Like any profitable industry, real estate can be highly competitive. Seasoned investors know all too well that landing the best deals means beating competitors to the punch. While the world of real estate investing has always been (and will always be) competitive, today’s market poses even more challenges for investors. In fact, research shows that the current market is the most competitive in recorded history.
Now more than ever, to succeed in the biz you need a competitive advantage that sets you apart from others. Not surprisingly, real estate investors don’t want the competition to learn the competitive advantages that are working for them. Why? Simply put, a competitive advantage stops working to your advantage if fellow investors begin doing it just as well as you. What you’re ultimately looking for is a unique edge—something that will help you get ahead of the competition in your market and land the most profitable deals before they do.
What are some of the competitive advantages that successful real estate investors don’t want to share with the masses?
Becoming a Market Maven
By doing your homework and becoming an expert in your market, you can gain an advantage over many of your less educated competitors. Knowing the ins and outs of your market can help you spot new opportunities well before other investors do. For example, you may recognize that a new neighborhood is up and coming and become an early investor before the prices go up. Staying on top of both your own local market and the national real estate market will help you get ahead of the competition and make the savvy moves of a seasoned investor. Read local publications and stay up to date on business happenings in the area. If a new shopping area is being built or a huge business is coming to the area, it could be a great time to grab a property with the expectation that the housing demand may rise.
Rehabbing the Right Way
You can gain a serious competitive edge by learning how to rehab fix & flip properties in a way that is both cost-friendly and efficient. Experienced house flippers know the tips and tricks that help save money when rehabbing a fix & flip property—whether that means partnering with a contractor or running the numbers carefully and sticking to a well-defined budget. If you can find the best houses to flip and then keep rehab costs low, you’ll have a competitive advantage in real estate that will help you stay ahead in an aggressive market. There’s no single right way to do things, but there are certainly wrong ways. By using the best real estate investment (REI) software on the market, you can identify rehabbing opportunities and avoid common pitfalls that other investors have made in the past.
Discovering the Best Deals
Achieving success in real estate comes down to finding the most profitable deals. If you can discover deals in your market before others find them, you’ll have a serious leg up on the competition. This is especially true in today’s market, with low housing inventory making the market extremely competitive for buyers. There are a number of ways to identify deals ahead of your competitors—from using REI technology and networking to buying from wholesalers or at auctions. Tapping into the various resources at your disposal to ensure you are looking at the best data possible is essential. Everyone wants to find a deal, but by using technology and good data, you can find the right deal for you.
Financing at Its Finest
If you can secure your financing quickly, you will land the best deals before other investors beat you to the punch. A well-prepared investor is the best investor. Of course, cash is king in real estate. Cash buyers typically have an advantage over those who require hard-money financing to secure the funds. Other creative financing routes—such as partnering with a private investor or negotiating directly with the seller—can help you gain a competitive advantage as well. Think your strategy through before starting to identify deals, because once you find something, you’ll need to be able to pull the trigger quickly.
Nailing the Niche Deals
Finding a niche and becoming an expert in dealing with that specific type of investment will definitely earn you a competitive edge. For example, some investors have mastered the process of scraping and rebuilding properties and only invest in that niche. Other areas that investors can focus on include luxury flips, properties with foundation issues, and more. While “niching down” is risky and requires you to do extensive research, it can also help cut the competition in a big way. If you corner the market on a specific type of investment, you know exactly what needs to be accomplished, what your estimated returns are, and what your timeline looks like.
These are just a few of the competitive advantages that can help you win deals over other investors in your area. The key to succeeding in a competitive market is to find a unique edge that differentiates you from your competitors and start closing those deals.
Are you looking for ways to gain a competitive advantage in your market? Let’s talk.