Today, I'm excited to share a three-part conversation with Ajay Sharma, in which we explored the entire sales framework he and his team use to acquire land.

We're breaking down the whole range of what goes into a successful land acquisition process. This includes boosting your probability of success with every lead, using a proven script for any occasion, handling objections, and building a rockstar team that can implement these processes.

I divided our lengthy discussion into three parts: Lead Generation (Part 1), Seller Negotiation (Part 2), and Building a Team (Part 3). You can jump right into the part that interests you or listen to all three parts in order.

Part 1: Lead Generation

In the first of this three-part guide to land seller negotiation (see video above), Ajay breaks down his lead management framework, leveraging the phone call's power.

He shows how to identify and eliminate “deal killers” before even picking up the phone and demonstrates triple-dialing leads within the first 48 hours and scheduling appointments. Once a lead is captured, Ajay lays out his three-bucket system for managing warm leads.

But it's not just about the frequency; it's about the message, too. Ajay talks about why building rapport and working through objections over the phone are important, and what you can do when crickets over text sometimes happen.

Part 1 Links and Resources

• Assets for Acres (Ajay's website)
• What Is a CRM?
• 144: How Dave Denniston Builds Winning Teams for Multiple Businesses
• 031: How Brandon Turner Became a Powerhouse Influencer in the Real Estate Space
• 091: How JT Olmstead Takes Down a Monster Land Deal
• Text Marketing 101 for Land Investors by Callan Faulkner
• A marketer’s guide to natural language processing (NLP)
• Mojo Dialer
• PATLive (REtipster affiliate link)
• Land id (REtipster affiliate link)
• Launch Control (REtipster affiliate link)
• Download the part 1 transcript

Part 2: Seller Negotiation

The real salesmanship happens in the second part of this three-part series. Ajay unpacks how to connect with the seller, present the offer, and handle any objections that might come up.

Ajay employs the “past, present, future” questioning technique. This helps uncover the seller's pain points and potential future objections. He also outlines the four common deal killers—certainty/risk, timing, partner/spouse, and price—and how to proactively address them during the conversation.

Ultimately, the goal is to help the seller decide whether to work with Ajay's team or not. Ajay underscores that the job of a land investor is about helping the seller achieve their goals.

Part 2 Links and Resources

• The REtipster Seller Financing Masterclass
• The Last Loan Calculator You’ll Ever Need! ➕➖✖️➗
• 10 Seller Objections Handled For You with Jennie Hudspeth | 069 (DealMachine Podcast)
• Everything You Need to Know About Using Tie Downs in Sales
• Andy Elliot on Instagram
• Never Split the Difference by Chris Voss
• PandaDoc (REtipster affiliate link)
• Download the part 2 transcript

Part 3: Building a Team

Welcome back to the third and final part of the Land Seller Negotiation guide! This time, we're looking at the finer details of how to handle all of what we've discussed so far. And, you guessed it, it's all about building the right team and equipping them with the tools to succeed.

In this video, Ajay explains how to find the right people. He stresses the importance of a cultural fit test called a “road trip test” to see if you'd enjoy being around them for extended periods. When you find the right people, you also have to train them. Ajay is a firm believer in the “I do,” “we do,” and “you do” training process, which he will detail in this video.

Ajay believes that your team is only as good as its input. Without proper training and support, no lead generation strategy—no matter how brilliant—survives first contact.

Part 3 Links and Resources

• What Is a Virtual Assistant (VA)?
• 171: Breaking New Ground: Tips from Jaren and Drew’s Land Mavericks Playbook
• 020: How to Crank Out Dozens of Land Deals in Year One – Interview w/ David Denniston
• Learning the Language of Land Investing: A Beginner’s Guide to Common Terms and Definitions
• The Hire Talent – The IC Behavior Aptitude Test
• The Nine Enneagram Type Descriptions
• Alex Hormozi's YouTube Channel
• What It Takes by Stephen A. Schwarzman
• Ajay Sharma on Instagram
• Pebble (REtipster affiliate link)
• Loom (REtipster affiliate link)
• OpenPhone (REtipster affiliate link)
• Download the part 3 transcript

Your Turn to Implement Ajay's Lead-to-Deal Strategy!

Ajay's battle-tested strategies can transform your land investing business—if you do them right and play to your strengths. The better part is identifying which of his strategies makes sense for where you are in your land investing journey and whether they're the right tools for the job.

If you're ready to see results, check out episode 132 of the REtipster Podcast on combining these techniques with Callan Faulkner's cutting-edge marketing strategy. Advance your real estate sales and marketing game with two of the best minds in the business!

