That’s a fancy way to say,you’re a bottleneck if you’re spread so thin in your business to the point that you can’t take on any additional deals, clients, projects,etc., because you’ve reached your maximum bandwidth of what you can handle.
And, if you’re at capacity and you still try to take on more, something in your business will suffer – whether that be the quality and timeliness of your services and products, or even your sanity due to burning the candle at both ends.
As real estate investors, it’s pretty common for us to be go-getters and carry most of the tasks needed to push our businesses forward on our own shoulders. Whether that means you’re the one that’s…
- Negotiating with motivated sellers
- Talking to investor-buyers
- Putting together contracts
- Handling all calls
- Updating your website
- Doing all admin work
- handling all the transnational paperwork in a deal
…You do what you have to do to get the job done.
The problem with the SUPERHERO investor mentality is that it leads to a what I call a REVENUE RUT. A revenue rut is when despite your continued best efforts, your income has plateaued.
The good news is there’s 3 ways to cure a revenue rut: more deals, higher margins per deal, or lower overhead.
And here’s more good news – I’m going to share with you how using a virtual assistant (VA) in your real estate investing business will provide those 3 cures as well as relieve you from your need to be the do-it-all superhero in your business.
Just in case you’ve never considered using a VA in your business, let’s explore some of the advantages that should really get your wheels turning.
Advantages of Using a Virtual Assistant in Your Real Estate Investing Business
- Significant labor cost savings – You can typically hire a VA to do the same thing you’d have someone local do for a fraction of the cost without sacrificing quality.
- Reduced overhead – with a VA, you no longer have to worry about the overhead that comes from having local staff, such as office space, utilities, office equipment, the list goes on.
- Gain significant time-if you’re a solopreneur – or if you’re doing a lot of routine, tedious activities in your business – a VA will be able to save you significant time by removing those time-sucking tasks off your plate. I literally gain at least 5 hrs every day by delegating tasks to my VAs.
- Easier to scale your business– VAs allow you to multiply your efforts. You only have so many hours in a day, so it’s important to maximize that time. VAs can help you do more deals or even move into additional markets because your efforts, productivity, and profits are no longer limited by your own capacity.
- Increased Flexibility– This is big. When I had a full time local staff, I felt like I was strapped to my business because I was always managing them which made me more of a manager than a business owner.With VAs, you can hire them full or part time; you can hire them to work during your work hours or to work when you’re asleep; you can hire them by the project or by the hour. And you don’t have to physically meet with them all the time which gives you more flexibility as well.
If you’re a serious investor who values your time and is looking to scale your profits, those reasons I just mentioned should be pretty compelling to use a VA in your business.
So now back to the question,how can VAs cure your revenue rut through more deals, lower overhead, or higher margins?
Regardless if you’re a wholesaler, fix-and-flipper, a landlord that buys and holds for cash flow, or a property manager – there are a lot of moving pieces that go into putting together deals.
However, if you really think about the moving pieces there’s only a very selectfew activities that ACTUALLY REQUIRE YOU to complete them.
To illustrate this I’ve described the typical steps needed to close a deal as a wholesaler, as well as which activities you versus your VA can handle.
WHOLESALE DEAL FROM START TO FINISH
- Send direct mail campaign to motivated sellers.
- VA can pull the seller list (per your details) and contact the mail house with instructions for the mailer.
- Motivated sellers call your office in response to the mailers.
- VA can answer seller calls using a phone script to determine motivation and to screen out tire-kickers.
- An appointment is set to either meet in person or have a higher-level phone conversation about buying the seller’s home.
- VA can set an appointment for you using an app like Acuity.com based on your pre-set calendar for either a follow up meeting or call with the seller.
- Negotiations occur between you and the seller and an agreement is reached.
- Ok, finally time for you to do some work in this transaction 🙂 Unless, you have an acquisitions manager that handles negotiations.
- Contracts are prepared for all parties to sign.
- VA can handle preparing contracts using Zipforms and send out for electronic signatures using Hello sign.
- Escrow is opened for the property with the title company.
