Forward Looking: Answers to Business Development Questions

A Bridge to success
A Bridge to success

I attended one of the many REIA groups that I belong too, this meeting had a business coach talking about all the different things that go into making a successful business and how to keep growing as an entrepreneur.  I liked that he didn’t focus on re-establishing the themes of E-Myth, which is a book you’ve read right?  But he focused on planning and development.  And taking action.

Guess where I fail?  If you’ve followed me long enough you know that my posting is sporadic, and that I spend a lot of time looking forward.  I have a problem taking action. Fortunately I’ve spent a lot of time this year diagnosing why that is, and with a lot of talks with the partner and others in the real estate circuit I think I’ve found my cure.

Accountability/Responsibility

With my partner, we discovered that because it is a familial relationship it is tough to find the right balance between talking about the business and holding each other accountable to the business.  It also goes along the lines of division of responsibility. For neither of us; we miss that impending sense of accountability or responsibility, until a problem comes up that needs addressing.  Then we are accountable and responsible for to/for a third-party.  And we move quickly to solve the problem.

I struggled in 2014 to hold myself accountable.  I found I was able to do it in short bursts, but not over long time frames. I’ve tried to use the blog to increase my sense of accountability and actions and it works for short times and I struggle when I see and hear crickets.

The big conclusion is that I need to start working with partners.  It gives me a sense of accountability and responsibility.  I am no longer just in it for me, but I have other people who have given me this sense of responsibility.  Unfortunately it’s very much a worker-bee mentality.  Fortunately though it’s a relationship based on structures that are nothing like having a job.

Business Coach Questionnaire8Ball

The business coach spent about two hours talking and then offered a free consultation, but before the consultation he wants me to fill out his questionnaire:

A few questions to get you thinking about what you think is missing in the business end of your efforts.

a.  Do you have a set of clear business objectives: max. four high priority objectives for the next 6 to 12 months? including income objectives?

  1. Build 3-4 Partnerships that increase the amount of transactional real estate I take part in this year
  2. Increase my portfolio value by $1MM and increase annual NOI by $100k.
  3. Add 2 new revenue streams too my real estate investments

b.  Do you have a set of milestones to indicate if you are on track during the year with clear and verifiable outcomes along the way to help you track progress?

  1. Build 3-4 Partnerships that increase the amount of transactional real estate I participate in this year
    1. 1 Successful remote Fix and Flip property in Chicago
    2. 1 Wholesale deal in Alameda County with a partner
    3. 1 Wholesale deal in Washington State with a partner
    4. Purchasing a fix and hold portfolio in Chicago with partners
  2. Increase my portfolio value by $1MM and increase annual NOI by $100k.
    1. Chicago Fix and Flip completed by end of April
    2. Purchase and Rehab of 6 properties per quarter in Q3 & Q4
  3. Add 2 new revenue streams too my real estate investments

c.  Do you have systems in place or have you thought about what systems you need to have in place to address anticipated future functionalities?

  1. Fix and Flip Business
    1. Detailed design requirements for flipping.  Same Wall colors, Same Flooring, Same Molding, Same Process
    2. Walk through Checklist, and daily updates from PM
    3. Monthly Inspections by partners
  2. Fix and Hold Business
    1. Working with a boots on the ground partner in Chicago who handles Property Management locally.
  3. Wholesaling Business
    1. Using the same template for determining which markets to spend marketing dollars in
    2. Building an action checklist for incoming leads, with timelines and followup

d.  Do you have a list of identified functionalities e.g. accounting, book keeping, lead generation, lead management, construction management, out of state property management, etc.?

  1. Chicago
    1. Property Management Company
    2. Local RE Attorney
    3. General Contractor/Partner to work on properties
    4. 3rd Party “Boots on the Ground”
    5. Local California Real Estate CPA
  2. Wholesaling
    1. Yelloweletters.net/Direct Mailing for Lead Generation
      1. After First deal or two may hire VA to carry out most of this
    2. Inbound call solution (Currently PATLive may transition however)
    3. Boots on the ground, local negotiator

e.  For all the lists above, are these lists complete: what may be missing?

Unclear.  If I knew that something was missing I would have already added it to the list.

f.  Do you have clearly set agreements between all partners?

Currently everything is in the negotiation phase and we have not lined up operating agreements.

g.  Do you have clear accountability systems or meetings with adequate frequency to check on progress with partners and employees / contractors?

  1. Chicago – We are still in the planning stage and communicate daily through email
  2. Wholesaling – We have been in communication when action has been necessary

h.  Do you have an overarching mission statement that is compelling enough?

No.  This is something that I know I need to have, and will be working on.

i.   Do you have a marketing plan for all facets e.g. getting more investors, getting deals, attracting real estate professionals who can help you find properties etc.?

  1. Getting Investors – Weekly REIAmeetups and meetings
    1. I feel great with who I am working with in regards to Chicago.  I have a high level of trust in these individuals.
    2. Washington Investors are going to take multiple meetings to get used too.
  2. Lead Generation – Yes there is a marketing plan and calendar in place.

j.   Looking out into your objectives, what are the possible things that could go wrong that we can avoid now?

  1. The fix and flip model in Chicago proves unworkable without daily oversight from the investment group.
    1. Our contractor can not scale up-to doing 6 properties a quarter
    2. We Under estimate the cost
  2. I am using the wrong criteria in my list generation to attract wholesale deals
    1. I am using the wrong person to work with in negotiating wholesale deals
    2. The marketing is in-effective

k.  Are there functions that you currently do that you wish to delegate or systematize?

  1. Right now I don’t actually do a lot of work in the Real Estate.  It’s mostly planning and aggregating ideas into an feasible plan.  I am trying to make everything I do moving forward systematic so that someone else can execute the plans.

l.  Do you have adequate legal liability protection and are you adequately incorporated e.g. LLC, S Corp, C Corp etc.?

  1. Current assets are protected by LLC (S-corp)
  2. Chicago
    1. Will be a complicated LLC formation with a C-Corp as a wholly owned subsidiary of S-Corp owned by the complicated legal formation of each individual investor.
    2. The first test model will be held as a JV partnership with TIC to protect the participants
    3. Only after the first model will we spend the money to incorporate
  3. Wholesaling
    1. The First 2-3 deals will be dealt with by the current LLC with the other partner being 1099 Contractor. After the 3rd deal a C-Corp will be incorporated with the Current LLC as an owner.

Do you use a business coach?  How do you keep yourself accountable to what you need to do to grow your business?  Let me know in the comments!

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