by My Commercial Capital | Apr 10, 2024 | Blog
If you have an interest in real estate investments, you have probably seen shows or heard success stories from those who fix and flip homes. However, there is more to success than you may think. It takes strategic planning and careful research to succeed in this type of investment. Therefore, these are a few tips to help you get started.
You Need a Team
First, you need a realtor who has extensive experience and knowledge about the area. These individuals are key assets because they can find you the exact right property, one that has significant potential and a price below the market. You also need at least one contractor who can provide high-quality service at a reasonable cost. This individual should be available to help on your project quickly because every day you hold your property, you have to pay for it. Therefore, you want to shorten your holding costs as much as possible.
If you haven’t purchased or rehabbed a property before, find a mentor who has been successful in the industry for some time. This professional can walk you through the process, allow you to watch several investments and help you find your first. Also, add a mortgage broker, CPA and real estate attorney to your team.
Set Realistic Goals
It may seem like you can get rich quickly after a few fix and flip investments, but that just is not the case. Although this strategy can be lucrative over time, it may take several years and properties to create a sustainable income, and the work doesn’t stop there. Therefore, you need to set realistic goals.
Identify what types of properties you plan to flip. Then, figure out how much you have to spend and how many projects you can complete at once. Learn about true rehabilitation costs and timelines and how long you can pay your mortgage before you need to sell your property. Consider how many projects you want to complete in one year, three years, five years and 10 years. You should also determine how much you plan to or need to make on each flip.
Research the Market
The real estate market has changed over the last few years, especially in some areas. You cannot just rely on your team to guide you into your projects. You also need to research current market trends and local inventories. You need to gain extensive knowledge and continuously research every market you plan to invest in. Cities and counties can have very different trends even if they are right next to each other.
Success as a fix and flip investor requires hard work, dedication and knowledge as well as reliable financing and teamwork.
by My Commercial Capital | Mar 15, 2024 | Blog
With these strategies in place, you will find your business growing before your eyes.
by My Commercial Capital | Feb 14, 2024 | Blog
If you have been seeing increases in sales volume but you aren’t seeing a proportional increase in your profits, the issue might be how you manage your cash flow. It’s entirely possible for a business to make more money than it needs and still wind up with nothing to show for it due to bad money management that creates bottlenecks in productivity and causes unnecessary late fees.
Timely Payment and Costs of Doing Business
When you establish a track record of timely payment with your suppliers, you build relationships that can lead to discounts when you buy at volume or streamlined delivery when you run low on supplies early, but if you are constantly paying late, it’s harder to stay in good standing with the companies that can do you these favors. More importantly, it will invoke penalty payment clauses in your utilities, loans, and credit lines if you have payments due and no working capital because of your own customers paying late.
Cash Flow Management Options
The key to managing cash effectively is having resources that let you meet your obligations when you have payments due but you are also waiting on payments that are incoming. There are several ways to do this, including dipping into your own cash reserves, but the most effective way is often a dedicated credit resource.
Some companies manage this with real estate bridge loans that can be paid back as payments come in. Others finance invoices directly or open credit lines that are only used when there is a temporary cash shortfall. If you do set up a reserve fund to manage your working capital, make sure it is separate from your long-term cash reserves or you will end up using your fallback burn time for everyday cash flow delays.
Streamlining Costs for Capital
Obviously, the key to maximizing your profits when you need to finance outgoing cash is to find the method that gives you the best value for your money. Often, credit lines are chosen because they have short grace periods before interest is charged, so an advance of a day or even a week might not cost anything. Others choose instruments like invoice financing because it lets them outsource a portion of their labor, adding to the value of the financing deal.