- VA sends title company contracts, earnest money details, and information about the buyer and seller in order to open escrow.
- If needed, inspections are ordered for the property.
- VA manages setting up the inspection and coordinates the date, time, and entry instructions with the necessary parties.
- Marketing begins to prospective investor-buyers
- VA emails deal out to your buyers list using a template email that’s already been created where they’re just entering the deal details. VA also texts and calls your VIP buyers to make them aware of the deal.
- You have an interested investor-buyer for your deal
- VA prepares and sends contracts to investor-buyer for digital signatures.
- Escrow is opened for the 2nd closing (you selling to investor-buyer)
- VA coordinates with the title company the details of the second closing, informs them of a double closing to occur, and stays in communication with all parties throughout the process to keep you, buyer, and seller in the loop.
- Closing day!
- So, time for you to go to work once again in this transaction. You need to sign the closing documents.
- All closing documents are filed in CRM (customer relationship manager)
- VA takes care of electronically filing the settlement statement and all other documents related to the closing for you to easily access later or for tax time.
From the example above, you see that your involvement was only really needed twice – to negotiate the deal, and signing the closing documents.
If it sounds too good to be true, it’s not. That’s exactly how most of my deals work.
Think about it for a minute…if you have VAs handling all of those components of each of your transactions, how many more deals can you do per year? Per quarter? Per month?
Working hard and long hours isn’t the key to scaling your business and doing more deals.Effective delegation that leads to you only focusing on high revenue generating tasks is the key.
Getting Out of Your Revenue Rut Cure #2 – Lower Overhead
Lowering your overhead alleviates your revenue rut because profits are a result of your revenue minus expenses. So, if you lower your overhead, then you’ll ultimately increase your profits.
Take a look at your current overhead. Are you paying for a live answering service to take seller calls? Are you paying for office space that you barely use? Do you have a payroll that is eating up most of your monthly revenue? These are just a few examples where overhead costs can start to add up.
Here’s where a VA helps you lower your overhead:
- Hiring a part time VA to screen motivated seller calls and answer your business line is less expensive than paying for a live answering service, such as Pat Live, that charges you by the minute – and gives you less flexibility.
- The fixed cost of office space is unnecessary with VAs, since they work remotely.
- You can hire a full time VA for a fraction of what you’d pay a local part time person. I still use local staff in my business for activities such as meeting with sellers and viewing properties. But, any routine tasks that don’t require physical presence are assigned to my VAs.
To put it in perspective, If you average a modest 5k profit per deal that you close, you could completely cover a yearly salary for a full time VA with less than 4 deals. And the fact that VAs provide you with additional time and resources to complete more deals – they essentially pay for themselves.
When you’re cranking out deals and you’re so caught up working in your business instead of on your business, it’s easy to miss business opportunities.
For instance, maybe you’re making 5k per wholesale deal because that’s what you’ve always done.But what would happen if you were in a position to take one day off a week – let’s say every Wednesday – and focus solely on opportunities to grow your business. That means no dings and bells from your phone, no seller calls, no dealing with title companies. Just you and your business – one on one.
That’s tough to make a reality if you’re a solopreneur because you’re always the cog necessary to keep your business going.
But, using a VA affords you an opportunity to take that time off to work on your business since they’ll continue to drive the business forward per your instructions.
During that time off is when you’ll explore JV opportunities, tap into other markets to purchase properties, and reach out to new buying groups – all of which can lead to higher margins.
Those are the opportunities that you completely glossed over when you’re stuck in the day-to-day minutia as opposed to having a VA in place so you can take time to focus on ways to grow your business.
So What’s Next?
Now you see how using a VA can have an incredible impact on your business and get you out of your revenue rut by helping you close more deals, lowering your overhead, and helping you increase your margins.
The next step is to take action. If you already have a VA, make sure you’re using him effectively by delegating all of your non-revenue generating tasks. And if you don’t have a VA, it’s time for you to take steps today toward getting one so that you’re no longer the bottleneck in your real estate investing business.