How to Start & Grow A Real Estate Business In 12 Steps

If you've been pondering the question, "How do I start my own real estate company?" or considering how to take your current business to new heights, you're in the right place.

Real Estate Skills will not only navigate you through the initial steps of starting a real estate business but also equip you with the essential strategies that stand the test of time:

• What Is A Real Estate Business?
• How Profitable Is A Real Estate Business?
• How To Start A Real Estate Business In 12 Steps
• What Are The Benefits Of Starting A Real Estate Business?
• How Much Does It Cost To Start A Real Estate Business?
• How To Start A Real Estate Business With No Money
• The 9 Best Real Estate Business Ideas To Launch Your Career
• Examples Of Successful Real Estate Businesses
• Where Can I Take A Real Estate Business Course?
• Real Estate Business FAQs

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With so many ways to get started in the real estate industry— from being a real estate agent to buying a rental property, property management, wholesaling, and house flipping - the opportunities as a real estate professional are truly limitless.

Whether you're a newcomer to the industry or an experienced professional seeking to take a more entrepreneurial route, we've got the insights you need. From securing your initial investment to cultivating a loyal client base, let's embark on this journey of building a successful real estate business together. So buckle up and let's dive into the thrilling world of real estate entrepreneurship!

Others simply wish they could be in the position of giving orders instead of receiving them. Sounds nice, doesn’t it? Starting real estate business provides all of this and so much more. Read on to learn how to start!

*Before we begin our guide on starting a real estate business, we invite you to view our video on How To Get Into Real Estate With No Money! Host and CEO of Real Estate Skills, Alex Martinez, provides the perfect guide for beginners to start their first real estate business with no capital of their own!

What Is A Real Estate Business?

A real estate business is an institution that purchases, sells, and rents out buildings, housing, or land. Real estate companies may also engage in investment, development, and management of properties.

Starting a real estate business is not something that the faint-hearted can do with ease. That said, most businesses are not easy to start anyway. One important thing to emphasize is that real estate is a tried-and-true business model. You’re certainly not “reinventing the wheel” when starting a real estate business.

Regardless, you’ll need to spend many hours doing research on the real estate industry and coming up with a detailed business plan.

Read Also: What Is Real Estate? A Guide To Understanding The Basics

Types Of Real Estate Classifications

Before delving into the nitty-gritty of how to start and grow a flourishing real estate business, it's imperative to understand the different types of real estate.

Each category presents its unique opportunities and challenges, so having a clear understanding of these types can help guide your business strategy and decisions.

Real estate can be broadly divided into four main types: Residential, Commercial, Industrial, and Land.

• Residential Real Estate: This type of real estate comprises properties designed for non-commercial, domestic living. It includes single-family homes, which are standalone houses built for one family, duplexes or buildings that house two separate families, and multi-family properties, which are buildings designed to accommodate more than one family, typically in separate units. Residential real estate also includes condominiums or condos, apartments, townhouses, twin homes, and properties used for vacation or leisure purposes.
• Commercial Real Estate: These properties are primarily used for commercial purposes, where businesses operate. Commercial real estate includes office buildings that house various businesses and corporations, hotels offering accommodation and hospitality services, shopping centers and strip malls that are home to a variety of retail stores, restaurants offering food and dining services, medical buildings like hospitals and clinics, and educational facilities such as schools and universities.
• Industrial Real Estate: This type of real estate includes properties used for industrial purposes such as production, manufacturing, storage, and distribution. It covers distribution centers where goods are stored and dispatched, self-storage facilities offering storage solutions to businesses and individuals, factories where goods are produced, manufacturing units where products are assembled, and warehouses used for storing goods on a large scale.
• Land: Land covers any vacant or undeveloped land that can be used for various purposes. Agricultural land, as the name suggests, is used for farming and other agricultural activities. Vacant land refers to property that doesn't have any structures on it, offering the owner the flexibility to develop it as they see fit.

Read Also: How To Invest In Real Estate: The Ultimate Guide by Real Estate Skills

How Profitable Is A Real Estate Business?

The sheer scale of the real estate market makes it a lucrative field for entrepreneurs. To provide a snapshot of the residential real estate sector:

• Recent data from the National Association of Realtors (NAR) reveals that 5.64 million pre-existing and 822,000 new homes were sold in 2020.
• Existing-home sales rising 0.2% in May 2023 with notable gains in the Southern and Western United States.
• According to Indeed, Realtors and real estate agents' national average salary is $96,538/year as of July 2023.

