Do you want to know one surefire way to fail at your goals? This is something I learned in business a long time ago, the hard way. Actually, I learned a lot of things the hard way, but this one sticks out to me because I was warned about it and still made the mistake.
If you want to be successful as a real estate investor, or any business, you need focus. Being a real estate investor is unique to a lot of other businesses, because it is fairly easy to get into and there are a lot of paths you could take. For these two reasons, it is very difficult to focus and succeed.
The longer you are in the business the more “opportunities” you will see. It might be a deal that is outside your focus, a partnership opportunity, or a multi-level marketing business. All of these could be very profitable, but together, none will work. There is always a shiny object you can chase, but it won’t be until you find and focus on a niche, that you will start to see your earning potential.
According to Dictionary.com, a niche is a distinct segment of a market. In real estate, I would take this a step further and define a niche as a specific strategy AND segment of a market. For example, you might focus on houses worth $250,000 or less in a certain county that you can buy using hard money to fix and flip. Until you master one area and one strategy, I would not sway. If you get a great deal that just falls in your lap that is outside your focus, I would pass it along to someone who can handle it. With that said, once you master one niche and are making money, you can add another market or strategy. Until you reach your income goals with consistency, I would not explore another business that will suck your time. I get hit up all the time to join multi-level marketing companies with promises of riches. In the past I might have swayed, but I have made Pine Financial my focus and have become successful because of it.
To pick your niche, you should start by getting background in as much as you can. Read books, go to classes, and talk to other investors. Once you get a handle on your options, select a niche that you believe is relevant today and will be relevant in the future, where you see a large profit potential, that you know you have the ability to do, and that you think will be fun. Once you have a specific strategy picked out, you can work on a market. Match your market with the strategy to maximize profits. For example, if you are in new construction, you want to focus on areas that demand a high price per sq foot, if you are buying rentals you might look at lower price points within a certain mile radius of your office or home. A market is not limited to area, however. Other factors to consider include; size of home, beds, baths, unit mix for multi-family, values, rent rates and more.
I want to finish by stating that your niche will evolve as your grow your experience. Experience truly is the best way to learn. If you like it or not, you will learn if the niche you chose works and will learn ways to tweak your niche. Don’t mistake tweaking a niche with lack of focus. It is important to bring in feedback, adjust, and continue. Also, because you have flexibility with your niche, you are not stuck with it, eliminating the excuse of finding a niche before you start investing. Do the best you can and start investing today!