The post The Complete Guide to Land Seller Negotiation and Deal Closing With Ajay Sharma appeared first on REtipster.

“How much should I offer for this property?”

It's a crucial question because your offer price has everything to do with your ability (or inability) to make money on each deal.

With this in mind, I'd like to explain the basic math I'm using to make offers on vacant land properties.

The Challenges of Pricing Offers

For land investors, there are several challenges with formulating offer prices.

Even if we assume we've made a perfect valuation (which is rarely the case because valuing land is often tricky and subjective), our offer price may go higher or lower based on a few things.

1. The desirability and uses of the property.
2. The market demand and speed of selling where the property is located.
3. If we're willing to make any improvements or changes to force appreciation, the property's value will go even higher than it's currently worth.

If the market is hot and/or the property is highly desirable with several potential uses, we will have a reason to offer more money.

On the other hand, if the market is slow, if the uses are limited, and if we're not planning to make any changes or improvements to the property, we'll want to stay more conservative with our offer price.

The Difference Between Hot and Cold Markets

Another challenge with pricing offers is that the market is always changing.

When I started investing in land in 2009, the market was very slow. I could offer absurdly low prices and get plenty of offers accepted.

However, as the years have passed, property values and the demand for land have increased, and the land-flipping industry has become more competitive. Making absurdly low offers doesn't work as well as it once did. If I wanted this business to keep working, I had to offer more and work with thinner margins.

Depending on how I determine a property's market value, I'll typically adjust my offers up or down as a percentage of what I think it's worth.

The Sliding Scale Offer

Depending on the competitiveness of the market where I work, the highest and best use of the property, and how quickly I think it will sell, I use varying sliding scales to determine offer prices. The offer ranges will change based on what I believe a property is worth.

For example, if I'm working in a market where land isn't selling quickly, the subject property isn't particularly unique or special, and/or there is no real competition from other land investors, my offer prices will be less.

On the other hand, if I'm competing with other land investors for a highly desirable property in a market where properties are selling quickly, and if I'm confident about the property's true market value, my offer prices will be higher.

Want to run the calculations yourself? You can do it with the calculator below!

Note that I don't make offers on anything with a market value below $2,500. When a property is this cheap, any profit I make can quickly be eaten up by closing costs or property taxes. Ultimately, the juice just isn't worth the squeeze.

Also, keep in mind that I don't stick to this chart with militant perfection.

If I'm dealing with a property that is unique in some way (e.g., if a seller is unusually motivated, the property has a peculiar problem, the property has a special selling point, etc.), I may deviate from this to some degree, but these charts give me a point of reference I can use, depending on whether I'm working in a hot or cold market.

If the seller appears highly motivated or apathetic about their property, my offer will be on the lower end of the range I've set for myself. If I think they'll need a higher offer, I'll lean towards the higher end (but I rarely exceed it).

Of course, there's nothing magic about this set of numbers. Yours could be different and move at different intervals, and it could work out just as well (maybe even better, depending on who your seller is and what markets you're working in). This is just a basic guide I put together for myself, so maybe you'll find it helpful, too.

The Importance Of Price

Your offer prices will play a major role in the overall scope of your transaction. With the right number, you'll have a grand slam deal. With the wrong number, you can lose a lot of money very quickly (or lose a deal altogether)

There's a saying a lot of real estate investors like to throw around:

“The money is made when you buy.”

It's true. If you make the right assumptions about a property's market value and have an accurate idea of what your holding costs, closing costs, and improvement costs (if any) are going to be along the way, you can essentially write yourself a paycheck, simply by choosing an offer price that will allow the necessary room for your profit margin, however big or small you'd like it to be.

Base Your Offers On Math, Not Emotion

What I love about this calculator is that it tells me in very plain terms what the consequences of my numbers will be, for better or worse.

If I stick to my business model and keep my emotions out of the equation, I need to ensure my Net Profit and ROI are in line. This all starts with finding a reasonably accurate market value for the property and keeping the offer price within an acceptable range.

This approach helps keep my emotions in check so I can decide based on what the data says.

Am I going to miss out on some opportunities because my offer prices are too low? Absolutely.

Am I willing to compromise my business model because a seller might not accept my offer? Absolutely not.

YES, I have to play the numbers game and make a lot of offers. Do I hear “No” much more than “Yes”? Of course!

But what do I get in return? I get peace of mind.

When someone does accept my offer, I can be 1,000% sure I'm holding the deal of a lifetime in my hands.

