25 Steps To Start A Real Estate Business From Scratch
Being in a position where you are finally able to go after your real estate career is one to enjoy. You are finally on the path to landing your perfect career and yet – you’re stuck.
Starting a real estate business from scratch comes with its challenges. The real estate market is a well-established one with competition from both new and established players.
You have nothing to fear if you concentrate on building a distinctive brand and have a name for yourself in the real estate industry.
The real estate business is ever-growing and profitable since the population is increasing day by day. You might want to ask about the meaning of a real estate business.
Let me break it down into two: Real estate means a collection of landed properties and Buildings; the business, on the other hand, deals with buying, renting or selling properties.
An investor primarily invests in properties while a real estate agent or agency deals in the procedure of selling, leasing or renting the property.
You can venture into the following categories of real estate:
- Industrial real estate e.g. farmlands, factories, or mines;
- Commercial real estate e.g. warehouses, retail stores, or office spaces;
- Residential real estate e.g. condos, houses or undeveloped lands.
You can make a lot of money in real estate either as an agent or an investor.
One key thing to be successful in this business is to have access to good information – which is knowledge.
These tips I will give you will guide you on how to start your own real estate business from scratch.
You can talk yourself up, and go into that new real estate career you so badly want – it just takes confidence.
The following tips will help you venture into a real estate business successfully.
1. Write your business plan
The first and most basic thing present in all businesses is planning. Whether you’re setting up a real estate business or a sales shop, you need a business plan. One thing that is common to all successful businesses is a good business plan.
The plan is not just a flimsy set of ideas to put on paper. It is a strategic and directional plan. To gain ground and conquer this market, you need to strategically plan your business.
You need to plan everything from small to big. Plan to grow bigger, expand and become a real estate investor.
Your business not only reveals and intimates you with the very important things in the business you are about to set up but also helps you to authenticate the ideas that you have and how to put them in motion.
A business plan formalizes your goals and vision and makes them tenable to other parties e.g. employees, investor, and financial institutions.
In the planning stage, you’ll be able to identify and solve some issues that may arise as you set up your business.
Even if you are new to this industry, you can get advice and ideas from books and people already in the industry.
You will save yourself some trouble if you involve people that know more than you do in the planning stage. They will share experiences and show you the dos and don’ts in the industry.
The thing to do in the planning stage is to make research. Research has many faces, one way to do it is through writings, publications, and books.
You can look up business plans for real estate that others have written, how well they fared – their success and fails.
You can use tools like Live plan. Believe me, this particular tool and other similar ones make planning a lot easier and easy to track.
2. Do your research
The first thing you put your business ideas and plans to is market research. This will tell you the validity of your business idea and which part of the business will be appropriate for you. It will also reveal the caste placement suitable for you.
You must be extensive in your research to get enough details to work with. Ensure research is done early to save time, and money and to find out the required skills you need to succeed in the market.
If done properly, market research will give you some real-life experience.
3. Start building your brand
A brand is an image your business has in the mind of customers, investors or partners. Building your brand entails creating awareness about your business in the mind of the populace.
It is crucial to build credibility and make your business look bigger than it is to your customers.
One of the things that make up your brand is the name, logo, campaigns, and press releases but most of all it is your reputation – the opinion of the people. Here are a few tips to build your reputation and your brand.
The values you add to people have a lot of influence on how people perceive you. A good reputation is priceless in the real estate business.
You have to be authentic in the values you render. I tell you this, people can tell the difference.
If you start small, you must first build your reputation and then build the reputation of your business.
When people are comfortable working with you, then they will be comfortable with the business too.
4. Write your real estate goals
As insignificant as you may think this is, you need to do it right early. How do you stay focused and in control to be on track to achieve your real estate goals?
Well, you first need to know what your specific goals are. Once you know what they are, write them down.
Keep them nearby so that you can track them and ensure you are following your own steps.
If you have a goal to achieve your dream career, you need to know what you need to do to get there.
It can be helpful to break those goals down into more manageable bites. You should know what smaller goals you need to achieve for your main goal.
5. Act on them
Next, you need to start actioning those steps. If studying again is going to help you to start that real estate business, then head back to school and get the right certifications.
Creativity and innovation are essential when acting on your goals. As a real estate agent, you must be innovative in your ideas, do new things that people haven’t done before. Set yourself aside and soar to where no one has ever dared.
Be the one-stop shop for the real estate business – that is the best brand you can be. I know it will not be easy but you have to learn, relearn and unlearn to become an expert in this field. Ensure that you are the “go-to” expert when it comes to real estate.
If you are still inexperienced, it is not all that bad. You must use that to your advantage. Being inexperienced allows you to learn and gain new grounds.
Guess what, you can only gather experience when you are inexperienced. Once you have that experience, you can only gather more!
Study up and up your skillset so that you can meet all the necessary goals to achieve the big goal you have in mind.
6. Use the required tools
The two most priced real estate tools geared towards contact management are Customer Relationship Management Software (CRM) and a Shared Inbox Solution.