The easier you make it to pay your own bills on time when your customers pay late, the fewer unpredictable extra expenses you will have eating up your bottom line. The next step is to figure out which cash management tool fits your business model and industry the best. Often, the best way to do that is to review offerings from lenders, so start your research today.
by My Commercial Capital | Jan 10, 2024 | Blog
If you have been in business for any length of time, you understand the importance of developing and keeping to a budget. However, as a small business owner, you may find it challenging to do everything you need to do on your finances. Because you understand the day-to-day expenses, it can become easy to fall into financial anxiety. Therefore, these are some strategies you can use to reduce your expenditures and stay within your financial limits.
Use Free and Low-Cost Marketing Opportunities
Technology has provided incredible assets that you can use to increase your business. Some of the greatest tools you can use are the incredible digital marketing opportunities. As you build a strong website, you can include blog posts and other content that attract customers. You can also use your social media accounts to encourage engagement and help your target market get to know you and your business. You can also choose pay-per-click options that give you complete control over how much you spend.
The key to a successful low-cost digital marketing campaign is maintenance. You need to make the effort to consistently update and maintain your platforms and website. Constantly give your customers new information about you, your products, how to use them and other topics that interest them.
Watch Your Office Expenses
It can be tempting to overspend on your business. You want to prepare for future expansion expectations. However, you should evaluate every purchase, from new employees to new equipment and larger office space. Determine what you need immediately and what you can outsource either to independent contractors or companies that specialize in these areas.
For example, do you absolutely need an accountant or can you outsource this work to a reputable firm and reduce your costs? Can you lease some of your office space out to other companies and earn a passive income that increases your cash flows? Also, compare the advantages and disadvantages of leasing versus purchasing your equipment.
Focus on Organization
You should know where everything is at any time. You need to understand where and how much inventory you have and what orders you have to fulfill at that moment. Without organization, you can lose supplies or overspend on raw materials because you don’t think you have any on hand. It can also take time for your staff to find what they need, wasting your human resources.
To truly control your budget and expenditures, focus on organization. Then, track what you purchase every month, so you know where your money goes.
Running a small business is complicated and time-consuming, but with the right tools and a few money-saving strategies, you can make sure your company stays within its budget.
by My Commercial Capital | Dec 13, 2023 | Blog
Your organizational culture is evident in three dimensions: visible reminders that symbolize what you stand for, mindsets that reveal the beliefs and attitudes of your staff and visible and invisible behaviors within your company and what triggers them. When you find a discrepancy between these dimensions or find that they are not acceptable, you may desire a change. Therefore, consider these strategies.
Change Behaviors First
Your staff pays very close attention to the actions and reactions of your company’s management. You can share every lofty ideal with your staff, but if your actions don’t back up your words, they will not believe you, and they will follow your actions. You build corporate culture on actions. You can create programs that instill the ideals you desire. However, if you do not act and react in a way that supports and adheres to these ideals, the company will not adopt them.
Therefore, examine your behavior and that of your management. Give them feedback that creates behaviors that your staff can act on, observe, measure and repeat. Show them what actions to take during specific situations. For example, model behaviors that encourage collaboration and empowerment. However, start with a few key actions at first.
Identify and Develop Informal Leaders
You may have observed individuals within your company who do not have titles but whom your employees go to for help, advice and guidance. These individuals are valuable. They can help you motivate your staff and encourage them to seek excellence. They are role models and foster communication within their teams and the organization as a whole.
The great thing about informal leaders is that they can help you change your culture because they will be the first to adopt them. They tend to be eager to adopt new technologies, behaviors and experiments.
Avoid Changing Everything at Once
Company cultures are embedded into the company and staff deeply and are difficult to change all at once. It requires steps and degrees of change. Your culture is not a piece of programming that you can quickly change. It involves many people who have spent, sometimes years, learning how to act in your company. The truth is, no culture is completely bad or good. Instead, all need improvements.
Therefore, take time to evaluate the traits you want to keep and those you want to change. Start slowly, one value at a time. Search for those that are consistently negative or that could lead to corporate or staff harm. Start with these.
These are only three strategies you can use to change your organizational culture. Test them and seek out additional strategies to make your company great.
