. There are so many investors out there that are simply the “I buy houses” type, or faceless, nameless people on the side of a road on a bandit sign, or something that nobody can identify who you are, or you don’t stand out from the pack. It’s unfortunate that that’s just how people are going to remember you. In fact, they aren’t going to remember you because they don’t know who you are.
It’s really critical that you spend a lot of time networking with other investors and service providers. As a business, that’s something you would do consistently because you’re anticipating doing a lot more deals. So you might as well network with other people that you can do deals with, that you can buy houses from, sell houses to, as well as general contractors and lots of other people that you would use in your business. It’s important to constantly be looking for those resources and to constantly be growing your network.
There’s a ton of other things we could talk about. But one more I’m going to point out is it’s important to utilize great systems to help you stay organized. A lot of people that are in kind of hobby mode versus business mode are operating on a legal pad and manila folders. They don’t have any systems in place that allow them to kind of refer back to things that happened in the past. Follow-up is a really important part of this business, following up on your leads. It’s very hard to do that without some sort of systems and CRM to help manage that.
Now, if you don’t do these things, you’re missing out on many of the great benefits that a real estate investing business has to offer. A lot of us got into this business to kind of leave the rat race, to not have to work as hard as we have in the past, to not have to work as hard for somebody else as we have in the past. If you don’t do some of the things I just talked about, you’re really just probably creating another job for yourself. It’s hard to kind of scale or get to the next level if you are operating in hobby mode.
So if you’re either trying to get started in real estate investing or trying to take your business to the next level, you’re only going to create a job, that J-O-B, for yourself if you don’t get set up like a business. Really, all small businesses are about scale and leverage. It’s hard, especially if you’ve left corporate America where you probably had access to lots of resources. You had an IT problem, somebody fixed it. You had a plumbing problem, certainly, you didn’t have to go in the bathroom and fix it.
But as a small business owner, those are all things that you have to do. You’re going to have people pulling at you from every angle to take your time and absorb your time. But your business is going to become more profitable and you’ll see the benefits of being self-employed if you can scale that business. It allows you to bring on additional resources. It allows you to be able to afford just hiring somebody else to do those things. But if you don’t get out of hobby mode, it’s going to be very difficult.
So in real estate investing, we talk a lot about leverage. Now, usually, that discussion is around financing, borrowing from banks and hard money lenders, and really using other people’s money for leverage. But there are a lot of other things that are really important for you to leverage as a real estate investor, and I’m going to name a few here. Your network, who you know, and who knows you, those are critical things. Your time is really important. It’s the most valuable asset that you have.
If you can build a team of others around you that can focus on what they are good at, then that allows you to focus on what you are good at. So you have to be very protective of your time and you have to be able to scale your business and leverage that time by being able to do activities that will allow you to grow and afford to have a team around you. Because there’s no way you’re good at everything and there’s no way that you love doing everything that you do. So you might as well find other people that can help offset where your weaknesses are.
The last thing I want to talk about in terms of things you need to leverage are systems. We talked a minute ago about how some folks may just be operating on a legal pad or a napkin. Who knows? But technology today has changed dramatically over just the past few years and it can dramatically improve your ability to grow and scale your business. So if you’re not using or utilizing relevant systems, you are completely missing out.
The reason many investors fail is they treat their business like a hobby. They don’t consider the things we just discussed. Now, as a HomeVestors franchisee, there are nearly 700 franchisees across the country that understand what I’m talking about here. That’s why we bought into a franchise system. It’s in many ways a franchise system that is often referred to as a business in a box, and for a good reason. A lot of the systems and other things that we’ve talked about here are in place so we don’t have to go figure those things out.
Now, if you’re interested in the HomeVestors system, that’s wonderful. If you’re not interested in joining the HomeVestors system, you still must create all of the things that I just talked about in order to treat your business like a business and not a hobby. You’re going to have to create a brand, you’re going to have to find systems and keep them updated and you’re going to have to find ways to leverage your time and scale your business.
So I’d encourage you strongly to consider what your goals are, as we talk about all this, it really matters what your goals are, and to continuously work to find ways to achieve your dreams. My guess is that no part of your goals and no part of your dreams are to work harder or to work more. So I hope that helps you a little bit. Hope you have a great day. Thank you for joining me and I’ll see you soon again on the We Buy Ugly Houses Show.
Are you looking to get started in real estate investing or take your investing business to the next level? HomeVestors, the “We Buy Ugly Houses” folks, is the number one home buyer in America, where our franchisees purchase thousands of houses each year, many of which started with little to no experience. If you’d like to chat, please visit UglyOpportunities.com/contact. Learn more from the We Buy Ugly Houses Show, an amazing HomeVestors team, by watching more shows at UglyOpportunities.com/show or by finding us on iTunes or Stitcher radio.