It is established that customer management is required to have a good reputation and succeed in this business.
From outlook to sophisticated CRM, you need to employ the use of the tools that help manage customer contact and relations.
You must also utilize tools that allow you to work anywhere anytime. You must have a database for your customers and have access to it even when you are not in the office.
7. Build an Online Presence
The world, as it is now, is a global village. You’ve got to have yourself a hut in this village by having a website and being active on the social media platform.
Most people turn to the internet for most of the things they need and real estate needs are not left out.
To rent a house, buy land, or inquire about lease and other real estate inquiries, people look online.
Building a website and managing it will cost you money upfront, but it will surely reward you both in the short and long run.
Once this website is in place, you can now move a step further toward blogging and maintaining your social media channels to generate more leads for your website and business.
8. Plan your office space
Unlike most businesses, office space is not on the priority list. Even though it is good for your brand and reputation, most real estate agents start from homes or mobile offices until you can afford a suitable office space.
Most of the business transactions you conduct as an agent will be out of the office and only a few processes are completed in the office.
If you can, you could let your target market be in close proximity to the location of your office.
Oftentimes, a real estate agent’s office space is not in the same physical location as the target market or the property itself.
Where a physical location office may tie you down to a particular market, as a startup business, you need to be flexible and adapt to market changes easily.
For a start, you do not need to hire an employee for the sake of profit maximization. As you grow, you definitely need office space, at least for your employees. Most people that work with real estate agents are employed as contractors.
9. Build a relationship with people via marketing
You must give attention to your relationship with people. The way you relate with your customers must favourably set you aside from other competitors.
In the real estate business, personalized service is a good way to build a trustworthy relationship.
Relationship with people is the backbone of this business to market yourself and the business efficiently.
The best way to go about it is to balance an online marketing strategy with a customary outreach and connection approach.
For the first part, online marketing entails how best to reach a large number of people. As a new business, you must make a lot of noise with a good web presence.
Purchase and use targeted Ads, build your website and update it regularly, and utilize social and business media to connect to potential customers.
On the other hand, customary marketing is reaching out to people physically.
As a startup, you start with your immediate connections – your relatives, friends, etc. and you can move on to making new connections.
You go on to tell your connection what you do and ask if they know anyone you can render service to.
Always put yourself in a position to create a new connection and ensure you present yourself as a professional.
Groom those connections well such that when they think or hear your name, the Real Estate Agent will pop into their mind.
The mistake some real estate agents make is being inconsistent with their marketing plan. Once referrals start rolling in, they reduce the energy channeled toward marketing.
One thing that should never slack in any business is marketing. Markets change, so you have to train yourself to be ready to adapt your marketing strategies to new market changes.
10. Be Legal
Not only do you need to make things formal with your real estate business, but it is also safe to make it legal.
Among the things you can do to make your real estate business legal is to obtain a real estate license as applicable to your locality.
You should also find a brokerage where real estate agents work. Ensure you join the association of realtors and pay your dues.
11. Get A Certificate
Yes, you want to be successful. However, you’re so busy worrying about how hard the certification will be that you haven’t considered that you have the tools to pass.
When you’re thinking of failing at your career, it’s a little more challenging to envision the trophy career at the end of the resume rainbow.
One of the first things to do is the set your heart in proper shape and then get your real estate Certificate of Registration.
12. Appreciate the little steps
Lastly, don’t wait until you’ve hit that last goal to celebrate your progress.
Celebrate all the smaller achievements along the way. Then, you will be able to see the path to your goal far brighter.
Keep track of the small successes. This way, you can track what your strengths are and feel like you are getting somewhere. Your goals are waiting for you to achieve them.
The question is how much do you want to achieve those goals? What you’re willing to do to get them in your sights?
13. Set up your finances
One of the good sides of starting up from scratch as a real estate agent is that large capital isn’t always required.
You can even start as a part-time agent whereby you have another job at hand while running the business.
The job would ensure you get the finances you need streaming in while you get on your feet as a real estate agent.
As a starting real estate agent, a lump sum of resources isn’t a necessity. The only thing you must be careful to note is the flow of resources.
This is what I mean, you need to think about your cash flow, not just the startup cost. You must take into account the time it will take for you to start earning.
Though you might start as a real estate agency with little finances but to start or grow to a real estate investor, you need to be well-financed.
If you cannot fund the business yourself, you have to source the funds from others. So how do you find investor funding or a loan from financial institutions? This is where your business plan comes into play.
You will need to pitch your ideas to investors to get funds. You can also obtain funds when you talk to people, work out a trade, look into seller financing, borrow from friends and family, and obtain loans from banks or partnerships.
If you’d like help obtaining finance to make the most of temporary full expensing for your business, visit Network Finance website.
14. Have your Niche
You need to start building your real estate business by identifying your niche. Real estate is a vast array of businesses and it is not possible to work in all.
There are various niches such as; residential real estate, resort and vacation homes, rental property, property management, and others.
As a starter, you cannot do business in all, hence you need to choose the niche you know you can function well and save yourself from confusion or losing direction.
