So... You Want To Be a Real Estate Investor Print
Written by Lou Brown   
Monday, 01 March 2010 17:15

If you have the intention to be successful in Real Estate, you should first take a look at what works for others.  Let’s understand what you want to accomplish.  You want to have your own business in real estate.  Either you want to buy and sell, or buy and hold, or deal in mortgages, or buy and renovate, or build, or subdivide, or some derivation of these.  So we are going to proceed based on what we think we should do next.  Let’s take a look at what other entrepreneurs do to go into business.

The track that follows the traditional process for folks going through the process of earning a living includes predictable paths.  And this is the distinction I want you to know.  Teaching a skill to go into business is what is taught at college… no that is NOT what is taught at college… they teach you how to work for someone else!  Even courses entitled Entrepreneurship, Business Management, and Business Applications don’t teach what you need to know about creating, and more importantly… sustaining, a viable business.  You see, they don’t teach what you need to know about the process of owning and running your own business.  They do teach much of what you need to know about how to work for someone else, but they do not teach how to work for ourselves.

Not only are you not taught how to start or maintain a business for yourself, they also don’t teach how you can get wealthy. That’s the process of how to create assets that work for you, instead of you working for it.

So what can you do to learn this?  You must learn from someone who has done it for themselves. More importantly, you must learn and adopt a process to have that happen
for you without all the expensive and time consuming trial and error that comes with creating a business without a path to follow.

According to Michael Gerber, author of the E Myth, 1,000,000 people go into business in the United States each year.  Within 5 years, 96% of them are out of business.  I don’t know of anyone who has that intent, but that’s what happens.  They, like you, are attracted to create a business in hopes it will provide a good living and retirement income too.  But for 96% that promise or vision does not come true and they lose the chance for freedom from the shackles of working for someone else. 

Gerber goes on to say that those with the dream of entrepreneurship thought business worked one way when in actual fact successful businesses work in quite a different way.  Hence, the title of the book, The E Myth.  He reports that when the entrepreneur follows a different path , 75% are still in business AFTER five years.  What he found that you need to know is that those who enter business with a franchise are able to build and sustain their business because they have a path to follow.  A clear, direct, tested and proven path that leads them right to the money without the risks and pitfalls that so many others fall into. 

I can relate one story.  Some of you have heard me talk about the Holiday Inn we built, funded using private money.  We could have opened that hotel and called it “Lou’s Hotel”.  That would have saved us a ton of expense, but would it have been an uphill battle for us to find customers?  Of course!  Not only that, we would have had to create our own reservations system, housekeeping training, accounting software, resources for supplies, and all the rest.  Instead we opted to go with Holiday Inn.  Now that was expensive.  $35,000 to use their name, $25,000 for their training, $20,000 for their software and 8% of every dollar that comes in for the entire length of the franchise agreement.  Whew!  But we opened the doors to an immediate 80% occupancy, and understanding of the proper way to manage the hotel, staff, marketing and lots of support.  We were able to take their training, tools and support and have an up and running business without having to make it up as we go.  Doesn’t that make more sense? 

Hummmm… Does the Real Estate business have such a path?  You bet it does! And you can actually choose the path to follow.  You can buy a franchise that requires you have a $250,000 net worth and obligates you to invest many thousands of dollars to get in and requires a monthly marketing budget of as much as $50,000 per month!  That may be a good idea for some of you reading this who really intends to have a huge business, staff and lots of ongoing requirements.  But for most of us, that is not the path we want or can afford to follow.  Whether it be that you don’t qualify because of the net worth requirements, or just don’t want to, or want the ability to invest all that to get the support and leads, you know this is not for you.  Most of us just want a business plan to follow; one that allows us to build a business that will generate a good income and a future of dependable cash flow for you and your family.

This business plan needs to cover all the aspects of this confusing real estate business, provide for safety and allow for controlled expansion.  It needs to include all the possible profit centers in Buying, Renovating, Managing, and Selling.  It needs to support all the aspects so profits and risks don’t get overlooked.  It needs to provide a business model that can be easily duplicated regardless of the size or economic condition of the market you are in.  It needs to have a communications component to allow for adjustments as the market changes.

In order for this concept to work in your real estate business your business plans needs to have Tools, Training and Support.  It needs to be a holistic approach rather than a concept here, a form there, a piece of marketing material from someplace else all jumbled together like some untested recipe.  In fact this is the recipe for disaster that so many would be investors follow.  And that is why, as Gerber explained, that 96% of the ones without a plan will be out of business in such a short period of time.  Doesn’t that make sense to you?  Get a true, time tested business plan that works in all locations and takes advantage of the most compelling profit centers in the business complete with support to be sure that occurs.

So I’ve identified the component parts you need to make your business work regardless of your current net worth or monthly marketing investment.  In fact we have developed a system that allows you, regardless of income or background, to build a business that will have all the benefits a franchise offers without nearly the investment.  Tools, Training and Support… all in one place AND with the component no one else teaches.  The aspect and huge profit center of holding property.  Assets that will work for you for the rest of your life.  This is where WEALTH resides.  Assets and equity working for you instead of you working for it.  This allows you to do something today, such as find and negotiate a deal, that you do in a way that allows you to reap profits monthly for as long as you choose.  This hidden profit gift that keeps on giving as long as you choose.

Lou Brown has  invested in single-family homes, apartments, hotels, developed subdivisions and built and renovated homes and apartments.  Each of these experiences has given him a proving ground for the most cutting edge concepts in the real estate investment industry today.  He’s widely known as a creative financing genius with his deal structuring concepts.  Being a teacher at heart he enjoys sharing his discoveries with others.