Today’s REI Classroom Lesson
Today, Larry Goins discusses how to scale your business with team members, since you can’t do everything.
REI Classroom Summary
Larry explains what positions you’ll most likely need help in and how he brought on team members one by one to fill these needed positions.
Listen to this REI Classroom Lesson
Real Estate Investing Classroom Show Transcripts:
Mike: Welcome back to the flipnerd.com REI Classroom where experts from across the real estate investing industry teach you quick lessons to take your business to the next level. And now, let’s meet today’s expert host.
Larry: Hey, this is Larry Goins, and welcome to another episode of the REI Classroom. I’m really excited today. We’re going to talk to you about scaling your business. This is something that a lot of people are talking about right now, scaling your real estate business.
Mike: This show is sponsored by passiverental.com.
Larry: See, in real estate we all start out doing it all ourselves. We do everything, all right. There’s going to come a time when you will not be able to do it all. There’s no way in the world you can scale by yourself. In addition to all of the vendors and everybody you need, whether it’s a realtor or a private money lender or an appraiser or an attorney or title company, regardless of who it is that you need on your team, you still need people inside your office or on your interior of your business to help you scale as well.
First of all, to talk about scaling you need to know the different components of your real estate. Number one, you have marketing. You’re probably starting out marketing for sellers whether it be direct mail, bandit signs, Craigslist, whatever. Somebody’s got to handle that marketing.
Starting out it’s you, which by the way I strongly, strongly, strongly recommend that when you start out you learn to do everything yourself. Don’t depend on somebody else knowing what to do if you don’t because that’s the kind of person that could take advantage of you. You need to know what to do before you start scaling your business yourself.
Number one, you have marketing. That makes the phone ring. Marketing is anything that makes the phone ring. They opt in to your website. They call. It goes into a voicemail system, goes into your Podio or whatever. Once the phone rings then it goes to either a lead management, which could be part of marketing, or to you the acquisitions person. You’re going to pick up the phone or you’re going to listen to a message, call them back, whatever. You’re doing acquisitions. You’re analyzing the deal. You’re determining what you can pay. You’re making the offer. You’re negotiating back and forth and back and forth. That’s the second thing, acquisitions.
Next, you have sales. Once you get a property under contract, you’ve got to have somebody to sell it and that’s you starting out. After sales, you’re the one that’s going to show the property if you go out and show it, or you put a lockbox on the door or whatever. Then, once it sells, you have to have somebody handle the closings dealing with your private money lender, your buyer’s lender, the attorney and title company, ordering title search, getting everything lined up for the closing. Then, you need somebody eventually in accounting/finance. Accounting and finance is a very, very important role because that’s the one that’s going to help you manage the money. You have money available to close your deals and all that good stuff.
When I first started out, I did it all. I did it all. Then, what I did, I hired somebody to do acquisitions and sales. That one person did two things, and closings actually. They did all three things. Then, after a while I separated it out. I still did the marketing, but I separated out acquisitions and sales. The acquisition person would handle all the leads coming in. They would get the properties under contract to buy. The sales person would handle the sales and then they would handle it all the way through to closing.
Then, once I started doing enough deals where I didn’t want my sales person focusing on closings, I hired a third person which is a closing coordinator. Then, eventually we had accounting, and now we actually have two people in accounting. We have multiple people in acquisition and sales. We handle marketing in-house and we’ve got a couple of V.A.s. We can literally make a couple thousand offers a week now on properties and buy and sell a lot of properties.
I hope this will really help you, because . . . Listen, there are several different ways you can do this. You can hire people in-house, commission only, they can be independent contractor, they could be an employee, and you can have a virtual assistant. In order to get to the level that you want to, you’re going to have to learn to scale your business. But learn to do everything yourself first. That’ll really, really, really help you.
If I can help you in any way, please don’t hesitate to reach out to me, larrygoins.com. Thanks a lot for watching, and I’ll see you on the next REI Classroom.
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Please note the views and opinions expressed by the individuals in this program do not necessarily reflect those of flipnerd.com or any of its partners, advertisers or affiliates. Please consult professionals before making any investment or tax decisions as real estate investing can be risky.
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