Many people who get involved in real estate investing have a dream: to someday go full-time as a real estate entrepreneur. To many, achieving full-time status may seem difficult or daunting—but it doesn’t have to be!
In this episode, Jeff goes over the five things that you must do in order to build a full-time business as a real estate entrepreneur:
- Always be marketing
- Always be following up
- Use the Triple-Threat Acquisition Strategy
- Always be cultivating private money and other sources of funding and;
- Always be cultivating a list of people who want what you have.
Okay, so are you one of them? One of the people that is involved with real estate investing or getting started in real estate investing, who wants to eventually do it full time? Well, survey says a lot of people who get started in real estate investing do eventually want to become a full time. But what does it mean to become full time as a real estate investor or as we like to say, a real estate entrepreneur? In today’s episode, I’m going to go over with you the five things that I believe you have to be doing in order to reach that point where you can go full time as a real estate entrepreneur. Let’s cue up today’s theme song and we’re gonna dive right into this conversation.
Welcome to Racking Up Rentals, a show about how regular people those of us without huge war chest of capital or insider connections, can build lasting wealth acquiring a portfolio of buy and hold real estate. But we don’t just go mainstream looking at what’s on the market and asking banks for loans nor are we posting We Buy Houses signs are just looking for “motivated sellers” to make lowball offers to. You see, we are people-oriented dealmakers, we sit down directly with sellers to work out win-win deals without agents or any other obstacles, and buy properties nobody else even knows are for sale. I’m Jeff from the Thoughtful Real Estate Entrepreneur. If you’re the kind of real estate investor who wants long term wealth, not get rich quick gimmicks or pictures of yourself holding fat checks on social media, this show is for you. Join me and quietly become the wealthiest person on your block. Now let’s go rack up a rental portfolio.
Thank you for joining me for another episode of Racking Up Rentals. Show notes for this episode can be found at www.thoughtfulre.com/e80. Please do us a big favor by hitting the subscribe button super quick and your podcast app it’s super, super helpful in making sure other fellow thoughtful real estate entrepreneurs can find this show. Onward with today’s episode.
In today’s episode, we’re going to talk about what it takes to go full time as a real estate entrepreneur. So I guess I want to start first by saying that full time does not need to mean that you quit your other job. Now maybe for you, you want to quit your other job, and that’s completely fine. But actually, I’d like to speak about this topic today in a little bit more flexible definition. And I want to talk about in the context of full time, meaning that you are always doing your real estate entrepreneurship that you have a constant flow of activity, and that leads to constant progress. And so whether you want to take that constant progress and that constant flow of activity and always be doing it so that you don’t have to do another job. That’s just great. That’s basically what I did as well. But even if you like doing what you’re doing in other ways, maybe you like the mission of your other work. Maybe you like some of the benefits of your other work like health insurance. Any reason like that is completely fine. So what we’re going to talk about today is how do you be a full-time real estate entrepreneur, whether you choose that to be your only professional focus or not, and probably not surprising. We’re going to talk about the fact that the key to all of this is that we are doing business in a way where we are pursuing deals that are off market, not listed properties. And we are doing it with financing that trip traditionally does not come from a bank or typically doesn’t come from a bank. And if we can do those two things that will enable us to constantly be scaling our activities without hitting the hurdles that create the hiccups that kind of create the herky-jerky stop start experience a lot of real estate investors have when they buy a property, but then they’re out of money or they’re out of loans that they can get from the bank or they are out of opportunities in deal. So we’re going to talk about an off market, non-bank financing approach that will allow you to grow and scale at the rate you want to.
There’re five things we’re going to talk about today that comprise the things that you need to be doing all the time if you want to hit full time status. So I’m going to run through the five real quickly first, and then we’re going to go back. And we’ll take a couple minutes to talk about each of them. Number one, you need to always be marketing. Number two, you need to always be following up with the leads you have generated. Number three, you need to be employing the Triple Threat Acquisition Strategy to analyze the opportunities that come to you. Number four, you need to always be cultivating private money and other forms of funding and liquidity for yourself. And number five, you need to always be cultivating a list of people who want the things that you have. So let’s take it from the top here and dive into each of these five things in just a little bit greater detail.
