Today’s REI Classroom Lesson
You have to have a competitive advantage in this business! As Duncan Wierman reminds us, you won’t always be the best offer but if you have a competitive advantage, your offer might be chosen because you did something better or different than everyone else.
REI Classroom Summary
It can be your down-to-earth conversations or maybe your processes that set you apart from other investors putting in an offer, but it doesn’t always come down to price.
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 investment industry teach you quick lessons to take your business to the next level. And now, let’s meet today’s expert host.
Duncan: Hello I’m Duncan Wierman, and I’m the host today for FlipNerd REI Classroom. And I want to continue along the subject I have been talking about, and that is really identifying your competitive advantage.
Mike: This show is sponsored by passiverental.com.
Duncan: Because folks I’m going to tell you if you don’t have a competitive advantage as a real estate investor, don’t even compete. I learned that from Jack Welch. You have to stand out. You have to have an advantage. You know, when you get in this market, you want to start running hard, and you want to be able to pick up houses for houses for a discount. And I don’t care if it’s wholesale or retail, turn-key investments, you have to identify in the marketplace as the guy. And that guy has to have some advantage over everything else.
You see in the absence of any other value money is going to be all that matters. So if you’re in the wholesale game, if you want to buy properties, your offer is not always going to be the highest. Now how do you win those deals when your offer is not the highest? Well, you’re going to have to make up that gap in value somehow. And the only way you’re going to make up that gap is with your competitive advantage.
So you need to identify before anything else really what is your advantage over your competition or the buyer or the seller’s other options. Okay. This is how you’ll be able to bridge the gap between price because often you’re not going to have the right price. It’s going to be too high if you sell them. It’s going to be too low if you’re making offers. So if you focus on just price, it’s a race to the bottom line, and your margins get paper thin, and everybody is whining. And you can’t build a business that way. So you need to focus on that.
So when we talk about competitive advantage it doesn’t have to be huge. It’s just what matters to your prospects. So it could be the buying process or the selling process you take them through. Maybe you have a streamlined process to make sure they don’t have any hiccups, bumps in the road which is very easy for you. And it could be your conversation, “We’re down to earth. We sit down. We have face-to-face conversations. We don’t use real estate lingo. I won’t confuse you. I’ll make it super simple and straightforward.” It might mean that you take the time to understand their situation better than anyone else does. That’s your competitive advantage.
So it’s often going to be behind the scenes processes and the type of experience it leads to really for your prospect. You can’t compete on price all the time in this business. You’ll get killed. All right? Too many people are making offers that are ridiculous and overbuying, but if you have that advantage, you’ll look better. Hope you got that. And there’s only two ways to establish that competitive advantage. Do things better than others or do them differently.
So, guys, I hope you take that to heart today, and you can start thinking about that and really work on it. Okay? You can fall back on this. Put it in all your tools and all your greetings and think about how do you perform better outcomes for your prospects. Okay?
The bottom line is, whatever you do to attack your market, you need to know your competitive advantage. And you need to know your competitor’s advantages because you’re going to compete against them. So why does someone want to do business with you versus your competitor? Okay? And there are certain ways you can bring those out. So start writing things down. Put them down and put a dollar figure on those, okay? Start with the end in mind. Start with identifying your competitive advantage. That’s going to lead to more sales, more deals with higher margins, okay? Remember your competitive advantage, it’s got to be perceivable, promotable and something the market will pay for.
So thanks again. If you want more information on building your brand, getting more leads, doing more deals, and you like what you heard, come and visit my blog at duncanwierman.com/blog. Sign up for my 30-day awesome plan of marketing. I will change your business around. So thanks again. I’m the host today for FlipNerd’s REI Classroom and have a great day until next time.
Mike: Passiverental.com is your source for turnkey done for your rental properties. If you’d like to be an investor and not a landlord, please visit passiverental.com to learn how to purchase cash-flowing, professionally managed, rental properties in the hottest rental markets across the country. We can also help connect you with financing for your next property. Invest the easy way today and get started by visiting passiverental.com.
Please note that the views and opinions expressed by the individuals in this program do not necessarily express those of flipnerd.com or any of its partners, advertisers, or affiliates. Please consult professionals before making any investments or tax decisions as real estate investing can be risky.
Are you a member yet of realestate.com, the hottest real estate investing social community online? If not you can join for free in less than 30 seconds and get access to hundreds of off-market deals, vendors and your market to help you and your business. And you can start networking with thousands of other investors just like you. Get your free account now at flipnerd.com.
Please check out the FlipNerd family of real estate investing shows where you can access hundreds of expert interviews, quick tips, and lessons from leaders across the real estate investing industry. They’re available at flipnerd.com/shows or simply search for FlipNerd in the iTunes store.