3 Mistakes Investors Make in Scaling Up their Businesses

It’s relatively easy to complete two or three Short Sales per year.  All it takes is convincing one or two good Agents in your area to work with you on Short Sales and a good negotiation service.  It’s another ball game entirely to keep deals flowing constantly in the pipeline.  Here are the most common mistakes that Investors make in scaling up business to that next level:

1.  Failure to systematize.  A pre-foreclosure business that is bringing in a closing or more a month can no longer efficiently be run out of a back bedroom with paper files, a bunch of post-its and a cell phone.  A system organizes all steps in the process and all records into an integrated process that saves steps and can be delegated to members of a team. Usually technology is used to systematize a process.  A home office is fine (many people prefer it), but it must be run as a real business if you want to succeed in the long term.

Aspects of technology that you need to grow your business include integrated systems that help you complete, organize and send off paperwork fast and accurately for Short Sale negotiation, and keep your contact files online (for more information about this, give us a call at 706-485-0162 and ask about The Short Sale Engine).  Your communication system should include either an automated voicemail system with phone extensions for others who are working for you, or a live system that steps prospective buyers and sellers through a series of questions with a live attendant to help you sort out the genuine deals fast.

2.  Failure to delegate.  Many entrepreneurs think they can do it all themselves.  If you look at a flowchart of all the functions required to run a pre-foreclosure business there are at least 75 or 80 different tasks and activities from lining up Agents and sending out letters to homeowners, to marketing for end Buyers, to receiving a check at closing.  How many of those tasks do you really need to do yourself?  The answer to that question will be based partly on your time, skills and interests, and partly on which are the most critical tasks to making money.  Personally do those things most important to making money: setting the vision and the goals for the company; finding Agent partners; finding private money; approving deals; cashing the checks; analyzing the system and making it better; hiring and retaining staff and consultants.  Then take on the things that you really enjoy doing and actually have the time for.  Virtually everything else can and should be done by someone else.

3.  Failure to keep a deal flow going.  Many new Investors will get a few deals under their belts and then rest on their laurels.  If deals from an established connection peter out, business dies because the Investor fails to constantly make new connections. After running one pre-NOD list they fail to send out more than one notice to that list, or to follow up with new lists every month.  They fail to explore new markets—new neighborhoods within one city, new cities, or even new states where the pre-foreclosure market may be more promising. You need to be constantly expanding your reach to build an ever-expanding network of Buyers, Sellers, Private Lenders, Agents, etc.  You’re either expanding or you are dying.

Now go out and sell some houses!