When I was just getting started as a wholesaler, one of my greatest fears was that I was not going to be able to estimate repair costs accurately for my end buyers. I had no prior rehab experience, and the thought of learning the costs involved in rehabbing an entire house was extremely intimidating to me.

What I soon found out was that rehab estimates can vary greatly from investor to investor, depending on what their exit strategy is.

For example…some buyers prefer to rehab properties from top to bottom and sell to retail buyers, while others will only do the minimal amount of repairs necessary to get the property ready for a renter. The rehab estimate for the rehabber is obviously going to be quite a bit more than what it would be for the landlord.

For this reason, when I am presenting a deal to my end buyers, I do not usually include an exact number for a rehab estimate. Instead, I give them a general idea of the condition that the house is in, and let them come up with their own rehab estimate when they go out to inspect the property. Most seasoned investors prefer to do their own due diligence, anyway, and will not be relying on my numbers to make their final decision.

While it is always a good idea to learn as much as you can about the costs involved in a rehab, just keep in mind that as a wholesaler, it is not an absolute necessity to have every single cost nailed down to the penny.

Photo Credit: juhansonin

This Article is Copyright © 2004-2009 BiggerPockets, Inc. All Rights Reserved.

Wholesaling and Repair Estimates – You Don’t Need to be an Expert!

Having a mission is important. To run a successful business, you need to be on a mission. Yet many of us small business owners (particularly real estate investors and professionals) skip writing a mission statement. Companies put their mission statement on the wall, not because it’s cheesy but because it’s important. Actually, many company mission statements are cheesy, but having a good one is a good idea. Think of it as your foundation.

Building a successful business requires a strong foundation, especially today. Opportunities come around every day. Do you take this new client? Should you join this new social network? Should you take your company in this direction or that? If you refer back to your mission statement, you ought to be able to answer questions like this pretty swiftly and with certainty.

If you don’t have a mission, then you don’t have any objective means of maintaining any consistency. And if you have employees, managers or anyone who makes decisions on your behalf, then you definitely don’t have any way of keeping a cohesive brand together. Not without a mission.

What is your mission?

Writing a mission statement may sound pretty simple, so it’s easy to overlook how important it is. But sit down to write one. It’s more difficult than you might expect. It’s one thing to be able to write posts to your blog on a regular basis, build your friends list on Facebook, etc…the day to day stuff of building your presence online. But what exactly is it you’re building? Have you thought to consider it?

A tweet came through my feed on Twitter this past week. I think it was from Chris Brogan or someone like that. It’s buried now, and I can’t find it, but it was basically something like “describe your brand, what you do, what you’re about in 140 characters or less. Can you do it?” This is a mission statement.

• What are you about?
• What are you building?
• What drives you?
• Why are you doing it?

Answering these grandiose questions in a line or two is difficult, but that’s why it’s important.

Why You Need a Mission

You need a mission for one reason…NOT having a mission means you’re drifting. From a business perspective, you’re a ship out to sea without a sail. Without a mission, you have no brand. Not really. At best, your brand is an accident. You need something as a foundation.

Notice that my assertion here is that a mission simply gives you a sail. It’s essential, but your mission statement is not going to be what differentiates you or makes you the best at what you do. It’s simply a building block. No one is going to do business with you solely because of your mission statement. But it needs to be there.

It’s important to have a mission, but it doesn’t matter what mission you choose!

All that matters is that your mission speaks to you. On a fundamental level. It needs to excite you, but it also needs to do more than that. It needs to drive you. It’s beyond excitement; it needs to be primal. It can be pretty, but you have to mean it!

An Example of a Bad Mission Statement

To satisfy our customers’ desires for personal entertainment and information through total customer satisfaction

I found this on Seth Godin’s blog and I agree 100%. What the hell does this even mean? Ha.

Is it wrong of me to assume that this doesn’t really speak to someone’s heart? Is some manager somewhere really busting ass to make this happen every day as if his life depended on it? Seriously, I doubt it. This is an example of a mission statement with nothing behind it. Ironically, (although I can’t verify this) it also probably cost the company thousands of dollars for some troll to produce it. Someone who has no ownership interest in the company. Bad move.