Number one, always be marketing. Now you’ve heard me talk about various aspects of marketing for off market seller leads many, many times on this show. In fact, some of the earliest episodes of this show back when we were called Sleaze Free Real Estate Investing, we’re dedicated to deep diving into the processes of marketing. And I talked a lot in there about a metaphor of fishing. And the fishing metaphor was like this, that there are kind of two ways that you could go fishing for the properties that you want to buy, or in more reality, we’re actually often fishing for the people that we might buy properties from. But there are two ways: there’s fishing with a spear and fishing with a net. Fishing with a spear is like walking around your town and saying, I see that property that one right there 1234 Main Street very specific, I want to buy that property. So I’m going to now market and reach out to that seller in a way, that is just a one on one custom to them. The other type of fishing is net fishing, where we cast our net into a pond that we think is stocked with the type of fish that we want to catch, and we drag our net through the pond, and then we pull the net up and we see what we caught. And then based on what we caught, we decide what to do with that fish. So both of those work, and both of them should be done, I would say simultaneously; net fishing is going to give you higher volume, certainly but spearfishing is going to help you get the specific properties that you really, really want to buy.
But as I’m famous for doing, I like to mix my metaphors a little bit. So I also talk a lot about planting seeds. And that’s really what your marketing does your marketing is planting seeds. And why do we say planting seeds? Well, because when you send someone a thoughtful letter, that letter is worth keeping. And many of the people who receive it will say to themselves, this seems like a nice reasonable person, but now is not the right time. And so I’m just going to hold on to this letter, I’m going to stick it in a little folder, put it in my filing cabinet, for when the time is right. So if we are always marketing, that means we are always planting seeds. And the thing about seeds is that some seeds sprout quickly, some seeds sprout a little bit slowly, some seeds sprout very slowly. And of course, some never sprout at all. But if we’re always planting seeds, then we know that at any given moment, we might have a seed that we planted say two weeks ago, two months ago or two years ago, that is about to sprout. So when we’re constantly planting seeds are our phone eventually will constantly be ringing with the seeds that we previously planted with those sellers. So the thing that we need to do number one is we always have to be marketing, you can’t just start marketing, when you are needing a deal that by then it’s too late. And this is exactly the same lesson that applies to any business to be honest, you could be a freelance writer. And if you wait until you’re out of work to start marketing, you’re going to create a lot of peaks and valleys in your workflow and your work cycle and you’re going to be feast or famine, you’re gonna have too much work and then you’re not gonna have enough and you’re gonna have too much and not enough. And the same thing is true for your deal flow. So in order to go full time, number one, you have to always be marketing.
Number two, we always have to be following up. Right, so we plant our seeds with our marketing, and those seeds sprout. And when those seeds sprout, the seller gives us a call. But every time the seller gives us a call doesn’t mean that they’re really ready to take action in that exact moment. Now, sometimes they are. But oftentimes they’re not, especially with the type of marketing that we do. Because we’re not targeting people who are usually in a panic of some sort or in a distressed situation. We’re reaching out to people who we think have a good likelihood of being sellers eventually, but maybe not exactly at this urgent moment. So people call us we have a conversation with them, and we build rapport with them. But the moment isn’t always right for them right then either. So we often have that as a pretty healthy list of leads, who have called us back from our marketing, who we know are potential future sellers, but the time isn’t right for them. So we have to be following up. So if we want to go with our seed planting metaphor, this is like watering the seeds, we always have to be watering the seeds of the people we’ve already talked with, and fostering those relationships. And, you know, we want to make sure that our name and our message and who we are is always somewhat top of mind for the seller. Now we don’t have to be calling them every day that would probably be way too much. But even if you have a seller who now is not the right time, and you don’t know exactly when the right time is going to be every month or so it’s a good idea to make sure that you’re in contact with them through some medium, whether it’s a phone call or an email, or a follow up handwritten card or something along those lines, to make sure that they don’t forget about you so that when the time is right for them, you are the first person at the top of their mind. So while number one was always be marketing to create new leads, number two is always be following up on the leads that we have created. Now, number three is a pivot here.
Number three is not so much about creating leads, it’s about how we perceive leads, once they come to us. And in this in this thing that we have to be doing all the time, that is we have to be analyzing our leads from multiple perspectives every time now, I call this the Triple Threat Acquisition Strategy. And we have a whole episode on this much earlier in the show as well. Back in some of the early days, some of the first few episodes of Sleaze Free Real Estate Investing. And the Triple Threat Acquisition Strategy to be specific about it is the strategy in which every lead that comes to you, you look at it through three lenses, you look at it and evaluate the opportunity that presents in three different deal types. Number one is what if I were to buy this, hold on to it and rent it out over the long term? How would that look? Number two is what would what would it look like if I were to buy this, maybe fix it up a little bit and quickly resell it. This is sort of our flip kind of analysis. And then the third one is what if I just took this deal that I’ve negotiated and I nicely hand it off as a ready to go package to somebody else, this would be something that would be more along the lines of what most people would call wholesaling. And if we look at every deal through all three lenses, then we always have a holistic perspective on where the greatest opportunity with that deal lives.
