Build Your Business to Your Preferences
There are literally thousands of ways to invest in real estate.
Just pull up a search on Google and you’ll see just a sliver of the thousands of niches out there: multifamily investing, flipping single family, wholesaling, turn key rentals, property rentals, mobile home investing, note investing, note creation, flipping apartments, flipping land, new build, commercial units, industrial units, mobile home parks…and many more.
That’s just a scratch-on-surface. Each one of those have even further subtopics.
It can get overwhelming. Choosing the right niche for you can be daunting. So, if there’s anything I can teach you today, it’s how to choose the right real estate investing strategy that fits YOU, using…
… your goals, personality, and strengths.
To illustrate, how choosing the wrong business/real estate investing niche can mean a whole lot of stress, here’s my story:
Pulling my hair out with my businesses
I’ve been through 3 different real estate niches and I realized how much I hated all three. I started off in Real Estate Investing (REI) because of the Robert Kiosaki book, “Rich Dad Poor Dad.” At first, I just wanted to buy a few property investments for a more financially-secure future. But, it quickly led to falling into the rabbit-hole of “real estate investing”; learning all the thousands of ways you can make money with real estate.
The shiny-object-syndrome kicked in and the next thing you know, I’m sending a thousand direct mail letters a month, knocking on doors of people who are in foreclosure, and cold calling to find a great Single-family-house deal to wholesale and/or flip.
To make a long story short… after one year-in-a-half of that wholesaling and flipping journey, I found myself flipping mobile homes instead… then flipping land. Those two were great profit generators, but I ended up not loving it (and even hating some aspects of it):
- I hated trying to create a volume business out of it.
- I didn’t want to be always searching for deals just to make ends meet.
- I hated managing people.
- I hated chasing sellers.
- I hated chasing buyers (for land).
- I hated managing other people’s money on a consistent basis.
Now, doing deals every once in a while for the passive income interested me… but I didn’t want a month-in-month-out business where I had to build a team of VA’s and sales agents and had to find deals every month (or hire people)… to survive
Choosing the right real estate investing goals
I’ve gone 180 degrees from when I started in real estate investing in 2015. I started off wanting to build a passive income stream of rentals, to wanting to build this business of flipping single family, to mobile home investing, to land flipping…. and now back to building a portfolio of cash flow assets.
Today, I hold a small (but decent) portfolio of notes that produce a few thousand dollars of passive income a month. However, if you would have asked me what I wanted to do when I first started…I would have never thought I would hold notes secured by mobile homes and land.
Go deep with your goals in real estate investing
It was only until after 4 years into investing, did I figure out what I really wanted.
At this point, I’ve already invested in mobile homes and land, and attempted wholesaling and SFR flipping. And, it was only after, where I realized that my only goals in REI, is to create a security of passive income. I’m not looking into creating a large busy business with employees constantly looking for deals and constantly selling.
Knowing your goals is extremely important. But think hard about it. Many don’t really know what their true goals are. They get into real estate because they want more money… but what does that really mean?
- Some want to use it to replace their jobs (in that case you’ll need to be a solopreneur with a volume business… or build a team)
- Some want to have a secure passive income, like me (in this case investing for the long run with rentals/notes, is best)
- Some just want a better return on their money that’s sitting in their Self-directed IRA, or bank with no extra work (in this case, lending to other investors or buying notes is their best bet).
Knowing what you really want (and what you don’t want) out of REI is your first step to choosing the right niche.
In my case… I didn’t want to manage a team, or manage OPM (other people’s money), or constantly chasing sellers/buyers every day.
Sounds like the lazy way?
Well, maybe more like the “slacker way”… but there are millions of ways to make money in life… and managing a high-performing business that flips a high-cost product, didn’t fit with my goals: create passive income for financial security. I don’t need the big-business to achieve that; just a few/couple of new investments every year or so.
So, know your goals in life, and see how real estate investing can fit into that… not the other way around.
What are your desires and goals?
Personality type affects your choice
Is the Myer-Briggs Bull?
I used to believe all those personality quizzes where a bunch of B.S. I was skeptical as hell with all that woo-woo personality “junk”.
But, I’ve been a “believer” ever since the Meyers-Briggs personality got my profile right every single time. When I took the personality test at www.16personalities.com I was blown away on how accurate the profile was. Once I started to “know myself” from reading and understanding the profile of my typology my frustrations and my struggles made sense.
The struggles make sense
There are certain things that you hate doing… that you’re naturally good at… that you have weaknesses in.
This naturally leads to what you enjoy doing, and what you hate doing. For example, because of my INTP personality, I’m not suited to be a very good manager (and years of “managing” people has proved this right 100%). No wonder I dreaded managing a rehab team. So, it would make sense to keep away from a business where I have to manage extensively.
If you’re an INTP, or something similar, your personality leads you to be a casual investor (a type that only wants to buy one house a year). However, because you’re always thinking up new projects, being stuck as a solopreneur would mean hell to you because your busy night and day working on minute tasks (it would drive you nuts).
Anyway, these are just my examples. Where you fall into this highly depends on your personality. Go ahead and take that test and see where you fall. Then read more about your profile and learn about yourself… you’ll be surprised.
Here is an article from Entrepreneur magazine that further explains personality type in business: What’s your entrepreneurial personality type?
Know yourself inside and out
“Know thyself” – What you hate doing, and what you enjoy doing. Every business is different, and every person is different and not suited for every kind of business structure out there.
To emphasize this, Let me paraphrase the famous Ken McCarthy (the father of internet marketing), “Very few people will be happy if they ONLY follow the money…. Follow first the good markets, then do what you enjoy.”
Finding out what you’ll enjoy doing in REI takes, first, some research to figure out what each strategy demands and second… it takes some time to figure out what you’re good at (through taking action and experiences). Nothing in business is done right the first time. It’s gaining some experience. In my example, I didn’t know what I wanted until I jumped into investing and through experience figured out what I didn’t want.
Goals and Personalities
To summarize all this:
1. Find out what you really want in life.
If that’s to travel the world while getting enough passive income to support your lifestyle and you want to do it in 5 years… Great! Now, find, and list, the real estate investing niches that can accomplish that and create a plan of action.
2. Evaluate your life
This is something that wasn’t discussed in detail in this article but look at your money-position before you jump into anything. Are you in debt, have no money saved, with no income? Then you might have to fix that first. Real estate isn’t going to fix your problems today. Figure out how to get yourself out of the hole then jump into entrepreneurship.
3. Know yourself
Know your personality type and how it can affect certain real estate investing strategies. If you’re an INTP like me, “casual” investing to build a long-term portfolio is what I prefer rather than a big flipping business where I need a team. If you’re an extrovert, you’ll do very well going to many network meeting, building teams, speaking with many sellers directly every day, and being out there rubbing elbows with as many people as you can.
An introvert can still be a great active real estate investor and salesperson, but you’ll have to tweak it to your preferences and it will take time to develop the energy-draining skills of salesmanship.
4. And finally… follow what you enjoy rather than the money. This is NOT to say follow your “passion.” Following a passion is a terrible plan because your passions change, and passions don’t always equal profits. But, find what you enjoy doing by examining your strengths and your goals.
There are hundreds of ways to invest in real estate, it’s just a matter of finding that niche that fits you.