Why Treat Real Estate Investing As A Business?

Why Treat Real Estate Investing As A Business?

Warren Buffett said, “Investment is most intelligent when most business like.”

If you treat investing in a business like sense, does that mean that real estate investors should conduct their transactions in a more business like fashion as well? Does this mean that each real estate investor should treat their investments like a business? What does all this mean? Does this place a limit on the kinds of strategies and properties that can be used? Where can one find more support and help in building a business like portfolio for their property?

What Does Real Estate Investing As A Business Imply?

Investing in a business like sense implies leaving emotions out of the deal, being better organized and using logic in our approach to real estate investing. The definition of business like can vary in its scope from describing commerce and trade to describing a profession, right down to owning an actual company. All of these definitions most likely influenced Warren Buffett’s decision to conduct his transactions in a more business like manner. It has worked for him and all his real estate investments and companies. It may also imply owning a real estate company, or owning an investment which is the opposite of managing one. Or it could simply imply acting in a business like fashion in your everyday real estate choices and investments.

Approaching REI As A Business For Investors

Taking a business approach to real estate investing has many benefits including:

  • Profitable investment decisions
  • Tax reduction
  • Organizational efficiency
  • Sound investment decisions
  • Scalability
  • Keeping personal assets separate from investment finances, assets, and income
  • Time freedom
  • Building value within the business entity

What Does It Look Like To Build A Real Estate Business?

Not everyone has visions of a traditional business with building a company or international conglomerate in order to invest in real estate. Does that mean you will need an office with hundreds of staff and go back to wearing uncomfortable clothing?

Many won’t go this route.

Some want to simply earn an extra income and build more wealth for themselves over time. Some want to build real estate empires that have a multinational reach. The idea we are getting at is how to approach this investment with a business like mentality and structure. For those who still want to scale a larger operation and own a multi million dollar company, they will find they can still do this from their own homes using their smartphone or other modern technology.

There should still be business like elements involved in spite of the size of your organization. This can involve incorporating and forming a registered business entity, getting business credit and opening business bank accounts, installing a new business phone number, hiring third party vendors to help with operations and designing a real estate website.

Properties That Qualify As Business Investments In A Real Estate Business

Many businesses will not incorporate or form a C Corporation of LLC company. It does not matter which type of entity you choose or maybe none will be used, every kind of property can be viewed as an investment

These can include:

  • Apartment buildings
  • Single-family homes
  • Office buildings
  • Industrial real estate
  • Hotels
  • Vacant land and lots
  • Retail property
  • Small multifamily homes such as duplexes, triplexes and 4 unit properties

What Types Of Real Estate Investment Strategies Can Be Used?

This can involve any type of real estate investing strategy that can be systematized and formalized into a workable business model.

The REI strategies that can be used include:

  • Fixing and flipping houses
  • Commercial real estate investing
  • Mortgage debt investing and note investing
  • Private mortgage lending
  • Wholesaling houses
  • Acquiring and holding rental properties that generate income
  • Options
  • New Construction
  • Buying, selling or leasing various real estate related rights

Finding Support In Building A Business For Real Estate Investors

Those who are new to real estate investing have very little experience in starting or running a real estate business. Where can these individuals find help to learn how to invest intelligently and build a business that can produce an income and build wealth over time?

Learning from outdated books and online real estate forums may not be the answer or even well suited for investors who want to do this intelligently and in a business like way. They should seek out reliable and organized real estate courses that use a proven system that resonates with their overall goals. They can also seek out mentors or coaching programs that help them to learn business building methods in general or combine this with a real estate business model.

Are These Methods Best For Everyone?

Not everyone is cut out for full time investing or running a real estate investment business. This is okay. But everyone can take advantage of learning to be more business like and intelligent when it comes to investing. This can relate to even something as simple as renting your old home, flipping a few houses a year, or investing in real estate start ups.

To get the best results and reduce overall risk, and fast track one’s goals while avoiding complications, they will see the benefit of getting educated in this approach toward investing using the best methods for their personal aspirations and goals.

We will be happy to share with you our experience and the steps we took to launch our Real Estate Investment Business, just let us know and we will schedule some time to meet and tell you all about it.

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