Preferably, one that is related to the field you have previously worked in. Have a focus and do not be intimidated by what people say.
15. Choose a business structure
While thinking of how to build your business from scratch, you must have a structure for operation.
This will help you to meet the requirements to legally run your company and build a successful business. The main types of business structures are:
– Sole Proprietorship: As a sole proprietor, you are the single owner of the business and you are responsible for the smooth running as well as the profit and loss. You make all decisions alone and you take all risks involved.
– Partnership: This involves two or more partners coming together to run the business. They are both involved in decision-making and they share in the profits and losses.
– Limited Liability Company: This structure puts a limit on the personal liability of business owners and still includes the tax and benefits.
– Corporation: In a corporation, the business is legally separated from the owners. A corporation has the autonomy to pay taxes, own properties and have contract deals.
Hence, having a structure will guide your decisions as you build your business.
16. Have a Sales Plan
The success of real estate depends on the relationship you have with your clients. It is not just enough to plan and have a niche and capital, you should devise ways to sell your services and seal deals.
This implies that you must meet with your prospective clients personally. Talking with them online might not be productive. You need to be sure if you can serve your clients or not, and how.
Having a detailed and organised sales plan will make your clients come back, they would also put in good words for you and make referrals.
17. Take stock of your finance
As you build your real estate business, do not overspend by buying unnecessary things. As a starter, avoid buying extremely expensive things.
You can start little, then as you expand, you can get other equipment or things you need. Keep track of your sales and commissions, and try all you can to achieve business success.
18. Build an efficient Accounting system
You must have an efficient bookkeeping and accounting system that would help you to track cash flow.
You might need to hire a bookkeeper to keep your bank and financial records as well as an accountant who will help formulate an efficient accounting strategy.
These two must be well-versed in accounting, keeping records, tax preparation, and more.
Also read 11 Filing and Records Management Tips
19. Get a Lawyer
You need to get a lawyer to legalise all the deals between you and your clients. In a partnership, the lawyer is involved in splitting the ownership interest and he prepares the rules binding the partnership.
Having a lawyer builds trust and credibility in your clients and makes your business run smoothly.
An experienced lawyer can also put you through the steps while building your real estate business.
Avoid hiring a less experienced lawyer who may cause more harm than good to your business.
20. Build your website
A good way to start your real estate business from scratch is to have an active online presence through a well-designed and updated website.
Your website is the landing page for all your intending clients, where they can find all your products and services. It must tell your clients everything about your business too. So, build your business website and drive traffic to it.
21. Get your business insured
One of the most important things you must do as a real estate entrepreneur is to get your business insured.
Insuring your business protects you from impending loss and damage. Loss is inevitable in business, but you can be sure that your insurance company will compensate you for any loss incurred.
Insurance will also cover damages caused due to intellectual lawsuits. There are various types of real estate business insurance you can leverage.
They include professional liability insurance, property insurance, workers’ compensation insurance, home-based insurance, product liability insurance, vehicle insurance and so on.
22. Design a good Logo
Brand identity is very important in your business. Hence, designing a good logo is a great way to be successful in real estate. The logo becomes your symbol of identification everywhere and conveys your values to intending clients.
The colours and elements in the logo should depict what you do. It must not be an imitation of your competitors.
So, be unique and let your logo stand out. A bad logo will do your business more harm than good.
23. Be unique
To be successful in real estate, you must strive to stand out among your competitors. You must discover good things others are not doing or do yours differently.
Since you are just coming up, you might not be noticed immediately, so you must run your business in away that will draw clients’ attention to you.
Engage in healthy competition with your competitors too,and avoid pulling them down or giving scornful remarks about them.
24. Have a good Client-customer relationship
The only way to keep your clients coming back is to have a cordial relationship with them. Be willing to help them out anytime they are stuck with any real estate problem.
Follow up with your clients and be sure they are getting the best from your products. Constant checking in will also make them feel important.
Also see 11 Importance of building strong Customer Relationships
25. Ask for reviews and referrals
Your business will be very successful if you capture customer feedback. Ask clients for reviews and through that, they can also suggest better ways of doing things.
A satisfied client will always refer you to friends and colleagues who might need your services. Don’t be shy to ask for referrals, but see it as a link to new businesses.
Have you ever sat and wondered why you’ve been committed and talented and yet not getting anywhere?
Rather than focusing on what you want, you’ve been focusing on the wrong things, and it’s become a problem now. Here’s the good news: you can change that!
Moving up the corporate ladder is a marathon, not a sprint, but it doesn’t mean that you don’t want it right now.
It’s that mindset of yours that could be holding you back if you’re not going anywhere, but the good news is that you don’t have to remain stuck.
The real estate business requires a solid business plan with good market research to get the target customers.
Getting investors is not too tough once you have a substantial business strategy and you can still start with small capital.
Put a good online and offline marketing scheme in place to drive in customers and with all these tips, you are set to become a real estate agent and grow to be a real estate investor.
I hope this helps you to start something!