Do you run your company? Don’t outsource the writing of your mission statement…it completely defeats the purpose.

An Example of a Rocking Mission Statement

Google’s mission is to organize the world’s information and make it universally accessible and useful.

Just my opinion…this mission is engaging and exciting. Also, it doesn’t ramble on with useless corporate-speak and unnecessary verbiage. It’s clear and ambitious. To me, this is a mission. It’s frickin huge, and that makes it all the more appealing, but it’s also very targeted. You could stay busy for a while with a mission like that…

It’s not about the mission statement itself. The process of writing your mission statement is almost more important than the actual mission statement you produce. The fact that you can refer back to it is invaluable, but the process of coming up with your mission statement should be a soul searching experience. It should take you a minute, you know? Think about it, write it. Live by it. It should be something more than exciting to you. You should love it. After all, you’re going to be working day and night to make it happen. Make it a good one.

Do you have a mission statement? Do you agree or disagree that it’s vital to have one?

This Article is Copyright © 2004-2009 BiggerPockets, Inc. All Rights Reserved.

Why You Need A Rocking Mission Statement

(This blog post is for the newbies, but for those who have crossed the line into actual real estate investor, I believe there’s something in here for us all!)

As someone who was an inexperienced real estate investor only two years ago, I can completely relate to the challenge of moving from an aspiring real estate investor to an actual real estate investor.  It’s a daunting process for many.

You may be feeling overwhelmed by any number of obstacles…

• No money and/or bad credit
• Information and sales pitch overload (typically leading to analysis paralysis)
• Fears of losing money, doing something wrong, ticking off a spouse, or accidentally doing something illegal

I’m currently reading a book by author and multi-millionaire entrepreneur Dan Kennedy, titled No B.S. Time Management for Entrepreneurs and there’s one specific thing he said that inspired this post:

“When you focus your self-discipline on a single purpose, like sunlight through a magnifying glass on a single object, look out! The whole world will scramble to get out of your way, hold the doors open for you, and salute as you walk by.”

A key to your success in moving from “aspiring to actual” real estate investor is within that quote – self-discipline on a single purpose. In other words, laser focus.

If you’re feeling stuck in a seemingly unending “aspiring” spiral, I want to urge you to take the next 7 days and immediately do the following things to help you practice self-discipline on the purpose of being a successful real estate investor:

• Today, Day 1: Determine your “why”. Why are you looking to do real estate? What’s the end goal? What is it that you’re seeking to achieve that makes you so excited and gives you the drive to keep at it and crush any obstacles you may face? You have to start with the end in mind. Don’t move forward unless you’ve done this.

• Day 2: You know that there a ton of ways to get started in real estate…you’ve already spent days, weeks, or maybe years consuming information on these various ways. Pick one! The options are limitless…you can focus on absentee owners, short sales, free & clear properties, subject2 deals, lease options, wholesaling or doing rehab flips with distressed properties, probate and estate deals, I can go on and on (and on and on). All of these ways have worked successfully for hundreds, even thousands of investors so just pick one that feels right for you. [Word of caution: If you’re looking to start off with buying & holding for passive cashflow, please make sure you have reserves to deal with vacancies, termites, other maintenance issues that will come up.]

• Day 3: Evaluate the Real Estate Investing related e-mail lists that you’re on – pick your favorite 1 (no more than 2) that is directly focused on your area of real estate investing interest and unsubscribe from all the rest. You simply cannot afford to be listening to every new webinar, compelling story, and sales pitch.  Almost all of it sounds good…in fact, quite a bit of it is good and working well for people!  But you can’t do it all. Not right now. Laser focus…remember?Once you’ve moved to actual investor, feel free to add some of these back on if you’re looking to branch out into other areas to diversify your investing experience and increase your profits…the lists will still be there (and if not, thank goodness you unsubscribed!).

• Days 4-6: You’ve picked a real estate investing focus. Now put a plan in place. What are you going to do in the next 30-60-90 days to make progress?  What will you accomplish in that time and what resources do you need to get it done?

