Rich Dad Education Blog

As entrepreneurs, our goal is to find people with problems for which we can passionately produce solutions for that create a profit. The realm of real estate holds far more opportunities for generating revenue than the traditional means of simply buying, selling, or renting properties. Remember, the more problems you solve and the more people you help, the greater the value you will create and the more appreciation you will receive. This appreciation is usually expressed in the form of money. The opportunities to create a profit are there; you just have to employ a little entrepreneurial creative thinking!

While you are building your real estate business, it is possible to create multiple streams of revenue that complement your real estate business activities. For example, while managing a large portfolio of several thousand residential units, I was struggling to control costs, particularly the cost of payroll. In an effort to control costs and minimize rental income lost to turnover time, my associates and I began negotiating with a contractor to establish a turnkey price for cleaning vacant apartments between tenants. Just as we came to an agreement on a price and standard of quality that everyone was satisfied with, we were informed by the contractor that he was offered and had accepted a bigger contract for cleaning commercial buildings.

Refusing to become discouraged, I turned to a fellow investor who I knew used the cleaning services of independent contractors and I asked him if he would be interested in vamping up his business by creating a company to fill the need that was just created. I helped him develop a system that worked, and within a year or two, he was billing between five and twelve thousand dollars per month! His company now does turnkey cleaning and painting for a number of large and small owners and management companies. His people are able to knock out several units a day, including emergency turns so the owners don’t lose a lease.

A student from one of our property management classes found a niche working with banks and Real Estate Owned (REOs) before the outbreak of the foreclosure crisis. When a lender takes ownership of a property as a result of the foreclosure process, her company is hired to go in, “trash out” the property, change the locks, get it ready according to the lender’s instruction to be listed on the market and maintain the premises. She simply arranges for the labor and manages each project. Her side business did several thousand dollars per month before the foreclosure crisis. Because she is also an investor, she has a valuable inside opportunity to pick up the properties she wants and still get paid for the ones she preps for the banks. What a fantastic concept for investors specializing in foreclosures and rehabbing!

Now, what about the areas of real estate management and sales? Most states require those who are involved in the sale or rental of real estate for a fee, or for another, to be licensed in real estate. With the appropriate licensing in place, a property management company can solve an owner’s problems by having their team manage the property, by purchasing the property, or by listing the property for sale. Surely you can see the potential for profit that this type of company could make in management fees and commissions, and by buying properties at good prices or through terms agreements. If you are building wealth with your own cash flow (rental) properties, this could be a wonderful complement to your business. Wealth Intelligence Academy’s “Property Management and Cash Flow” course is the perfect source for practical knowledge on this strategy.

Property owners are not the only people we encounter in our real estate businesses. Right now, there are many people who are having trouble getting financing due to stringent loan qualifications. The problem could be a matter of not knowing where to find non-conventional financing, it could be a need for credit repair, or any number of other things, but they are all problems in need of a solution. Becoming an affiliate, consultant, or independent contractor for a reputable credit enhancement and/or lending organization may help you to help others achieve their goals while enabling you to achieve yours. Many of these companies have very good training and support programs so you can learn and earn! If you are an investor focusing on lease options, this type of service integration would be a natural choice.

As with all business plans and strategies, you should seek legal advice and comply with disclosure, licensing, and any other requirements in the area in which you are investing. The point is that there are as many opportunities to complement your real estate investment business as there are consumer problems that need to be solved. Oftentimes, you will not be the one who does the actual work; rather, you will simply create and implement a system that is effective. By widening the scope of services that your investing business offers, you can not only generate extra income, but you are likely to expand your investing network. People do business with friends. If you develop and cultivate relationships with banks, property owners, and potential purchasers, you will become a friend with whom that they can do business. If you have yet to explore all the options open to you as a real estate investor, I encourage you to give this subject some consideration. These ideas could be part of a great transition into the arena.