4 Ways Real Estate Businesses Make Money

Operating a real estate venture can be highly lucrative, provided that you conduct thorough due diligence. Here are the 4 most common ways real estate businesses make money:

• Cash Flow: Possessing and leasing a property that generates more in rental earnings than it incurs in expenses leads to positive net cash flow.
• Value Appreciation: Your property's value could potentially grow over time, whether through enhancing its net cash flow, improving the property itself, or due to shifts in the marketplace.
• Loan Paydown: Numerous property investors opt for a mortgage to acquire a rental property. Each mortgage repayment not only reduces the outstanding principal amount but also boosts your property's equity. Over time, you might become the outright owner of the property - an advantageous situation when your tenant is effectively paying off your debt.
• Tax Benefits: A real estate investment can often provide tax shelter benefits, potentially protecting its own income from taxes, and frequently sheltering income from other sources too.

The key is to evaluate industry trends before making any strategic decisions. This necessitates conducting both an investment property analysis and a target market analysis.

Equally crucial is the consideration of legal implications, encompassing state laws and business regulations. If you opt to take a mortgage or acquire insurance, it's advisable to take the time to explore different options.

Read Also: How To Make Money In Real Estate: The Ultimate Guide

How To Start A Real Estate Business In 12 Steps

Starting a real estate venture may seem like a daunting task. The truth is that anyone can become successful in the industry with some hard work and determination.

So, what’s the secret to starting a successful company? Here is a complete 12-step guide on how to start a real estate business:

1. Set Your Professional Goals
2. Study The Real Estate Industry
3. Decide On Your Business Strategy
4. Learn What Insurance You Need
5. Determine Startup Costs
6. Acquire Any Necessary Licenses
7. Create A Business Plan
8. Establish An Online Presence
9. Develop A Marketing Strategy
10. Follow Up On Leads
11. Build Or Join A Support Network
12. Keep Growing Your Business

1. Set Your Professional Goals

Before you formulate ideas on how to start a real estate business, it's crucial to align your professional aspirations with your personal goals. Start by envisioning your long-term objectives and then break them down into smaller, actionable steps that you can work towards daily. Ask yourself where you envision being in five, ten, and fifteen years, and map out immediate strategies to help you reach those milestones. Remember, goals not only keep you focused but also drive you to take action.

Take note of your competition, analyzing what other real estate businesses in the area are doing. Leverage your unique strengths to differentiate yourself in the market. Begin by answering the following questions to help refine your business idea and set a robust foundation for your venture:

• What skills set me apart?
• What is the purpose of my business?
• Who is my target demographic?
• What is my budget limit for starting this real estate business?
• Do I require external funding? If so, how much?
• What kind of work/life balance am I aiming for?
• What are my expectations for starting a real estate business?

Seeking external opinions can be beneficial. Don't hesitate to seek input from a trusted individual to gain a fresh perspective on your plans and answers to these questions.

Read Also: How To Start A Wholesale Real Estate Business

2. Study The Real Estate Industry

The real estate industry is a vast landscape filled with diverse opportunities for profit, whether that be through buying and holding properties, renovating real estate, or working as a licensed real estate agent. Before starting a real estate company, an understanding of the sector is crucial.

Begin by identifying your interest area or niche. This could range from working with families to find their dream homes as a real estate agent, to managing properties for landlords. Your choice will depend largely on your personal preferences, skills, and the target market you wish to serve.

Next, identify your competitors and understand the business models prevalent in your chosen niche. Don't be swayed by the often-glossy portrayal of the industry on social media. Instead, engage in meaningful conversations with local property owners and fellow real estate professionals. If you're planning to operate in a specific state, like California, consider connecting with local associations such as the California Association of Realtors.

It's also vital to understand your unique competencies, competitive advantages, and the resources necessary to start real estate business. You can access a wealth of free resources for budding real estate entrepreneurs on the U.S. Small Business Association (SBA) website.

Furthermore, successful entry into the real estate sector requires comprehensive industry research, including identifying potential competitors and understanding the market dynamics in your chosen area. Evaluate different strategies like wholesaling, rehabbing, or buy-and-hold, and choose the one that aligns best with your goals and skill level.

Finally, study market trends, median home values, rental prices, and neighborhood amenities. Remember, you are not confined to your current location; exploring opportunities in other regions could prove fruitful. Online research, networking events, and securing a mentor can all be valuable strategies during this phase.

The more detailed your preliminary research, the better prepared you will be to devise a robust business plan.

