Smart entrepreneurs always keep an eye out for new opportunities to nurture and grow additional income streams. Really smart entrepreneurs do their research before diving in – no matter how good the opportunity.
In this article I’ll outline some of the reasons real estate has made it onto my radar. I’ll also highlight the experiences of those that have been successful – even if the road was a bit rocky in the beginning.
More potential home buyers, more realtors and a shortage of affordable housing.
Real estate is a growing industry right now. CNBC recently surveyed a group of property market analysists. Their findings suggested that home prices will continue to rise at twice the rate of inflation and salary growth. They point to a continued shortage of affordable housing, combined with a labor market that’s on fire. More people can afford their own home, but supply is lagging behind.
There’s an opportunity here, but your approach will define your success.
A growing market could mean opportunity. But there are many ways to leverage an opportunity. Becoming a licensed realtor is just one aspect of the booming real estate industry. Real estate developers can make millions turning vacant or underutilized areas into thriving shopping districts or high-rise living spaces.
Think you have what it takes to rise to the top in a competitive real estate market?
I recently visited Armin Missaghi, Founder of LA Design Build. His Beverly Hills based firm specializes in completing complex projects for clients in Hollywood and New York City. I’ve summarized our conversation below – highlighting aspects that I think can help entrepreneurs find success and real estate and beyond:
He isn’t your stereotypical real estate tycoon. In fact, his journey towards the American dream started when he immigrated to the US at the age of 18. This meant he had to overcome both cultural and financial barriers to find success.
The joke is that it takes twenty years to become an overnight success. Missaghi, an energetic problem solver, would be the first to tell you that success in real estate comes from a dogged determination to build value for clients, while optimizing your process. It isn’t quick and it isn’t easy.
For example, his first real estate project involved a home he purchased using his savings from a retail sales job. In the retail environment he honed his communication skills and learned how to close deals. Based on conversations with other real estate pros, he came to believe that the master bedroom and kitchen were the most important areas of a home, so he started investing in improving those areas of the property.
You need more than a desire to make money. Success requires genuine passion.
He did most of the work himself in order to save money. Taking on renovations by himself sparked something inside. He uncovered a new passion because he was willing to take on the challenges himself instead of picking up the phone and spending a ton of money.
These passions were the seeds that sprouted into a career of designing and renovating properties. He said, “…watching my designs come to life before my eyes was uniquely rewarding.”
After flipping his first property at 22 years of age, he saw the potential to be able to duplicate this profitable approach. Today he manages a variety of projects around Los Angeles with a highly talented team. But back in his early years he was much more focused on building his reputation, one property at a time.
Social media allows real estate projects to come to life at an earlier stage.
One of the things that gave Missaghi an edge in his early years was his decision to utilize social media. The visually tantalizing renderings inspired his future clients when they appeared in their newsfeed.
Luckily, Armin’s partner had a background in software development. She helped him take his vision to the next level by creating a digital platform that allowed clients to visualize their dreams. This allowed his team to enhance the client’s vision with opportunities to plus their project even more.
In real estate visuals are everything. Clients want to see what they’re buying, and they want to see potential improvements laid out in detail. Seeing really is believing.
Their software had the ability to add certain renovations with a simple drag-and-drop / drop-down menu. Clients could independently craft and communicate their vision, based on what Missaghi’s team was capable of.
The innovator’s dilemma involves staying ahead of the copy-cats.
The dev team was inspired by how automakers allow buyers to build and customize their dream car online. Later on, various real estate development companies decided to adopt this strategy, requiring their company to continually develop innovative, competitive advantages to how their software worked.
3 Things Entrepreneurs Need to Understand If They Want to Succeed in a New Industry:
I asked him for his advice to entrepreneurs considering a transition to real estate. He shared three key things he wished he had realized earlier:
- Profit in real estate is made when you first acquire the property. Adding value is important, but your profit margins are determined by how much you invest on the front-side. Don’t be afraid to walk away if the numbers don’t make sense.
- If you can, hold onto your projects. He laments the fact that his best projects would be worth much more today, if he had only held onto them. Plus, the passive income from renting his properties out only adds to the project’s overall profitability. Every project is different, so explore different rental arrangements – from short-term VRBO to multi-year leasing.
- The market will fluctuate. Don’t give into the temptation to leverage everything you have. The real estate developers that stand the test of time know how to manage their risk.
As we wrapped up our meeting, Missaghi emphasized the importance of paying attention to the little things. LA Design Build is able to win projects in even the most competitive bidding processes because of their reputation for going above and beyond for their clients.
At every stage of a project, Missaghi regulates his team work. He applies everything he’s learned from doing the work by himself for so many years. And now that he can delegate to a skilled team, he’s able to invest his energy in finding ways to create projects that stand the test of time – both in terms of quality and forward-thinking design.
Getting advice from someone with experience in the industry is invaluable. The real estate industry is an opportunity that shouldn’t be dismissed lightly. And there are many ways to get your slice of the pie. Assess your strengths and weaknesses. Learn as much about the industry for yourself. And then craft a strategy that gives you the best chance for success.
The post Considering a Real Estate Business? Here’s a Blueprint for Success appeared first on Tweak Your Biz.
No comments:
Post a Comment