People may disagree with me, but I strongly believe that you should have at least a little operating capital if you’re going to do real estate investing. Depending on your strategy, it can take anything from a small investment to a pretty significant one. Even if you’re low on cash and need to focus on a very low budget strategy, that’s fine. Just know that even the littlest things cost money – paper, stamps, gas to drive around looking at houses, signs, a domain name for a website, etc.  This stuff is not free. Don’t let that be a discouragement.  You have a plan…so figure out what you need financially to support that plan and hustle and make the necessary sacrifices to ensure you have what you need.

• Day 7: Commit to do something every single day for at least 30 minutes that will help you move forward on your real estate investing goals.  If you’re taking massive action and have some rather aggressive goals, you’ll need to spend more than 30 minutes daily on this, but hey, you have to start somewhere. Just be careful to spend more of that focused time doing, rather than talking about it (or socializing with others who may or may not be doing).

Bottom line, this is an excellent time to be involved with real estate investing, so I urge you to get off the sidelines and play – just stay focused, be willing to keep learning, don’t let obstacles trip you up, and keep taking massive action!

Here’s to your success!

Image: Photographer: Gregory Szarkiewicz via FreeDigitalPhotos.net

This Article is Copyright © 2004-2009 BiggerPockets, Inc. All Rights Reserved.

A 7-Day Plan for Aspiring Real Estate Investors

I was driving around Baltimore City earlier this week. At a stoplight I got stuck behind an SUV with a sticker on its back window that read “lose 10 pounds in 10 minutes, call XXX”.

I immediately laughed and thought to myself, “yeah right.”

Why did I think this? Because it wasn’t honest and it wasn’t believable. If you surfed the Internet right now you would come across a lot of hyped up ads like “look 20 years younger in 5 minutes”, or “become a real estate millionaire in the next 30 days,” or “build huge bulging muscles in one week.” All of those ads sound way too fake.

So the question you need to ask yourself is “do my marketing materials sound fake and over-hyped?” If they do, you’re probably losing a ton of deals.

You see, we are already in a business where people are skeptical. It’s no secret that real estate investing draws a lot of crooks and con artists out of the woodwork. So the last thing you want to do is sound like one of these fly-by-night company’s.

So how do you fix this?

I saw an excellent example last week from one of my partners who showed me his new business cards. On the back of card reads the following message. “Although I cannot guarantee I will buy your house, I can promise you I will do everything possible to provide you with a solution that will meet your needs.” That my friends, is a brilliant line because he comes across as honest and friendly. He doesn’t say “I’ll buy your house within 24 hours no matter what, guaranteed.” That sounds more fake and unbelievable and people will be skeptical and want to know what the catch is.

Let me show you another good example of this and how it has helped me close many deals: Occasionally I will have a seller ask me if I’ve ever backed out of a deal, or what would happen if I didn’t close as promised. And I tell the seller that I’ve always honored all aspects of an agreement. But that I have had deals not close when a seller backed out and did not hold up their end of the agreement. Then, I show them a testimonial where a lady backed out of a contract and then later sent me an email saying she wished she had sold her house to me because other people were dishonest and she ended up losing the property.

That testimonial is golden and shows multiple things:

First, that I’m not going to force her to sell her house and sue her if she doesn’t sell once we have a signed agreement (it’s not worth my time.) Second, that someone who backed out on me wished they would have worked with me and ended up losing their home. So… if this seller ever had second thoughts they would think back to that testimonial and think “I don’t want to back out and lose my home and money like that other person did.”

Here are a few other examples of how to be more honest and believable:

In your marketing pieces put key phrases such as, “now I can’t guarantee we can buy your house, but if you take advantage of our free 10 minute consultation I’ll give you the best solution for your property-even if it doesn’t involve our company.” Or, when you’re meeting with a seller and they ask you a question don’t sound hypey or fake. Say “yes Mr. Seller I have had deals not close. One time it was because a seller didn’t want to sell. The other time is was because the property had a lien against it and we couldn’t get a clear title.”

Needless to say, I can’t guarantee the above will help you make more money this year… but I can promise that if you come across more friendly and honest there’s a darn good chance you’ll become more successful.

Photo Credit: wwarby