The most difficult part of anything is the beginning. When you’re thinking about starting a business, the beginning stage is usually the one where most people get discouraged.
So many things to do and limited resources to help you get started.
That’s not the case if you’re considering real estate. We can’t reduce your to-do list but we can offer resources.
If you’ve dreamed of starting a real estate business, or even wondered whether real estate is a good career, this article is for you. We’ve put together a few basic tips on how to start a real estate company.
We begin with the question of licensing. Then, we move on to planning, marketing, and networking. Keep reading if you’ve wondered what you should do first when starting a real estate company.
Should You Get a License?
If you’ve mentioned getting into real estate, you’ve likely already heard opinions about every aspect of the business. One thing most people have an opinion on is the pros and cons of getting your real estate license.
The short answer is if you’re starting your own real estate investment company, you don’t need a license. There’s a difference between need and should.
Anyone with the right resources can invest in a property. You can buy and sell real estate without ever attending classes or sitting for licensing exams.
The long answer to this question depends on several factors.
Most states allow people to complete their own real estate transactions without a real estate agent. Before you decide against getting your license, check with your state’s real estate regulation board and make sure it’s not a requirement.
There are 3 reasons why a real estate license is an advantage for an investor:
- Access to the Multiple Listing Service (MLS)
- Knowledge and Relationships
If you dream of opening an agency, you’ll need a real estate license. In addition, if you think down the road, you might have an interest in operating a brokerage, there’s a license required. Real estate agent first, then broker’s license.
Start with a Plan
If you’re ready to move from the dream stage to the reality of starting your own real estate business, you’ll need a plan—a business plan.
Your business plan is the road map you’ll create that helps identify the best route to success, potential obstacles, and points of interest along the way.
A good business plan is made up of several pieces including (but not limited to):
- Mission Statement
- Marketing Plan
- Exit Strategies and Backup Plans
It seems like a big undertaking but a well-thought-out business plan helps ensure your success. It’s also something any lender, whether it’s a financial institution or a private investor, will want to see before they invest in your projects.
Develop a Love for Research
Although we already touched on the business plan, you shouldn’t design one before you do some in-depth research on the real estate investment industry and your specific niche and market. You’ll also research your competitors.
Beyond the research on your industry, market, and competitors, homebuyers, and investors go through a process called due diligence. Due diligence is a fancy term for doing your homework before buying real estate.
Due diligence in real estate helps you minimize risk and avoid unexpected costs once you complete a purchase.
Standard research associated with due diligence includes inspection and appraisal of a property. As you learn more about how to start a real estate company, you’ll put together your own list of due diligence items.
Develop a Marketing Strategy
If only you could hang your sign, open the doors, and enjoy a steady stream of clients interested in your real estate services. It sounds nice, but most people understand that’s not how things work. What works is a well-designed marketing strategy.
Like your business plan, your marketing strategy contains multiple pieces.
Start by identifying your target market. This is likely your number one strategy for success. Choose a niche, focus on it, and develop an expertise in that market.
Your marketing strategy also includes a marketing budget. Base your budget on your target market. One target audience may respond to social media marketing while another tends to use real estate websites.
Whether your target market responds to email marketing or direct mail, you’ll need an online presence. Create a website and dedicated accounts on various social media platforms.
As your business grows, you’ll adapt your marketing strategy. Real estate is a living breathing business and you’ll do best when you pay attention to changes and adjust accordingly.
No Person Is an Island
Even if you’re the sole employee of your company, real estate is never a one-man show. When you think about everything you’ve learned so far about how to start a real estate company, keep this at the top of your list. No person is an island in the real estate business.
Ask any investor and they’ll tell you how much they rely on their personal network. As you grow, you’ll find many of your best leads and deals come from your network.
Networking takes time but it’s time well spent. Cultivating relationships with your clients, colleagues, and competitors is a major key to your success.
Need More Information on How to Start a Real Estate Company?
We know we’ve only given you a few basics but hopefully, we’ve inspired you to keep pursuing your dream of getting into real estate.
Once you research and choose a target market, design a business plan and marketing strategy, you can start looking for investment properties.
If you’ve decided you’re interested in starting a real estate agency, then you’ll want to look into licensing classes.
Whichever route you take, we have more helpful articles on how to start a real estate company. Visit us online and read through our posts on real estate.