Read Also: 18 Best States To Wholesale Real Estate (2024 Edition)

3. Decide On Your Business Strategy

Upon completing thorough research, it's time to solidify a core business strategy tailored to your ambitions and the market realities. Your chosen path might involve becoming a real estate agent, wholesaler, property manager, investor, commercial property broker, or possibly a blend of several roles.

It's essential to align this strategy with your findings from the market research phase. Outline a comprehensive business plan that describes not only your chosen path but also the resources and tools you intend to utilize. This document will act as your roadmap, guiding your decision-making process and enabling you to steer your real estate venture toward success.

Crafting a well-thought-out business strategy is a significant step in starting your real estate business and setting it on a trajectory of growth and profitability.

4. Learn What Insurance You Need

In the real estate business, insurance is an essential safeguard against various risks that could potentially derail your operations. Different types of insurance may be required, depending on your business structure and the nature of your real estate investments. These could include:

• Business Owners Policy
• Professional Liability Insurance
• Workers Compensation
• Commercial Auto Insurance
• Home-Based Business Insurance
• Cyber Liability Insurance
• Landlord Insurance
• Rent Default Insurance

Securing the appropriate insurance policies before starting your real estate business is crucial. These coverages can protect you from substantial financial losses arising from property damage, theft, intellectual property lawsuits, and other incidents. This aspect is especially critical in real estate, where the provision of advice, guidance, and handling of large financial transactions are common.

Liability insurance is a key component, protecting against potential claims. As a real estate professional, your clients rely on your expertise and management. Therefore, having a safety net in case an unhappy client decides to sue you due to a mishap is essential.

If you plan to employ people in your real estate business, workers' compensation and unemployment insurance are necessary. Remember that coverage varies by location, and many General Liability (GL) policies often include workers' compensation. Always ensure that you have a thorough understanding of your insurance requirements to protect your business adequately.

5. Determine Startup Costs

Launching a real estate business is characterized by a relatively low entry barrier, with no stringent educational prerequisites, lavish office spaces, or substantial workforce required. In fact, a remote real estate investor only requires a reliable internet connection and a laptop to evaluate potential single-family investment opportunities from anywhere globally, such as through platforms like Roofstock, Zillow, or Realtor.com.

Nevertheless, the precise expenditures associated with initiating a real estate business can fluctuate based on your specific business type and investment strategy. Some of the common startup costs to budget for include:

• Applying for a business license
• Acquiring business insurance
• Opening a business checking account
• Establishing a business entity, like an LLC
• Selecting a suitable software system

Despite the availability of several avenues to venture into real estate without an initial financial outlay, it is essential to assess your financial standing. You should request a credit report and examine any existing accounts or investments. This is because when approaching a lender, they will typically require information about your financial history. It's important to understand that regardless of your financial starting point, there are opportunities for everyone in real estate investing.

Consider exploring various financing options suitable for your investment strategy. Traditional avenues like financial institutions or government loans might be a good fit for some, while others might lean towards non-traditional financing sources such as private money lenders, business partnerships, or crowdfunding. Familiarize yourself with a range of alternatives, so that when it's time to launch your venture, you'll know precisely which option to pursue.

Read Also: How To Wholesale Real Estate With No Money (2024)

6. Acquire Any Necessary Licenses

Acquiring the appropriate licenses and permits is a crucial step in starting a real estate business. The requirements may vary depending on the location of your business and the rental property, encompassing state, county, and city regulations.

It's worth noting that specific real estate activities, like wholesaling real estate or flipping houses, typically don't require a real estate license. These forms of investment allow you to purchase, renovate, and sell properties without needing the same certification as a traditional real estate agent or broker.

Also, a real estate investor is not required to have a real estate broker's license to own rental property. However, in some states, rental property owners may need to collect a sales or rental property tax from tenants and submit it to the city and state authorities.

The U.S. Small Business Administration (SBA) provides resources to assist in understanding how to register a business, handle taxes, and secure required licenses and permits. Similarly, the Department of Revenue website for the state where your rental property is situated will provide a guide on applying for a tax license and the necessary forms to submit. This process is crucial in maintaining regulatory compliance and fostering a legitimate and professional business reputation.

Read Also: Real Estate Jobs Without License Requirements

7. Create A Real Estate Business Plan

Write a real estate business plan with keen attention on things that will differentiate you from the competition. A real estate business plan refers to a document with an explanation of the origin of an agency, its goals, and its mission. It provides a clear direction to business partners, as well as employees, on what will make the business profitable. 

