Whether you’re new to the real estate business or an experienced veteran, you should always be seeking growth within your business in any given year. Even in a tough real estate market, you can make moves to improve your bottom line and gear up for more successful times ahead. After high housing prices and skyrocketing mortgage rates shocked the real estate market in 2022, a lot of investors have realized that in order to survive trying times, businesses always need to adopt a growth mindset and remain conservative in their growth models. While having a big picture idea of what success looks like, it’s important to never lose focus on each of the individual steps it will take to get to where you want to be.
Given all that’s happening in the real estate market in 2023, the road ahead might look a little murky. To provide some clarity, we’ve put together some ideas to help entrepreneurs like you grow your real estate business in the year ahead. While some of these tips may seem obvious, they can be helpful if you’re looking to expand your horizons or increase sales in 2023.
Prioritize Long-Term Growth Over Short-Term Profit
Any business person will tell you that if you want to grow your real estate business, it’s necessary to play the long game. It’s easy to get caught up in short-term gains and forget about the future. However, if your only focus is on making money today and tomorrow, you’ll end up losing out because you won’t have a strong foundation for your business down the road. Instead of focusing solely on today’s goal or monthly income target, think about how good long-term decisions will affect your bottom line in five years’ time.
On this note – don’t be afraid of competition! Too many investors get caught up in other investors buying up properties in a neighborhood that they’re investing in. You should welcome like-minded investors who see value in neighborhoods that you’re working in, as greater competition in one area can drive prices to a place that can help increase your profit margin per project. It may behoove you to reach out to competing investors to get a sense for how they run their businesses, as this can give you some insight into where hyperlocal markets are headed within the next 5-10 years.
A Slow Real Estate Market is a Prime Buying Opportunity
It’s true that 2022 saw overinflated housing prices, and mortgage rates made it nearly impossible for homebuyers seeking a primary residence to buy. While inventory is still in short supply, a lack of conventional homebuyer activity has led to a major slowdown in the market, and prices are now adjusting to compensate (that is, they’re coming back down to earth). A lot of wary investors are staying on the sidelines – and for some, this may be the right move depending on their financial status. However, those that have the operating budget available to acquire new assets would be remiss to sit this buying opportunity out.
Whether you’re acquiring properties with hard money loans or long-term rental loans, there’s no better time than the present to get a leg up on the competition by growing your portfolio while others are easing off the gas. When the market does even out, you could have a good amount of equity built up within your portfolio, which sets you up nicely for a refinance at more favorable long-term rates, allowing you to take cash out of your properties to continue growing.
Consider Getting Your Real Estate License
Technically speaking, you don’t need to have a real estate license in order to invest in properties. However, if you want to manage your own properties and act as your own real estate agent rather than outsourcing these duties to third parties, having a real estate license is a must. In the short term, there are some fees and lots of work to be done in order to obtain it, but it’s absolutely worthwhile on the other end to be able to handle your own sales without owing commission to a realtor. The more you can cut down on fees and commissions owed to other parties, the greater your profit margins will be.
Getting your real estate license will also make you more knowledgeable about your local market, and can help you eyeball appraisals for more accurate evaluations of potential deals. While getting the license itself doesn’t make your business grow, the knowledge that comes with it will help you stick out in a crowded market.
Getting Serious About Growing Your Real Estate Business?
At Pimlico Capital, we don’t look at ourselves as typical lenders. Rather, we prefer to build long-lasting, mutually beneficial relationships with the investors that we partner with. If you’re looking to grow your real estate business in 2023, we’re happy to help you leverage your investments, protect your own cash, and kick your strategy into high gear. We stand by our word in offering lower rates, higher leverage, and better service.