Now, this relates to a topic that we call deal mix. Deal mix is like each person’s unique recipe for the types and amounts of deals that they need to do of each variety. So for instance, I am a guy who’s married, my wife works, we don’t have kids, I have the luxury of thinking a little bit more long term, I’m not worried about paying for next month’s school supplies and tuition. And you know, the clothes that they’re outgrowing and a new bicycle and things like that. So I don’t necessarily need as much day-to-day money to live my life. But I can think longer term, whereas you or somebody else listening to this might have three kids and it might just be much more focused on making money for today, because that’s the priority at the moment. Because Yeah, the bicycles too small, now, the shoes are getting too small, and the pants look like they you know, somebody is waiting for a flood because the kid has outgrown the pants. So that’s a different type of deal mix. So for me, I might be able to buy three rental properties, and then flip one and maybe wholesale one a couple times a year. Whereas you on the other hand, you might be saying I need to flip three and for every three that I flip, I’ll wholesale two and for every two that I wholesale, I will buy one long term rental property. And that’s okay, because that’s your recipe, I have my recipe and we each have our own deal mix. It’s kind of like a food recipe, you know, one type of cookie takes two cups of flour, one cup of sugar, and a teaspoon of honey. Whereas another type of cookie takes one cup of flour, you know, two cups of sugar and five teaspoons of honey right just making that up, of course, but every recipe is different for every person that’s different. But if you are prepared to do different types of deals, then you are going to be set up well to have a deal mix that is going to facilitate the life that you need to meet your financial needs. So number three, is be ready to employ the Triple Threat acquisition strategy.
Number four is to always be cultivating private money and other sources of cash and liquidity. So there are if we want to talk about ingredients, you know, there are several ingredients to our recipe overall, as real estate entrepreneurs, we need product right that’s properties we need money that could come from sellers could come from private individuals, it could come from banks, although that’s certainly not our favorite route. It could come from lines of credit, credit cards, personal loans, from friends and family, self-directed IRAs from other people, or lots and lots of other things. But the point is that we always need to be cultivating private money and solutions. And of course, the best time to line up money is when you don’t really need it, especially if we’re just talking about liquid cash so that you are agile and ready to pounce on the opportunities that you create. Right. So if you need a line of credit, in order to be able to take advantage of an opportunity, it’s best to arrange that well in advance of ever needing to actually utilize it or tap into it. The same would be true of lots of other types of relationships.
Now, there are lots of people that you need to be cultivating these relationships with as well and understanding what types of things are, they looking for, right? So if you are cultivating relationships with people who have, let’s say, self-directed retirement funds, and you are always in the process of understanding what types of deals opportunities, financial dynamics are those people interested in. So maybe you talk to you know, your neighbor, who is one of these people, and you find that that person is very, very risk averse, they’d be interested in, in loaning money secured by a first deed of trust on real estate. And they really only want 4% interest as a return because their alternatives they consider are one or 2%. But what’s very, very important to them is that they have a 50% loan to value type of collateral agreement. So that person is going to be a great candidate for a certain type of deal. On the other hand, you might have yet a different relationship with a person that has a very different way of looking at everything. And they say, you know what, I’m pretty happy putting my money in the stock market. And my mutual funds have generated an average return of 5% in the last several years. So if I’m going to deviate from what has worked for me already, I’m going to need to have a higher rate of return and shorter terms. And so that person might be your 8%, lender, and nine-to-12-month terms, which would be a great resource for flips and things along those lines. But at any rate, whatever those people want, it’s important to always be cultivating those relationships, understanding what they want, keeping them up to date with the types of projects that you’re doing, so that they can see your track record unfold in front of them before they ever actually decide to do business with you, etc. So number four, is always be cultivating private money and other sources of cash and liquidity well in advance of ever actually needing to use them.