Take time to think about your business and answer the following questions: 

• What is your company's vision?
• What is your mission statement?
• What is your value proposition?
• Which of your customer’s problems are you helping to solve?
• How will you make a difference for yourself, your clients, and the world? 
• What principles and values will drive your business? 
• How do those principles and values differentiate it from other businesses? 
• What will you be responsible for in your business? 
• Who will be your key partners? 
• What are your revenue streams?
• What are the most important costs inherent in your business model?

To create a solid business model, check out this full PDF version of the book Business Model Generation by Alexander Osterwalder. The author introduces the "business model canvas" to map out business models - an excellent framework for any small business or entrepreneur.

To help guide you in drafting your first business outline, we’ve laid out a complete guide on how to create a business plan step-by-step!

Assess the Target Market

Assessing the target market involves analyzing the demographic, cultural, and financial factors that affect the real estate industry in the area where you intend to operate.

A market assessment enables you to identify potential challenges and opportunities. These factors will influence the success of your business.

To assess the market, draft a thorough market overview. Then, define the target audience in the market and research the competition.

Come Up With An Executive Summary 

After assessing the target market, you'll now have a clear market picture, and know the competition and your target audience. This makes it easier for you to describe your company.

The executive summary should summarize the services, purpose, audience, and location of your business concisely.

Use a maximum of five sentences to describe what your business will do, the services it will offer, the areas where it will operate, and the people it will serve.

Define The Mission Statement

A mission statement should build on an executive summary. It should explain the purpose and motivation of your business. It’s a “why” statement in a business plan.

Therefore, consider why or the reason for starting the business as well as your passions in the industry. 

Perform A SWOT Analysis 

SWOT analysis is an outline of the places where your business can lose or gain sales on the basis of external and internal factors.

Performing this analysis entails considering the strengths, weaknesses, opportunities, and threats that your business is likely to encounter.

Weaknesses and strengths are internal while threats and opportunities are external to a business.

Determine Your Business Goals 

Determining the goals of your business will enable you to decide on the path that will lead it to success.

To set business goals, identify the top objectives of your business on the basis of your ambitions, competitor achievements, as well as realistic growth. Separate the goals into long-term and short-term categories. Determine the key performance indicators to help you measure your goals’ achievement.

Establish Management Structure & Outline Daily Operations

The purpose of a management structure is to determine the responsibilities of your team members. With a business management structure, outlining the daily operations of your company will be easier.

That’s because the structure makes determining the persons to oversee different operations easy. Match different staff members with the responsibilities they can handle better.

Come up with management metrics to make the reporting structure clear and forward-thinking.

Layout Your Business Financial Plan 

You now have goals and a management structure as well as an outline of your business’s daily operations. It’s now time to map out the financial plan of your business.

Write down the startup costs as well as ongoing expenses. Check the available funding options to choose the best. 

Also, brainstorm what marketing plan you will want to implement (we will discuss this in-depth in step 7) and, roughly, how much execution will cost you.

Review & Revise Your Business Plan 

After compiling these elements of a business plan, go through it with somebody who will play a role in the launch of your business. Get their feedback and input. Make the necessary revisions until you feel satisfied with every section. Keep your business plan in PDF and printed versions to ensure easy access.

8. Establish An Online Presence

In the era of digitization, it's essential to establish a strong online presence for your real estate business. Start by setting up a professional website that serves as the hub of your business activities online. This site should reflect your brand identity, and the unique value you offer, while also being user-friendly.

Consider leveraging platforms like WordPress, Squarespace, or Wix to build your site. These offer easy-to-use experiences at reasonable prices. Make sure your website includes comprehensive information about your services, your mission, and the value you can provide to potential clients.

Along with your website, establish active profiles on relevant social media platforms. These will not only expand your reach but also enable you to interact with potential clients in a more informal and engaging manner.

Moreover, ensure your website URL is included in all your marketing materials and social media profiles to drive more traffic back to your site. To further increase your online visibility and credibility, consider regularly posting relevant, informative, and engaging content or articles that your audience will find valuable.

Consulting with digital marketing experts can be a great way to ensure that your web presence is robust, effectively reaching and attracting your target audience."

Having a robust marketing strategy is paramount to running a successful real estate business. Begin by identifying your unique value proposition - the specific advantage that sets your business apart from the rest. This unique value proposition will inform the brand identity for your business, influencing your logo design, core values, and mission statement, which will all serve as the backbone for your marketing campaigns.

Read Also: 11 Best Platforms For Your Real Estate Social Network

9. Develop A Marketing Strategy

Having a robust marketing strategy is pivotal to the success of your real estate business. Start by determining your unique value proposition - the distinctive advantage that sets your business apart from others. This value proposition will shape your business's brand identity and form the foundation of your marketing campaigns.