And it's worth the effort! We can reap huge benefits when we stick to our guns and make data-driven decisions. If there's anything I've learned about real estate investing, it is that data-driven decisions beat emotional decisions every time.

The post How Much Should You Offer For That Property? appeared first on REtipster.

Visit the Updated Forum!

We recently made some major updates to give this online community a huge facelift, and I wanted to take a moment to let you know about what's new!

History of the REtipster Forum

When the forum first went live in 2020, the software we chose for this forum turned out to be problematic.

Not long after we launched it, we learned that the software was creating some big SEO issues for REtipster.com as a whole. As a result, we had to lock the forum down and make it visible only to registered, logged-in users.

This was a big disappointment at the time because our biggest goal with this forum was to grow our community and attract new voices worldwide. By making it private, many people couldn't find us as we wanted them to!

Fast-forward to 2024. After four years of limping along with the wrong software, I finally bit the bullet. I invested a sizeable amount of money in migrating our community to a new forum software. So far, it's been a huge breath of fresh air!

This new forum allows all the same users to log back in (after resetting their passwords) and pick up where they left off.

Join the Party!

If you haven't visited our forum in a while, you should check it out!

And if you haven't been to our forum before, this is your formal invitation to join the party!

This is an incredible group of people, with thousands of registered users, and it's only going to get better now that we're working with a vastly improved platform.

Give, and You Will Receive

I learned years ago that when you give more of yourself, your ideas, your time, and encouragement to others, it will return to you in spades. Don't hold back from giving to your fellow forum members; good fortune will come back to you.

Complete Your Profile

Whether you create a new account or log back into your existing account, be sure to complete your profile! Let the community know your real name, where you're from, your website URL (if you have one), your specialties, and what kind of value you can bring to the community.

Just click on your profile to get started.

From within your account, you can add your bio, where you're located, add your website URL, and let the community know your interests and areas of expertise.

This isn't the place to hide behind an obscure username or fake picture. It's a place to be real so you can network effectively, ask for help, and offer help to others so we can all get better at what we do!

Share Your Experiences

If you've done a recent deal or learned a huge business lesson (from a huge success or a disastrous failure), share it on the forum! Many people stand to benefit from your experience, and you can quickly become a well-known and respected community member through your willingness to help others do better.

Ask a Question

Chances are, you're stuck on something. If a person is actively trying to move forward in the real estate business, they're likely stuck on something, and if they aren't currently, they will be soon. There are no dumb questions. If you're confused about something, dozens of other members have the same questions.

This is a safe place to ask those questions! You might be surprised at some of the brilliant feedback you'll get from other members.

Post a Review

Think about the latest real estate-related thing you paid money for. If there's a product, service, software, book, course, or anything else you have recent experience with, let our community know your experience! Other people need to see if you had a great or terrible experience with it.

Check out the Reviews & Recommendations section and post your experiences here.

Doc Swap

Do you have a valuable contract, disclosure, affidavit, letter, or other template that has been useful to you? Are you looking for some examples from other members of our community?

Be sure to visit the Doc Swap section of our forum, where all members are free to request and share the most valuable documents in their arsenal!

Network Like a Pro

Want to connect with other investors in your market or find out who you can help with your professional services?

Check out the Networking category, where you can discover other aspiring real estate investors who are either in your same geographic area and/or working in the same niches and specialties as you!

Build a Reputation. Make a Name for Yourself.

Remember that everything you post on this forum can boost your career, reputation, and respect among others in the real estate industry. Leave thoughtful, well-articulated, and helpful responses. Ask well-thought-out questions that show the community you've spent time and energy thinking through the issues ahead of time.

What Can't You Do?

Like any good forum, there are some ground rules you should know about.

These general guidelines should be followed to keep this forum a helpful, meaningful, and safe discussion place.

No Self-Promotion of Spam

This forum is not the place to advertise your site, property listings, or affiliate links. Any self-promotion for your products, services, paid content, and irrelevant links aren't allowed. Doing so will often result in removal from the forum.

Be Specific and Helpful

This is a place to ask well-articulated questions about specific issues and offer direct and useful feedback. Open-ended announcements, requests for deals, vague or incoherent comments, or generally unhelpful “noise” will be removed.

Be Kind and Courteous

Treat everyone with respect. Healthy debates are natural, but kindness is required. Bullying or rudeness of any kind isn't allowed, and degrading comments about race, religion, culture, sexual orientation, gender, or identity will not be tolerated.

Create Your Account!

With that said, I want you to drop whatever you're doing and create your free account on the forum!

This community only works if YOU get involved, so put this tool to good use and help add value to the community!

