Identifying Your Niche

Real Estate investing is like snowflakes; there are no two that are the same. While you may think, “I invest in this location and I know ten other people who do too”, there are so many variations that make each investor unique. For example, they may not go in all of the same neighborhoods you do, they may not be able to bid as high as you can, they may have a different vision for the final product and thus a different end user, they might not be able to move as fast as you can, they might invest as a hobby, while you do it as a business, and so on.

Recognizing this does not ignore the fact that you have competition. You do, but understanding what your niche is will give you the best odds for you to be successful, no matter who your competition is. Still confused, let me explain.

Three years ago, when we started looking for a house we knew we were looking for a house that had good bones, needed to be renovated, and could sell for more than we invested. We made an offer, and we got it. At the time, we didn’t realize why we got it, nor did we realize how competitive our market was. It wasn’t until we sold that house, and had to wait almost six months and look in a location that is an hour from us, that we realized why we were so successful with the first house.

When we took a step back and looked at why we were able to get our first house, we identified the following: 1) It was built in the 1920’s. We have since identified that most flippers in our area stay away from homes from the 1900’s-1960’s (a range we love to renovate). 2) It was in bad shape; my dad and I powerwashed the interior of the house! In addition it needed a full gut - new wiring, new roof, new plumbing, new hvac, it had an addition that needed a new foundation (because it didn’t have one!), and thus an entire addition needed to be rebuilt...you name it, we did it. 3) The renovation took a long time, and had a hefty reno budget (not only because it was our first flip, but also because of the work required). As Dolly Parton says, “You gotta keep trying to find your niche and trying to fit into whatever slot that’s left for you or to make one of your own.” For us, we fit into the slot that was left for us, and that ended up being the slot we have the expertise and love to handle; it is also, the spot we occupy today. Older homes are our niche!

Once you find your niche, you need to perfect it. You will need to work hard to perfect it. This will solidify your place within that market. For us, once we identified our niche, we sought out houses that fit that criteria, and then we looked at our processes to see how we could make improvements. For example, almost a year to the day after we sold our first flip, we got a house that needed the same amount of work. Our first house took us nine months to complete, and this one took nine and half weeks!

There is a place for everyone in this business. Look for your spot, and own it!