There are numerous marketing strategies that you can use to boost the visibility of your business and engage potential customers:

• Traditional Marketing: This strategy employs methods such as bandit signs, print advertisements, direct mail, billboards, radio, and TV ads. These tools are designed to target local audiences and increase brand awareness in your community.
• Digital Marketing: Involves the use of online channels to reach a broader audience and generate leads. Key tactics include maintaining a professional website, optimizing for search engine results (SEO), pay-per-click advertising (PPC), and strategic email marketing campaigns.
• Social Media Marketing: Utilize popular social media platforms like Facebook, Instagram, LinkedIn, and Twitter to engage with your audience, showcase your properties, and direct traffic to your website.
• Influencer Marketing: Collaborate with influencers in the real estate industry or related fields. This allows your brand, properties, or services to be promoted to their followers, leveraging their credibility and reach to enhance your business's reputation.
• Content Marketing: This approach involves creating and sharing valuable, relevant, and informative content such as blog posts, articles, and infographics. This strategy can establish your business as a thought leader in the industry, educate potential clients, and attract organic traffic to your website.
• Video Marketing: Make use of video content to offer virtual property tours, highlight client testimonials, showcase local neighborhoods, and engage with your audience. Platforms like YouTube, Facebook Live, and Instagram Stories are excellent channels for video marketing.
• Email Marketing: Build an email list and deliver targeted newsletters, updates, and personalized content. This strategy can help nurture leads, maintain relationships with clients, and keep them informed about new listings and market trends.

Be consistent in the marketing channels that you choose. Each of these strategies can play a significant role in a well-rounded real estate marketing plan, allowing you to reach different segments of your target audience and maximize the visibility of your real estate business.

Read Also:  10 Best Real Estate Marketing Ideas & Strategies

10. Follow Up On Leads

In the real estate business, it's essential to meticulously follow up on all leads generated by your marketing efforts. It would be a significant misstep to launch a robust marketing campaign without a comprehensive plan to track and maintain contact with your leads. Even if a lead doesn't immediately present a lucrative opportunity, nurturing the relationship could lead to fruitful opportunities in the future.

To manage your marketing campaigns and leads efficiently, consider using a Customer Relationship Management system (CRM). CRMs, such as HubSpot, AgileCRM, or Apptivo, provide a unified platform to manage and follow up with your leads. Many of these systems offer free trials or flexible pricing plans based on the number of leads you're handling.

Remember, in real estate, consistent follow-ups can transform older leads into promising real estate opportunities over time.

Read Also: Finding Motivated Seller Leads

11. Build Or Join A Support Network

The old adage “It's not what you know, but who you know,” certainly rings true in the realm of real estate. Establishing a robust network is an essential step in starting your real estate business. Real Estate Investors Associations (REIAs) are an excellent platform to begin building your network.

Your network should encompass a variety of individuals from different areas of the industry, including real estate agents, insurance brokers, private money lenders, potential mentors, property owners, and even other beginners in the business.

12. Keep Growing Your Business

After learning how to set up real estate business, the next challenge is to cultivate a customer base and create traction. Marketing becomes indispensable at this stage.

Here are some expert strategies to implement so you can stimulate the growth of your real estate company:

• Maintain a clear understanding of your target market: Always keep your ideal customers in mind as you develop and execute your marketing strategies.
• Allocate a budget for marketing expenses: Having a dedicated budget for marketing will ensure that you have the necessary resources to promote your business effectively.

• Assert a presence on social media: Social media is a powerful tool for reaching your target audience and promoting your services.
• Build an email list: An email list can provide a direct line of communication with potential clients, allowing you to update them with your latest offerings or market news.
• Encourage word-of-mouth and referrals: Happy clients are your best ambassadors. Encourage them to spread the word about your services to their friends and family.
• Respond promptly to inquiries: Quick and responsive customer service can significantly enhance your reputation and increase the likelihood of securing new clients.
• Distribute newsletters: Regular newsletters can help you stay top of mind with potential clients and keep them updated with your latest offerings and business developments.
• Cultivate brand awareness through unique content: Stand out in the crowded real estate market by sharing original and relevant content that resonates with your target audience.
• Proactively share your business activities: Let people know what you're doing in your business by regularly updating your audience about new listings, client success stories, or industry insights.

Remember, growth requires continuous effort and dedication. By staying attuned to your market and persistently striving to improve, you can propel your business to new heights.

What Are The Benefits Of Starting A Real Estate Business? 

