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The 3 Rules of Bootstrapping for Real Estate

June 28 2011

"Bootstrapping" is a business term that refers to start-up companies that use sales results to drive company growth, rather than fundraising efforts like seed capital or venture capital.

In a way, your broker is your investor. They provide you with your office space, training, transaction services, and a brand to get you going.

Bootstrapping is an excellent way to look at growing your real estate sales business. You can begin by understanding what your income goals are for the first year, then create a path to get there.

Rule 1 of Bootstrapping is to get started immediately. The best path to success is to begin selling immediately. It takes 30 to 120 days before commission checks start rolling in, so you need to be prepared. Focus on properties that are selling in your market. Many agents make the mistake of going after the whales, those expensive homes that bring in the large commission checks. Don't waste your time. Go for the properties that are selling an average of 30-60 days on market in your area, not properties that have an average of 300 days on market.

Rule 2 of Bootstrapping is to prospect like crazy. As you can see from this Tom Ferry video, it takes 80 conversations to generate a sale in real estate. If you want 10 sales, you need to make 800 calls.

Keep track of who you are calling. There are numerous tools listed here on RE Technology for managing your contacts; these products are called "CRM" (for customer relationship management). You need one! Try Top Producer by, AgentAchieve by Corelogic, MarketReach by iHouse Web Solutions, MLS-Office, HomeFinder by Delta Media, SalesAspects by NetAspects. There is a huge list in our product directory.

Here is another hint – the people that offer this software have an insane amount of knowledge on how to use these tools to convert prospects into sales. Taking some time to get a demo of their software is a great training exercise. Many of these companies also offer free webinars.

Rule 3 of Bootstrapping is to be thrifty. Before you buy any software, you should definitely contact your Association of REALTORS® and MLS. Gaining a deep understanding of using the MLS system is a key ingredient to your long-term success – especially the Tax System, which provides you with access to homeowner names in the area.

Additionally, MLSs and Associations often have relationships with companies that allow you to get access to products for free or a discounted rate. Here on RE Technology, those products have the black label indicating that they are supported locally.