And number five, is always cultivate a list of people who want what you have. So in some ways, real estate is about matchmaking, right? You know, even a realtor is kind of a matchmaker, right? They have a seller, now they’re looking for a match of a buyer or they’re looking for a match being an agent who has a buyer, a wholesaler would be an example of someone who’s making matches as well, right, they’ve got a seller, they’re looking for a buyer, they’re acting as a matchmaker. Now, you could even say the same as is true as a landlord, you have a rental property, it’s a particular type of product. Now you are trying to make a match with a tenant who’s looking for that exact type of thing to so at the end of the day, we’re really bringing people together to utilize our real estate. And we always need to know who is it who wants the kind of stuff that we are securing that we’re stirring up and that we are creating opportunities for. So that might be buyers, right? It might be a retail buyer. As an example, with a retail buyer, you don’t you might not know all of the retail buyers in your city, certainly, because there’s probably hundreds 1000s, or maybe even millions of them. But you do know that you are creating a product that somebody on that list is going to like because it’s you know, let’s say it’s a three-bedroom, two-bathroom house in a great neighborhood, you know, you are creating a product that those buyers are going to want and you’re letting the market bring that buyer to you. But a very different example would be a wholesale buyer, right? You need to go out and cultivate those relationships, very proactively directly one on one with them before you have something to send them right. So if you see that there’s a person who likes to renovate houses in a particular part of town, and you are out there cultivating that relationship with them saying you know what, I might have some things that seem to fit your target criteria in the future. Can I give you a call when I have that, or maybe you know, a home builder who likes to build in a particular area, and they’re going to be the person who wants what you have, if you know what they want, you can actually go out and search for that particular thing, right? You might know of a builder who likes to build infill homes and older existing established neighborhoods. And you know exactly how they do business and how they buy things. So now you go out actually searching for something specifically that you could wholesale to them, that would be a good example. Another totally different example is the users of properties, right like tenants. Let’s say that you have a list of people who are looking for small industrial space. So you go out and you’re creating opportunities with small industrial types of properties or you certainly know of residential tenants who want to live in a certain type of area. Now you’re keeping your eyes open for properties in that particular type of area that will fit them
Another way to look at it would be just, you know, like your clients. For instance, if you were a real estate agent, just as an example, and you had buyers who were looking for something particular now, you’d be trying to source the property that met their criteria. So you always need to be cultivating a list of people who want to use what you have. Because if you were out there, stirring up deals that you can tie up and you can put it under control. And maybe you can by yourself, but then there’s nobody who wants to utilize that property, that could be a problem. So simultaneous to always doing our marketing and stirring up our product opportunities, we always want to be simultaneously figuring out who is going to want the types of things that we go out, and we stir up.
So to recap, if you want to go full time as a real estate entrepreneur, you absolutely can whether that means you want to quit your other job and just do this full time instead. Or if you want to be a full-time real estate entrepreneur while you do something else. That’s completely okay. But there’s really five things that you need to have in place in order to be able to make that transition so that you have a constant progress, constant flow of deals, and you’re always having some sort of a deal in action. And those five things real quickly are always be marketing number one. Number two, always be following up with the leads that you have generated. Number three, prepared to use the Triple Threat acquisition strategy and look at every lead that you create every deal that you stir up through all three lenses of the Triple Threat acquisition strategy, so that you can decide which one fits your deal. Mix in that moment, in time, as best as you possibly can. Number four, always be cultivating private money and other sources of liquidity before you need them. And number five, always be cultivating a list of people who want what you have, that you’re generating the leads of on the product side of your business, make sure you’ve always got users and buyers lined up to take the things that you are creating with the sellers.
That is it for today’s episode of Racking Up Rentals. Again, show notes for this episode can be found at www.thoughtfulre.com/e80. Please do us a big favor by hitting that subscribe button in the podcast app and just take a second to rate and review the show I would be so grateful.
Did you know too that we have a Facebook group for us thoughtful real estate entrepreneurs? We do, it’s called Rental Portfolio Wealth Builders and we would love to have you join us over there. Please go to group.thoughtfulre.com And you will be redirected right to the group where you can hit that Join button.
If you liked this episode, please take a quick screenshot of it and post that to Instagram and tag us in your post. We are @thoughtfulrealestate all spelled out. I will see you in the next episode. Till then this is Jeff from the Thoughtful Real Estate Entrepreneur signing off.
Thanks for listening to Racking Up Rentals where we build long term wealth by being win-win dealmakers. Remember solve the person to unlock the deal and solve the financing to unlock the profits.