How We Grew a 6-Figure Plus RE Business In Year 1 At 22 and 23

(Note: First blog post. Be forgiving of errors please!) There’s a huge hurdle you’re going to have to climb your first year in business, but the great news is it’s mostly mental. You know more than you think! Don’t get me wrong, it’s going to be tough and take long hours. You’re going to have to do things that you hate, never done before, and do things that give you anxiety and fear. If you’re able to power thru these mental hurdles, the rest is relatively easy.

1. Take calculated risks. If you’re going to go full time and want to make at least 6 figures your first year, you really have to buckle down and not be afraid to invest large sums of money into your business. I maxed out my credit card and wiped out my savings account just on setting up marketing campaigns. That’s probably not a great idea in hindsight, but the same go-get-em mindset is needed. If you want to make six figures your first year (in revenue), you’re going to have to do everything on a larger scale than you may feel comfortable with at the moment. Start small, find out what works, and scale quickly. Invest most of your earnings back into the business.

2. Make sure you’re creating value for your customers. Winning over deals in highly competitive markets (i.e. SoCal), means making accommodations or going the extra mile for sellers. It can be as simple as answering all their calls live and providing quick service. The thing is, my brother and I win deals all the time just by being professional, answering the phone right away, and not playing a high-pressured sales game. Decide how much you need to make on a deal, and make sure you exceed that amount in value creation for your customer. For example, buying a property that’s costing the sellers thousands of dollars in code violation fees a month, especially when they don’t have the money or time to fix the violations is huge value creation! Or boarding a place up that’s in probate and being vandalized. Then watching it for the out-of-state-sellers while they wait on getting title (Don’t do that unless you have an executed contract!). If you’re starting out as a wholesaler, remember that you’re the problem solving orchestrator. You’re directing the show. It’s your responsibility to come up with solutions.

3. You have to identify a focused niche. Now, this may be repetitive, but here’s why I’m emphasizing this. When I first started, I kept hearing these mantras: “Pick a niche and stick with it.” “Get good at one thing first, then branch out.”

The problem was, I was trying to flip, wholesale, lease option, and seller finance, all at once. This caused chaos and there was no “flow”, or systematic approaches to how we decide take down a deal.

Once we (my brother and I) firmly decided to wholesale to build capital to do our own deals, we became focused and our transactions became smoother, and deals came along more often because we can act quickly. We decided once we completed a couple wholesales, we were going to find partners to start buying rentals. This kept us from having to make too many decisions, complicating the process, and slowing us down.

Stay focused only on one or two areas at first. DO NOT spread yourself across 5 markets and wonder why you’re not getting anything. Just stick to marketing to 1 or 2 markets consistently and deals will eventually come.

4. Track your data. It’s amazing how many people don’t do this. When we mostly wholesaled our deals, we asked each buyer what their exit strategy was, and measured what kind of rent-to-purchase price ratios they buy at and what kinds of returns they were getting for flips. We eventually figured out these numbers after a few deals, and we now know when they say they can’t do it at X price, they’re bluffing, and if we hold out, we’ll get the deal done.

Also, tracking data about marketing is crucial. Response rates, cost per acquisition, cost per lead for each marketing campaign, etc.… This will help you allocate money where it needs to go. For example, we realized that one type of marketing was beating out direct mail, so now we’re cutting back the lowest revenue and highest cost per lead direct mail list, and allocating that money back into the more profitable marketing avenue.

5. Create processes. Create systematic approaches to taking down deals. Remember, the more thinking you take out of the equation, the less errors you make, the faster and more organized it becomes. Get a cloud based CRM. Create next steps for the lead. Put a reminder to follow up in 4 weeks. Have a place to upload CMA’s. Create a way to systematize your marketing. The less we have to think about these types of things the better. Thinking and doing these types of administrative activities are huge time wasters.

6. Remember, most of the people on this earth you should not take advice from. Most people are going to tell you “Take a break, geez. Why are you working so much?” or “You just closed a big deal; take a 2 week vacation!” or “You spent how much on marketing!? Are you sure that’s a smart idea?” or “Why don’t you just stay at your job another year or two?” or “Shouldn’t you just get your license first?” (I’ve heard all of these! LOL) It’s great to be an action taker, but the only way to really surpass your goals is to take extreme measures, and not letting progress slow you down. (By that I mean don’t let small successes let you become complacent or content where you are. Be happy, but stay focused and always remember someone, somewhere is working on their RE business right now! So get to it!)

How to make 6 figures your first year in business recap:

• Take calculated risks.
• Create value. Solve problems for people. If you don’t, you’ll never get paid.
• Focus on a niche. Pick one strategy and one or two markets. Do not deviate until you’ve mastered it.
• Track your data. Know where to put your marketing dollars. Know how to price deals, and know your margins you have to hit. Allocate your dollars efficiently.
• Create a system so you don’t have to think. Less thinking about what to do next means more time spent on money making activities.
• Don’t listen to most people. Don’t let progress keep you complacent.

And of course, don’t let being young become an excuse!