I’m sure most have you have seen the TV show Shark Tank. If not, you need to watch it. In most cases it is about an entrepreneur with a product looking for investment in their business to “take it to the next level”. Rarely is the business owner looking for just the investment money. They have determined they don’t have the expertise or the contacts to move their business forward. They want the skill of the “sharks” more than they want their money and they are willing to give up a substantial portion of ownership to get it.
I find myself literally talking and sometimes screaming at the TV, “Take the deal!” or “You don’t need the sharks! Pass! Pass! Pass!” It is amazing what people will do when they are desperate or even worst, haven’t thought through the possible scenarios the sharks might negotiate. It is a great show and it makes entertaining TV.
You can apply the lessons learned in the Shark Tank to your real estate investing. In most cases your real estate investing is a service, not a product. In the end you may own or control a physical asset, but the activities you engaged are service oriented. In other words, you are solving someone’s problem through an action you take – a service.
In providing your service you have developed specific skills in certain areas. These areas are usually the ones that provide the profit or margin for your real estate investing business. This would include negotiating below market acquisition, repairing or improving the property, renting or selling the property, etc. But just like in the Shark Tank, you need other important skill to make your service work. Without these other skills, you will not be as successful and in many cases you will not be able to complete the deal. Just as important, if you try to deliver the services outside of your expertise, it will cost you money because you can’t do it as well or as fast.
So, if you focus on the activities that provide you your profit, what should you outsource? Here are the easy ones: legal, escrow, financing, property management, etc. There are others you might want to consider, as well, like marketing, property research, end user sales, etc.
The point is you need to take a hard look at your business and ask yourself the question, “What do I need others to do for me that will improve the overall profitability of my business?” Said another way, where do you need to hire a shark to take your business to the next level?
We are having a special full-day seminar on managing a profitable business this month. One of the most successful real estate investors in the country agreed to hold this special session because I thought it was important for you. So in addition to “Learn How to Quick turn Houses That Need Renovation into Fast Cash”, Robyn Thompson will be sharing her vast knowledge of running a successful real estate investing business on Saturday, February 23rd, in the added special session “Learn How to Run Your Business Like a Seven Figure Business, Not a Hobby!”
I have learned a few things about real estate investors over the years. One thing I learned is that real estate investors don’t like to work on what I call soft skills – sales, negotiation, writing, communications, etc. There is no question you should focus on these areas as the return, while difficult to measure is very large. The same is true for understanding how to run a business. Knowing the techniques will save you tremendous amounts of time and just as importantly remove unnecessary worry. And it just may help you to understand what to outsource versus what to spend your precious time on.