Wholesaling Properties: The Importance of Knowing Your Competition
For real estate investors wholesaling properties it is essential to know your competition. Many get so lost in figuring out how to get started flipping homes and then dealing with the daily demands that they never do any real market research or fail to keep up with it. While this neither needs to be incredibly expensive nor time consuming it is essential to survive and thrive in real estate investing.
Knowing your competition helps maximize profits and minimize risk. So why would you ignore it?
Knowing what your competition is up to can end up making a difference in what you buy, how much you pay for properties, where you hang out in your spare time, who you hire and what your marketing says.
Knowing your competition and positioning yourself and your product effectively in contrast will dictate your visibility, speed of turnover, cost per lead, per deal profit, volume potential and ultimately your gross income and wealth over the long term.
Failing to keep an eye on the competition means the potential for completely blowing it; wasting money and time, getting stuck with deals you can’t get rid of or at least making a lot less on them than you planned and sabotaging momentum.
For those wholesaling properties this doesn’t just mean watching other buyers when bidding on homes, it means keeping an eye on other home sellers, both local and national real estate agents, new home builders and developers and even global real estate investment companies.
What are they promising your buyers, how good do they look next to you, how are they positioning themselves? For example if you don’t know that another investment firm is emailing your same database offering double the returns and guaranteed financing you won’t know that you are wasting your time and money, or at least why you aren’t seeing the results you anticipated.
This of course doesn’t mean that you need to beat every competitor out there on every angle. Find a USP (unique selling proposition), know how to stand out on other factors, and what your end buyers and investors really want.
Define a niche to own and make sure your product, branding and message match it.
Even if you’ve never done any market research before, don’t be intimidated. Hopefully you’ll eventually systemize this and make sure it is organized and updated regularly. However, in the meantime you can certainly take a guerilla approach and find out what your competitors are up to and improve your own results when wholesaling properties without having to burn a lot of resources on it.
Think:
- Setting up Google alerts
- Using software to screen the web for social media activity
- Sign up for feeds to keep on top of news and trends
- Keep a record of all local real estate marketing
- Hire cheap data entry help to do active research for you
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