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9 Lessons For Those In The Real Estate Business

07.19.2009 · Posted in Home and Garden Articles

At a recent mastermind meeting with real estate entrepreneurs, I asked the following question:nnWhat lessons have the real estate bubble and the recession taught us?nnI was surprised to hear that many of the real estate agents haven’t learned their lessons. I’ve learned many. In fact, I started a little notebook in which I detail new lessons as they are delivered to me – which is just about every day. I’m hoping to keep this notebook at the ready for the next recession, whenever that may be. nnLet me share some of the lessons I have learned.nn1. Lines of credit CAN and WILL disappear. Don’t make the mistake of thinking your personal or business lines of credit can be taken for granted. It’s likely that, in the worst of times, when you need them the most, they cannot be counted on. The lesson is that it’s necessary to build large cash reserves. Maybe even draw on your credit lines when they are available and put the money into a savings account and make the interest payments.nn2. New credit will be hard to obtain. Your credit score won’t matter very much. See number one above.nn3. Business opportunities change quickly. You must be proactive and spotting and adapting to these changes. What are larger businesses doing to adapt? Copy their strategies within your business.Where is the money in your marketplace. Pay attention. Follow the money. Be decisive. Change quickly.nn4. Your clients will be very nervous about buying and selling. Try to understand their point of view, this shift in their mindset. Alter your client communications in accordance with this shift.nn5. Always keep your overhead low. Overhead will take you down very quickly. Don’t take on large office space. Don’t take on too many employees. Don’t take on large fixed expenses within your business. Try and keep your business expenses variable. You can reduce these expenses quickly, if need be.nn6. Do what it takes to improve customer service immediately. When the market was moving like gang-busters, agents let their customer service slip. This was a mistake, and one that needs to be corrected now. Go above and beyond for your customers. Do not give them reason to take their business elsewhere.nn7. Look for ways to offer lower prices on services or products. When money becomes tight, your clients will look more to price than anything else. Be prepared to quickly adjust your pricing to remain competitive. nn8. You have to have multiple income streams in place. When times are good, prepare for leaner times by creating multiple income streams. Diversify, so that losing one source of income doesn’t mean disaster. Multiple sources of income are like life rafts on a big ship; they can save you from drowning.nn9. Cash is king, and it makes kings when times are tough. If you have cash built up for the bad times, you could take advantage of many opportunities during bad times. Look around. Properties can be bought for pennies on the dollar; stocks are languishing at never-before-seen prices in some cases. Buy when others are selling, and sell when others are buying, and you won’t go wrong.nnI hope this article helps you eliminate mistakes in your business. Lessons will continue to be delivered to you, until you finally learn them. Lets learn them the first time around!

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