Starting your own real estate venture can be a real challenge. Fortunately, there are many benefits that make it worthwhile if you succeed to get your startup off the ground:

• Control: Though you work WITH many people, you work FOR yourself. You become your own boss without the fear of being fired. 
• Tax benefits: Small business owners and property investors are rewarded by the government with many tax incentives. Rental income and business dividend income is generally taxed lower than income received as an employee. You’re able to write off many business expenses which lowers your taxable income. 
• Multiple Streams of Income: Real estate businesses can create income from many sources. For example, cash flow from rents, wholesale fees, real estate sales commissions, fix and flip profits, management fees, and acquisition fees. 
• Appreciation: Real estate property values and rents increase over time. Your holdings are likely to be worth more in the future, and you’ll reap the rewards when you decide to sell or refinance. 
• Financial Freedom: Implementing the right real estate strategies creates an exceptional opportunity to create enough cash flow from business and investment to exceed your financial goals.
• Security: Contrary to what is common belief, starting your own real estate business can give you more stability of income over time. Ever worry about getting laid off from your job? The real estate skills you’ll develop allow you to stay in business on your own terms. You’re in control of your destiny, not your employer. 
• Personal satisfaction: Starting your venture from scratch and growing it allows you to enjoy greater satisfaction as you achieve more in life. Your self-esteem, abilities, and personal confidence improve. 
• Creativity: Real estate professionals are creative problem solvers. Your creativity improves as you face and overcome challenges while starting and growing your enterprise in the real estate industry. 
• Build a Team: Starting and growing a business in the real estate industry gives you a chance to establish a team that you can work with. You decide to hire, retain, and replace people who will eventually run the business without your day-to-day involvement.

How Much Does It Cost To Start A Real Estate Business?

Startup costs to start a real estate business may vary and not all costs are the same depending on what state you live in. Expect startup costs to be between $5,000 to $10,000 to get going. To file an LLC, also known as a limited liability company, costs are typically between $40 to $500 depending on where you are located. Make sure to research accordingly.

The majority of your startup funds may come from office supplies, design fees for a website or logo, material costs, networking, and more. These extra costs aren’t always necessary, but will definitely boost your real estate business.

How To Start A Real Estate Business With No Money

On how to start up a real estate business, a common misconception is that most real estate investors are people who have a lot of capital when venturing into the real estate business.

However, this is not true. There are many “rags to riches” stories of millionaires in the real estate industry who didn’t have any money when starting.

The most important thing to have is the right mindset and education.

Money only follows a thorough education paired with effective action. It’s also important that you learn about creative methods of financing your real estate deals without using your money. Such methods include:

• Real Estate Partnerships (Joint Ventures): You can partner with another investor, friend, or family member who is willing and able to fund your first deals. Typically, you contribute your time, hustle, and knowledge, while your partner supplies the capital for a portion of the profits. 
• Leveraging OPM: This acronym in real estate stands for “Other People's Money.” It entails using borrowed money, often from private money lenders, and ensuring that the venture yields a return on investment (ROI) that exceeds the interest charged for the amount borrowed. 
• Owner-Occupant Properties: This entails taking out an FHA, VA, or 203k loan to invest in an income-generating investment property. This makes you a landlord and a homeowner simultaneously. VA loans require no money (0%) down, though they are reserved only for military veterans. Many people don’t realize that you can purchase a property with up to 4 units with these residential loan products. 
• Real Estate Wholesaling: This strategy entails finding undervalued properties, putting them under contract, and assigning the contract to another investor for a fee.
• Seller financing: this refers to an agreement where you purchase an investment property and the seller is willing to “carry the note,” or take payments over time instead of using a bank to fund the real estate transaction. 
• Lease Options or Rent-to-Own Investments: This involves securing an option to purchase the property at a later date for a predetermined price while renting the property in the meantime. If the property appreciates more than your option price, you can flip the property for a nice profit.

