Ask an MBA: Starting My Own Real Estate Business

ask an mba

I have always wanted to be my own boss. I want to start multiple businesses and have lots of ideas but I can't get a business loan at this point in my life and have no clue where to find people to invest or how to get people to actually invest.

The first business I wanted to start involves flipping houses and have rental properties because I really like real estate and the design aspect of it. But maybe I should start with a franchise of some sort with a tried and tested business plan so that investors would feel safe with a first time business owner? 

P.S. I am only 21 years old and also worry that I will be underestimated because of my age and the fact that I am technically a college dropout.

Hi John,

Let me say first, your age is irrelevant, and so is your (formal) education. Look at the number of people who barely made out of high school who became huge successes (Richard Branson of Virgin actually dropped OUT of high school and began starting businesses at 17. His first three failed and, well, you know, how his story turned out).

NEVER let a lack of a degree stop you. The biggest tools you need are desire, ambition and most importantly, grit. However, education is crucial in the form of first-hand knowledge in your venture of choice.

I'd say you are already further along than most because you have a strong desire to start a business and clear ideas about what interests you. Some background on me: I spent most of my career in the music business. I was a staff attorney at a major label, working my ass off 7 days a week to make other people richer. And it hit me; I need to have my own thing. 

One problem: I didn't know what that "thing" was (although I was always fascinated by marketing). However, when I tried to get music marketing jobs, I was basically told to stick with being a lawyer bc no one thinks lawyers can wear a different hat. Someone once told me to do what you're passionate about. But I didn't see a strong financial future in being a Detroit Lions fan. So I had the desire but not the idea. 

But by putting the thought out there that I wanted to be an entrepreneur I guess I attracted the right opportunity because a few months later, a friend at the label I worked asked me to join him in starting a digital music biz -- which became one of the first digital marketing agencies for entertainment. Now I have over 15 years of marketing experience because I found a way to bend the sky toward me.

In other words, I created an opportunity to do marketing when no one would give me one. Of course, that business was built on the prior experience I had in the music business, so it's not like I started from scratch with no knowledge.

And here's the best advice I can give -- whatever business you decide to pursue, you should first get experience in that field. And the reason is simple: you will have direct knowledge in that area and make less mistakes when you strike out on your own. Plus, you will make contacts in that field by virtue of that experience.

So if you dream about owning a restaurant, you'd be nuts not to work in one for a good amount of time first. Plus, it would be a lot more likely to attract eventual investors if you limited your downside (ie increase your chance of success by knowing what works and what doesn't work in your field). When you know those things, then you allow your creativity to kick in to show how YOU will do those things different.

And if you decide you want to save money and purchase a franchise, then MAKE DAMN WELL SURE you work at least part time in one of those (or a very similar) franchise. If you want to buy and sell real estate, then study and get your sales license and work part-time for a broker. You will not only get a greater sense of the business, but you'll probably find a mentor in the new people you work with or other interested investment property partners.

Plus, if you do sell a property or two, you will start to build capital toward investing. All this can be done on a part-time basis. And when you invest in your first house, try to do it with several people. Maybe you can do the fix-up work as your main contribution. Or you may have to invest capital but you are a more attractive parter because of your handy-ness and real-estate experience. 

Also on the education front, read as many books as you can about the field you choose. Even reading a couple per month will help bring insight and make you feel like your are making progress. You don't even need to buy them; hit the town library. Or buy used copies on Amazon. Reading is a GREAT place to start to figure out which are interests you most.

Here's another piece of advice that's crucial. Start SOMEWHERE. Even the smallest step will create momentum. People get psyched out when they start to think about all they have to do to build a business. It's like exercising. You don't want to start doing 100 push-ups a day if you haven't been doing any. You'll set that goal of 100 and give up too soon if you can't hit it. So start with 5 per day. Then 10, 15... And if you get stuck on 15, you keep pushing yourself to get stronger and you'll break through. It's the same with business. Big dreams are great, even vital. But start by reading a chapter a day. Just START is what I mean.

Also, take comfort in the fact that most people who start successful businesses have a regular gig, and work on the new business in their spare time. I know how hard it is to start a new business with a regular job AND a family. But if you could put even a few hours aside per week to work on a venture, you will feel like you are making progress and that will carry it through to fruition.

Remember, it's a process and you don't need to be a millionaire overnight. But don't let anyone ever tell you you can't achieve whatever you desire. Tune out the haters and maybe more important, tune out that voice we all have in our heads that says how tough it is or how we'll never get there because of our current circumstances. 

The ONE THING you have control of in your life is how you think. So start believing and start taking action no matter how small. 

My mother said to always stay hydrated; I say to always stay motivated!


ask an mba


John Lavallo57 Posts

John is Columbia Business School MBA with expertise in marketing, business leadership, and law. John is a successful entrepreneur who took his first company public. He currently resides in New York City.