It’s your business …
Most agents spend more time planning their family vacation than they do planning for the success of their business. It’s true, less than 5% of ALL agents currently have a formalized business plan. This series of articles will examine the components of creating a successful real estate business plan.
Last month we covered the foundation of business planning. Now that you have your foundation in place you are ready to move to the next step; developing your exit strategy. I have never met a real estate agent that wants to work forever.
How long do you see yourself selling Real Estate? What do you want to do when you are tired of the real estate business or want to retire? Do you have an exit strategy? If not, now is the time for you to develop one!
Real Estate is an interesting business. Historically, the industry was built mostly on part-time agents who were just trying it out or using real estate to supplement their family income. The issue here is that it shouldn’t be “part time” as it’s now one of the most complicated and time-consuming professions that anyone could undertake.
Here are two critical pieces in developing your exit strategy:
- Decide when you will get out of the real estate business.
- Decide how much income or money you will need each year to live.
There are quite a few options and solutions for developing a strategy to stop day-to-day selling. Here are 3 key points you should focus on in developing your exit strategy.
- Build A Business
- Invest In Real Estate
- Begin An Investment Portfolio
Build A Business
Now isn’t this what we’ve been talking about; How to “build” your business for success in real estate? However, the truthful answer from most agents is “NO”! Well, the first and most critical step to building a successful real estate business is by completing your business plan! The next step is to TAKE ACTION on your business plan. Just having the plan is not enough … it’s the ACTION that produces the RESULTS.
Take action and build a highly successful real estate business and you will have a retirement vehicle that will let you drive your dreams.
Invest In Real Estate
Take a chance; have the ability to act on those deals, I am always amazed at the lack of actual real estate investing completed by real estate agents. Here’s a suggestion: Get to know your market and the current trend of that market area. Find the area that is undervalued. This may change year-to-year or even month-to-month in some areas. Look for the lowest to mid-level homes in that area. Start making some offers. You make money when you BUY property, NOT when you SELL that property!
Imagine this, if you were to buy one investment property per year for ten years, in that time period you could be a millionaire with positive cash flow and terrific equity! As there are various components to investing in real estate, you are in the BEST position … take advantage of it. The market today is full of opportunities for you. As a matter of fact, I can’t remember a better time to buy real estate in Southern California.
Begin An Investment Portfolio
Real estate, as an industry, is made up of nearly all “Independent Contractors” and as such, not always with the benefits of other careers or “jobs”, we are … self-employed. We are responsible for out taxes, expenses, marketing, advertising, salaries, insurance and our own retirement.
As an Independent Contractor we do have options and opportunities over a wide range of investment types. Start the process as quickly as you can and reserve a portion of each fee you earn to this process. Perhaps set a goal of ten percent of each commission check and place it in some type of investment or retirement plan; in 10 years you will have a very nice” nest egg!”
Do not overlook the benefit of consulting with a tax advisor to determine your best option for your portfolio.
Developing your personal retirement or “exit” strategy is an important part of your business planning and building process. Unfortunately, it is at the top of the list of things overlooked by many who come into the real estate business. Plan for it now and reduce your stress later.
I get it, so what’s next?
Now that you have a “Business Plan” and an “Exit Strategy” established for your business, the fun part begins. It’s time for us to start fine-tuning the business model and drive business into your pipeline. In next months article we will discuss “Lead Generation”. It’s a great topic and the next step in the development of your business.
I would like to thank everyone for the e-mails last month! We had some great discussions and I am excited to say that there are several agents of various experience levels implementing a business plan for the first time! Congratulations and I have only one question: Are you ready?
Remember, it’s your business …