"Beginner’s Guide To Part-Time Real Estate Investing"
There is no denying the potential buried within the landscape of real estate investing. It is a career path ripe with opportunities for those that are willing to take the chance. It is perhaps one of the most lucrative businesses for anyone that approaches it with the right mindset and a proper education.
If you are interested in investing in real estate, but lack the time or resources to commit full time, consider the prospect of part-time real estate investing.
The Basics Of Part-Time Investing
So how does one get started investing on a part-time basis?
Part-time investing, as its name suggests, is a strategy implemented by investors who don’t want to commit to the housing sector completely. Instead of relying on real estate as their sole source of income, part-time investors typically supplement their nine-to-five with profits from real estate investing. That’s an important distinction to make: as a part-time real estate investor, investing isn’t treated as a priority, but rather a complement to one’s personal career choice. Literally, only part of their time is dedicated to investing. Conversely, full time investors will focus all of their attention on investing; their profits are most likely the result of real estate, and nothing else.
Due, in large part, to the amount of hours part-time real estate investors typically spend working in the real estate industry, it’s in their best interest to be as efficient as possible. While it is possible to flip homes as a part-time investor, most tend to focus on exit strategies that don’t require as much time. Wholesaling, for example, is the perfect exit strategy for part-time real estate investors because the amount of time required to complete a wholesale deal is considerably less than a flip.
There are many ways to increase your productivity and boost your career without quitting your day job. Working with a partner, using technology and automation properly, using downtime to build up your investing knowledge, and focusing on the tasks that deliver real value to your business are all great ways to build momentum in your business.
Here are four tips for giving your investing career a full-time boost, even if you’ve only got the hours to spare for a part-time real estate investing effort:
Find A Partner
Though working with a partner is not ideal for every single first-time investor, there are numerous advantages to working within a real estate investing partnership, especially when starting out. For one, there’s the simple division of labor; two people putting in extra hours can usually propel a business farther, and faster, than it would otherwise under a single owner.
There’s also the benefit of expertise, especially if you’ve chosen a partner who has a different skillset and personality than you. Perhaps one of the biggest benefits of all is the accountability that has become synonymous with partnerships. Working with someone that depends on you is a great motivator, and can’t be underestimated.
Automate & Outsource
There is one key lesson that every entrepreneur must learn (not just real estate investors): just because you can do something, doesn’t mean you should. The same goes for those trying to launch an investing career when they have little time to spare.
If for nothing else, starting a career in the real estate industry requires focus and clarity. One must automate their business as much as possible if they hope to spend their time in the most efficient ways possible. If you hope to free up more of your time to spend it where it really matters, try the following:
Automation Tools: From call-forwarding apps to email autoresponders, there are a number of tools a part-time investor can use to help them focus on the basics of investing. Use email blasts to reach a wider audience without spending any more of your own time, or use a phone service that allows you to easily manage incoming messages. Anything that frees up more of your time is almost always a great idea.
Specialists: Instead of feeling like you have to learn every aspect of the real estate investing business—such as advertising, bookkeeping or property management—utilize the experts of others far more knowledgeable than you to save you time and free you up to build a more efficient business.
Virtual Assistants: Whether it’s mailing postcards or posting on Craigslist, your investing business has vital functions that can (and should) be performed by someone else. Make a list of all the systems crucial to your business that can be outsourced to others, and watch your productivity skyrocket.
Learn In “Sips”
When starting out as a residential redeveloper, it’s easy to get frustrated by the lack of available time to brush up on the basics of investing. However, becoming a successful real estate investor will require entrepreneurs to become more efficient with their time. As a result, today’s investors (or those looking to become investors) should learn in “sips,” or small blocks of scheduled time.
In fact, one of the best ways to boost your real estate investing IQ in short order is to look for periods of downtime—such as on your morning commute—and add an educational component. Listening to a podcast in the car is a great way to maximize your own learning potential.
Find Your 80/20
The Pareto principle, named after the Italian economist Vilfredo Pareto, suggests roughly 80% of the effects come from 20% of the causes. In other words, it has been theorized that 80% of one’s accomplishments are the result of 20% of their work. While this can certainly be frustrating, as a part-time investor it can be liberating to know that more hours (and more effort) isn’t necessarily needed to push your venture forward. Consequently, today’s most prolific investors know success is the result of finding the 20% of causes in your business that will deliver 80% of the effects. This means taking a look at every activity in your business and asking questions such as:
Which 20% of my leads make up 80% of my business?
Which 20% of my marketing directly translates to 80% of my conversions?
Which 20% of my daily activities lead to 80% of my productivity?
By pinpointing the exact activities and processes that deliver the best results, you’ll have the ability to focus your energy on the tasks that really move the needle in your career.
Time-Saving Hacks For Part-Time Real Estate Investors
Investing in real estate on a part-time basis emphasizes the importance of time allocation. Every minute you spend as a part-time real estate investor is that much more precious for one simple reason: scarcity. You simply don’t have as much time to invest in the real estate end of things as a full-time investor does. With that in mind, you need to make sure your time is spent wisely.
Go In With A Plan
Investing in real estate part time is not unlike any other business: it takes self-discipline. Hard work comes with the territory, but it is your discipline that will set you apart from the rest. That said, it has never been more important to have a workable business strategy to stick to until your goals have been met. A proper business plan will work to your strengths and keep you on track. The second you stray from your predetermined plan, you will be wasting time; the one thing part-time investors can’t afford to lose.
Implementing a business plan will not only save you time and money, but also establish a solid foundation to build the rest of your business on. With a sound plan in place, you are free to grow as much as your aspirations will permit. Set aside one day to make a business plan, and it will provide you with a road map to the future. Reference it whenever you hit a roadblock, and it will point you in the right direction without wasting time.
Hire An Effective Real Estate Team
Part-time real estate investors are strapped with an inherent disadvantage to those investing full time the minute they decide pursue a career in real estate: they simply can’t invest the same amount of hours. Fortunately, for the sake of the part-time investor, there is a rather easy solution: hire an effective real estate team.
Teaming up with the right people to invest in real estate is a rather elegant solution to a common problem. Think about it; teaming up with someone else can essentially double your capacity to invest in real estate. An entire team, for that matter, can take your business to the next level.
Before you can even consider the addition of a business partner, you must conduct a self-evaluation. Understanding your current position as a real estate investor, in association with your tangible skills, will ultimately delineate between the characteristics you require out of a partner. Your goal is to find someone that compliments your strengths and mitigates your weaknesses.
You must conduct an honest self-evaluation in which you assess your own strengths and weaknesses with a critical and impartial eye. Doing so will reveal an unbiased view of yourself that you may not have been aware of. As a part-time real estate investor, it may be in your best interest to construct a team that’ll enable you to remove yourself from the equation occasionally. If for nothing else, a good team will allow investors to step away at anytime without losing any ground. More importantly, your business will not be neglected in the event investors need to attend to other matters.
The team you choose can greatly influence the profitability of your company and the future it has. This is not a decision to be taken lightly. Choosing the right people for your team is not the same as getting an opinion on a deal from someone. A partner has a vested interest in your success and may not do things the same way as you—which is not necessarily a bad thing. With any partnership, the rewards must be greater than working on your own.
The prospect of investing part-time, while maintaining a nine-to-five, is an appealing a way to break into the industry. It is both a way of testing the waters and providing yourself with a safety net to fall back on. However, investing part-time requires discipline and a unique ability to maximize your efforts. Using the tips and time-saving hacks above, you can learn to be an efficient and successful part-time real estate investor.