Read Also: How To Flip Houses With No Money: Top 10 Expert Strategies

The 9 Best Real Estate Business Ideas To Launch Your Career

It’s no secret that you can make money by starting a real estate venture. However, you may not be familiar with the best ideas to implement when starting out. Here are the best ideas for starting a business in real estate:

• House Flipping: This involves purchasing distressed properties, fixing as well as modernizing them before you sell them for profit. Though you may not get continuous cash flow from house flipping, you can make large, one-time profits. You can also do it as a part time venture. 
• Wholesaling Houses: You can wholesale properties by putting a property under contract at a discount, then assign the contract to another entity at a markup. The profit made by the wholesaler is the difference between the price contracted with the original seller and the amount the buyer pays. 
• Property Management: You don’t have to be a property owner to make money in the real estate industry. Starting a property management business can be lucrative and scalable. This entails handling maintenance and upkeep as well as rent collection and evictions on behalf of property owners. Typically, a property manager charges around 6-10% of gross rents collected, in addition to other fees for services provided.
• Real Estate Agent: This is the most common way people venture into the real estate industry. Formal education, state certification, and experience is required to start out as a real estate agent in some places. Real estate agents earn commissions from property sales, leases, and referral fees. 
• Real Estate Syndicator: Syndicators pool together money from many investors to purchase large commercial properties and portfolios. While having a track record and team are usually a prerequisite for real estate syndicators, this is a great example of using Other People's Money (OPM) to fund your deals. 
• Funding Broker: This is essentially a referral business that you can start by creating a list of funding sources, such as hard money lenders, private money lenders, and conventional mortgage lenders, and making a fee by sending them clients. You'll source and work with investors looking to fund their deals, then pair them with a lender for a fee of usually 1-3% of the loan amount. 
• Bird Dogging: This entails finding good deals for real estate investors to earn a flat-rate fee or a percentage of the entire deal. 
• Real Estate Photography: This entails taking professional photos for property sellers and landlords. Real estate photographers are paid by the job. The photos are mostly used for online property listings on the Multiple Listing Service (MLS).
• Property Inspections: Becoming a home inspector will not only sharpen your real estate investing skills but can also produce an income if you turn your know-how into a business.

Read Also: 10 Real Estate Entry-Level Jobs For Beginners With No Experience

Examples Of Successful Real Estate Businesses

There are many companies that have been helping people go through the process of buying and selling their homes with ease. Here are examples of successful real estate companies that are highly regarded in the industry: 

• Real Estate Maximums (RE/MAX) is a renowned real estate business that has been in the industry since 1973, primarily as a brokerage. Today, this company has over 100,000 sales agents that work in franchise-owned as well as operated offices in over 100 countries. This company is among the most productive sales forces in the U.S real estate market. 
• Century 21 is a powerhouse in the real estate industry, most recognizable as a brokerage. It’s a recognized brand with operations in Latin America, Europe, Asia, and the Middle East. It has about 7,000 independently operated and owned broker offices. It also has 100,000 associates across the world.
• Keller Williams is a recognizable global brand in the industry. It achieved 91% profitability in its U.S offices in 2012. Currently, Keller Williams has operations in over 700 markets across the world.
• Coldwell Banker was founded in 1906 in San Francisco. It has a history of offering reliable services in the real estate industry. The company has 3,000 offices in almost 50 territories and countries. It provides top-rated services as well as training to its real estate sales agents.
• Electronic Realty Associates, also known as ERA, was established in 1971 with the aim of championing a novel technology, the facsimile. This business has grown significantly over the years. Realogy, which is the mother company of Coldwell Banker and Century 21, operates ERA Real Estate. Today, it has operations in many countries including Saudi Arabia, Germany, and Japan.

Where Can I Take A Real Estate Business Course?

Real Estate Business courses offer various educational opportunities that help real estate brokers and agents all around the world. The best online real estate courses offer various teaching styles with knowledgeable expert advisors to maximize your real estate knowledge.

At Real Estate Skills, a free training course is available to be a part of the Pro Wholesaler VIP program that provides resources, educational training, and tools to new or seasoned investors on their real estate journey.

If this sounds like the right path for you, join Real Estate Skills to maximize your full potential in the wholesaling and flipping industry.

Real Estate Business FAQs

It’s our goal at Real Estate Skills is to ensure you're fully equipped with the necessary information to confidently embark on your journey on how to build a real estate business.

We've compiled and answered some of the most common queries based on our experience and expertise. So, let's dive in and explore these key insights to further enhance your understanding of the real estate business landscape.

What Type Of Real Estate Business Salary Can I Expect? 

Real estate business salaries are different from most other lines of work. Many real estate businesses are results-based, meaning you earn when you close a deal, collect rents, or have other investment income. As a business owner, you may pay yourself a salary, though the bulk of your earnings will not come from a W2 salary.

The type of real estate earnings to expect from your business will depend on your business model and how successful you are. Also, it’ll depend on if you’re doing it part-time or full-time. 

