Hey there investors, Cody here.
I hope you have your seat belts on tight because we’re about to take a ride – a huge ride. You’ll be privy to a massive amount of important information that’s going to equip you to be a top-notch investor. With this guidance, you’ll outshine your competition and leave them in the dust. Are you ready to get started?
Gleaning from all my years of working in the real estate investing industry, I’ve broken down the different stages of investing into 6 different segments. And in this series, I’m going to take you through all 6!
Let’s quickly touch on what each stage is before diving into the details of Stage 1…
The 6 Stages – Overview
Stage 1 – Setting Up Your Business
Since this is the foundation, you want to do it right. This isn’t the place where you want to drag your heels, spend more than you have to, or waste time on things that are not moving you forward. My philosophy in the beginning is to do more with less. This is the time to find out if real estate investing is really for you.
Stage 2 – Generating Leads
If you want to consistently grow your business, you must know how to generate quality leads. You have to generate a lot of leads in order to write a lot of offers. The more leads you generate, the more deals you make AND – ta da – the more deals you make the more checks you cash.
Stage 3 – Processing Leads
Once the leads start coming in, you have to process those leads. So Stage 3 is learning how to take care of those leads after you get them. The first step is to decide if it’s a deal or a dud. Learning how to make these decisions will save you time and money.
Stage 4 – Deal Types
Next, it’s time to decide what type of deal you want to do:
- Creative real estate investing deals
Note: I’ve covered a lot of general info about wholesaling in a series of posts, check those out starting from this one – about how I got into wholesaling in the first place.
Stage 5 – Funding
Now that you’ve decided which type of deal, it’s time to think about funding. How will you fund this deal? (Big hint!) You do not need to use your own money to fund your deals. Learn all the different ways to use OPM (other people’s money)!
Stage 6 – Closing and Getting Paid
We wind up this series with learning all about the closing process and (yea!) getting paid! Getting paid is one thing, but when that money starts rolling in, will you know how to handle it? We’ll talk about taxes and other aspects of money management.
Okay, those are the 6 stages – let’s get specific now…
How My Story Plays a Role
Flashback to when I first started out in this business. I had no money to my name. I had a vision of what I thought a successful RE investor looked like – expensive cars, big houses, boats and lots of money. I was young, scared, nervous and had no idea what I was doing. I was way out of my comfort zone.
The discomfort and fear drove me back into my old comfort zone. I kept thinking, ‘I have to get prepared.’ I had to get my paperwork ready, build a website, set up my LLC, talk to a real estate attorney, take a few courses and on and on. I thought I had to have everything perfect before I could begin.
I was also thinking: I look like I’m 10 years old. No one is ever going to listen to me or take me seriously. (That’s called self-limiting self-talk, in case you didn’t know.)
So what did I do? I froze. It took months for me to even begin to get into the game. I know a lot of investors today who are in this same predicament – using anything and everything as an excuse not to get started.
That perspective I had of wanting everything to be perfect changed only after I did a few deals and failed a few times. I literally forced myself into situations and oftentimes screwed things up.
Thankfully, along that journey, I was able to hook up with a great mentor, which was like pouring fuel into my gas tank. He gave me focus and direction, and his input was vital to my success. But even with his help, he wasn’t there to do the deals for me. I still had to get out there and make it happen.
One day, my mentor gave me a great analogy. He said for me to imagine that I’m sitting in my driveway in my car ready to go on a road trip. He then said, “You can’t sit there and wait for every light to turn green before you start.” Point being, there will never be a perfect time. There’s no such thing.
That’s when I began to understand that I had totally over-prepared and overanalyzed. I wasted countless hours coming up with logos, creating business cards and creating flyers that explained who I was and what I did. I looked into blogging and internet marketing, and none of this did me any good. It didn’t get me even one centimeter closer to making any money.
I realize that all the “busy” work gave me a sense of doing something. But I wasn’t doing anything of value.
What DO You Need to Do to Set Up Your Biz?
Do you need to set up an LLC first? That depends. For me, I wanted to set it up right away, but then I found out the paperwork takes time, so I decided not to do anything while I waited. (All the while I was waiting, other investors were out there making money.)
The thing is, if you jump into a wholesaling deal, it’s okay to do it in your own name because you’re in and out of the deal so quickly.
Once you get into the business, you’re doing deals, you’ve found out if you like it, cash is coming in, then yes, go ahead and set up your LLC. (There’s a way to set up an LLC and “treat it as an S Corp” for tax purposes. Talk to your attorney about how to do that.)
When setting up your LLC, use a vague, general name. It doesn’t have to be flashy. Something like ABC Holding Company. When I started, I thought the name should be something like, “Sell Quick for Cash,” or “I Flip Houses.” When you write a lot of offers, especially on the MLS, those flashy names will be seen by Realtors who will then not be as anxious to give you a discount.
Another thing, when setting up your LLC name, look to see if the domain name is available. If you do that, then you can set up your email address with that business name. For example: firstname.lastname@example.org
Remember that your identity and your business entity are two different things. I can have lots of domain names on the internet, but my business entity can be more general so as to protect me and give me some anonymity. I like to have smaller DBAs (doing business as) as a way to separate my identity from my entity. I match these up with the types of leads I’m trying to generate.
So, what else should you consider when setting up my business…
- Do you need an office? No!
- Do you need flashy clothes? No!
- Do you need business cards? YES!
This is a relationship type of business and you will be networking a lot. You will need business cards. Mine are two-sided. Contact info on the front; referral form on the back making it lucrative for them. If someone refers a lead to me that turns into a deal, they get paid.
I always have a blank line or two on my cards so I can write on them. I don’t want to just hand it out. I want to write something that will cause them to remember me. I want it to trigger their memory.
Until Next Time…
Okay, friends, we’ve talked about some great info today – but there’s loads more in even more detail coming up.
In the next session, we’re going to talk about setting up the best type of phone system, creating your business email address, finding your target areas, building relationships and lots more (and we’ve only hit on stage 1!).
Now you see why I told you to fasten your seat belt? Hang on for the ride!
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