As a real estate investor, your business relies on being able to buy properties quickly—and turn them over just as quickly. You can’t afford to waste time unless you want to waste money, too.
It’s not uncommon for preventable bottlenecks to slow things down. The key word there is preventable. If you know how to eliminate them, you can streamline your turnaround process and collect your profits more quickly than ever before.
As you might expect, you first need to identify the bottlenecks. Then, you need to figure out how to keep them from clogging up the cash flow.
Identifying the Bottlenecks
Identifying bottlenecks requires input from everybody on your team. Why? Because the issues that appear to be causing the problem may not be what you think they are.
For example, it’s pretty common that the last person or step that affects the end result to be blamed for a problem. It’s not always easy to identify problems along the line, which is why it’s essential to look at every step before zeroing in on the issue.
There’s no point in moving forward until you’ve identified the real issue that’s affecting your business. You should get input from all of your team members. Don’t allow people to belabor the point—each opinion should be stated only once and then discussed as needed.
Brainstorming Solutions
Next, it’s time to look closely at the bottlenecks you’ve identified to figure out how to open them up and get things flowing again.
Two of the most common types of bottlenecks in the real estate investing business are:
- Activities – processes or tasks that people need to do to keep things moving; and
- Meetings – gatherings of you, your team, sellers, buyers, lenders, or contractors that end up being rescheduled or missed.
The fact that you’ve identified these bottlenecks is only the first step. Now, you need to get more input from your team and figure out how to get rid of them.
For example, you might decide to reassign or restructure a particular activity so it can be done quickly and efficiently. Or, you might decide to streamline meetings, combine them, or even get everybody to agree on a set time for regular meetings so that you don’t have to worry about them.
Regardless of what you decide to do, it’s important to make sure that your whole team agrees on the solutions. It may take some time, but be persistent. There’s nothing to be gained by going with a solution that part of your team dislikes or even resents.
Keep in mind that you may have to bounce back and forth between the identification and brainstorming phases. The solutions may not be readily apparent and you may need to engage in a good deal of push-and-pull before you arrive at the result you want.
In the event that you can’t arrive at a solution, you may need to track activities for a while or even document individual processes to figure out what the problem is. Be patient, and eventually, you’ll arrive at a solution that works.
Solving the Problem
The final step is to take your resolution and break it down into concrete action steps. What needs to be one to eliminate the bottleneck and get things moving again?
The action steps should be clearly defined and agreed upon by everybody on the team. Then, each action step should be assigned to somebody with a deadline for completion.
If you have built consensus on your team and taken the time to arrive at the correct solutions, then it should be smooth sailing from here on out. However, in the event that you run into further issues, you may have to go back to the drawing board and revisit the solution until you get it right.
Conclusion
The only way you can make a profit is to turn properties quickly and efficiently. The key to doing so is acting quickly whenever an issue arises so that you can come up with an effective solution for it.
Once you have done that, you can move forward with a new sense of drive and purpose without feeling dragged down…or waiting for that next deal to finally sell.