Here’s a list of the types of salaries you can expect from real estate businesses:

• Residual Income: Though not a salary, this is the cash flow you receive from investing in rental properties. When you own the right real estate and become a landlord, you should get regular rent payments from your tenants. This residual cash flow income may come from residential property income, partnership income, commercial property income, and interest income. 
• Profit: You earn money as profit after selling a property at a price higher than the amount you bought it for. The value of most real estate properties increases over time or after making improvements, like adding square footage, increasing net operating income (NOI), and cosmetic rehabs.
• Business Operation Payments: If your real estate business provides special services or engages in business activities, it should earn money from its operations. For instance, if your business has a hotel as part of its portfolio or if it engages in property management, you may earn a percentage of gross sales. This is more common in commercial real estate, for example with parking garages, restaurants, and retail businesses.
• Commissions: Real estate commissions are how most real estate sales agents and brokers earn income. In some instances, real estate brokerages pay a small salary to their agents in addition to commission bonuses when they close deals. When a Realtor lists a home, the seller agrees to pay a percentage of the gross sales price to the listing agent upon closing. This percentage is usually around 5% and 6%. From this sale commission, more often than not, half is split between the selling agent and the buyer's agent.

How Do You Get A Business Loan For Real Estate?

It’s possible to get a business loan to finance your real estate startup. Here are the options you have when it comes to getting a business loan for real estate. 

• Hard money lenders
• Conventional lenders
• Micro-loans 
• Lines of credit
• Crowdfunding for real estate 
• SBA loans 
• Rollover as Business Startup or ROBS 

Each of these options is different with its unique pros and cons. Therefore, conduct a thorough research to make an informed choice.

How Do I Name My Real Estate Business? 

The name you give your business is very important because it gives clients and prospects a flavor of the services it offers. The name of your business is also an important component of its brand image.

Here are tips to help you give your business a name:

• Consider your niche: Your business name may reflect the niche in which you operate. It should help you show your specialty or expertise. 
• Determine what makes your business unique: Choose a name that makes your business stand out in your niche. 
• Seek Help: Your team members can help you brainstorm to come up with a good business name. You can also seek help from a trustworthy real estate professional. 
• Perform a Competitors’ Analysis: You want your business to stand out from its competitors. Therefore, know the names that your competitors use to come up with a name that will make your business stand out. 
• Simplicity is Important: Settle for a unique and simple name that is easy for customers to remember. 
• Use Online Tools: Use websites that help you generate a business name using specific keywords. 
• Identify with your business name: People will consider your business more seriously when you make it your own identity. 
• Convey brand personality: Choose a name that conveys the personality of your brand or the characteristics of your business that make customers relate to it. 
• Consider first impression: Choose a name that enables your business to make a great first impression. Make it unique, catchy, memorable, and simple. 
• Ensure that nobody owns it: Choose a name that is not owned or used by another business. Check your local Secretary of State's website to check your name's availability. For instance, if you're in California, use the Name Reservation tools. 
• Check if the domain is available: Check the availability of the name on the internet including the website URL and social media handles.

What Needs To Be On A Real Estate Business Card?

A business card will help you create a great first impression and grow your network. Here are tips to help you make great business cards. 

• Use quality materials 
• Be creative with themes that feature land buildings and properties 
• Use color to stand out
• Keep your cards simple 
• Include all contact information 
• List your website and social media handles
• Be specific about what your business does
• Include a professional headshot

Can I Start A Real Estate Business By Myself? 

Yes, you can start your own real estate business alone. However, the question is; "what do i need to start a real estate business?" You will need help as your business grows. It’s important to note that starting a business in the real estate industry requires training, a lot of work, and time.

It's a seven-day-a-week business, and some clients will need real-time responses to their questions. This may mean working on weekends. Therefore, though you may start out alone, you will need help down the road.

Building a good team will help you scale and grow your business. Ultimately, the goal of most entrepreneurs is to remove themselves from the business completely while still receiving benefits.

Final Thoughts On Real Estate Businesses

Starting a real estate business can seem challenging, but with careful planning, dedication, and the right strategies, you can set yourself up for success in this exciting industry.

Remember that every real estate journey is unique and comes with its own set of challenges and victories. By staying committed to continuous learning, building strong networks, and honing your skills, you will position yourself for long-term success.

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*Disclosure: Real Estate Skills is not a law firm, and the information contained here does not constitute legal advice. You should consult with an attorney before making any legal conclusions. The information presented here is educational in nature. All investments involve risks, and the past performance of an investment, industry, sector, and/or market does not guarantee future returns or results. Investors are responsible for any investment decision they make. Such decisions should be based on an evaluation of their financial situation, investment objectives, risk tolerance, and liquidity needs.