When you join, announce yourself in New Member Introductions and tell me you're there (you can tag me at @retipsterseth). I hope to hear from you soon!

The post The REtipster Forum Is Back! appeared first on REtipster.

However, it can get complicated for someone without experience underwriting and administering loans.

The devil is in the details. Each seller financed deal has a lot of information to keep track of, and I've seen A LOT of folks stumble along the way.

This is why I created the Seller Financing Masterclass—to help you master seller financing and make it work for you.

What Is the Seller Financing Masterclass?

This course is a living, breathing resource that will explain all the essential concepts you need to understand when buying or selling real estate with owner financing.

I made this course because I recognized the need for a complete, comprehensive education that was easy to understand and didn't leave any giant information gaps throughout the material.

What You'll Learn in the Masterclass

The course is divided into six modules, with more lessons and bonuses on the way. Here's a peek at what you'll find if you enroll:

Module 1: Seller Financing 101

We start with the basics, defining key terms and concepts so everyone's on the same page.

In the first module, I explain the foundations of seller financing, explore its benefits and potential drawbacks, and help you decide if it's the right tool for your situation.

We’ll touch on the key terms you need to know because if you don't understand the language of seller financing, the concepts will feel more confusing than they need to be.

Module 2: Underwriting and Loan Origination

This is where things get exciting.

In module two, we'll thoroughly review the underwriting and loan origination process, learning to assess borrowers and ensure they're a good fit for your seller-financed deals. We'll cover the importance of underwriting, how to evaluate potential buyers and the different types of loan documents you'll need.

Underwriting is a tricky beast, so I've brought in two heavy hitters: Max Bailey from CalltheUnderwriter.com and Eric Scharaga, author of Lienlord and Founder of Damen Capital Management. Our two experts offer the best advice on qualifying buyers, mitigating risk, and ultimately making the deal work for you.

Module 3: Closing the Deal

Closing seller-financed deals is much more convoluted than closing a simple cash transaction, so I designed this module to cover everything there is to know about closing the deal.

I'll walk you through the entire process and each document, explaining what it is, why you need it, and what to look for. I don't explain these details so that you can close your deals; I explain them so you can understand what your title company or attorney is doing when they close the deal.

We'll cover the importance of having a good title company, how to handle escrow, and what to expect at the closing table. We'll also discuss state-specific regulations and the importance of using the correct documents to protect yourself.

Module 4: Collections and Foreclosures

Once the deals are closed, it's time to manage them effectively.

In module four, we'll cover the often-overlooked aspects of collections and loan servicing. We'll also discuss various methods for a “set-and-forget” payment collection system to ensure a smooth and predictable income stream.

And yes, we’ll also tackle the sometimes unpleasant topic of foreclosures. This is where things can get messy if they aren't documented correctly from the beginning. It's also essential to have systems to handle delinquent payments and what you can do as a last resort to get your property back.

Module 5: Buying With Seller Financing

Many land investors only think of owner financing as a way to sell their properties, but there is also a whole other world of using seller financing to buy properties as well.

In this module, we'll explore strategies for buying properties with owner financing, opening up new possibilities for acquiring deals you might not have considered before. We'll also discuss the negotiation process with sellers and how you can present a compelling offer to benefit both parties.

Module 6: The Note Business

Did you know you can sell off your seller financed notes to other investors?

This module offers a deep dive into this exit strategy for seller financing. Whether you're selling off your notes or buying existing ones from other real estate investors, understanding this aspect can open a lot of new doors in your business.

We'll cover the different types of notes, how to value them, and how to sell them. We'll also explore the world of paper assets, including how to create and sell notes.

Even if you sell a property with owner financing and you have no intent to sell off your note, it's still important to know how to originate your loans the right way, so they're worth the highest possible value. This will help you make more money if you ever decide to sell them, and if even if not, this will help you create a much higher quality note portfolio you can depend on!

Bonus Resources and Support

On top of the core modules, you'll get access to a treasure trove of bonus resources:

• Mortgage Calculator: One of the most powerful tools in the course is the REtipster loan calculator. Use this tool to help calculate the numbers on any deal. Just plug in the numbers, and it'll give you a breakdown of the cash flow, ROI, and more.
• REtipster Podcast Episodes: Dive deeper into seller financing and notes with hand-picked interviews from the REtipster Podcast, where we've talked with industry experts who can share loads of insights about seller financing and the note business.
• Creative Financing Forum: Connect with other investors, ask questions, and learn from their experiences in the creative financing category of the REtipster Forum.
• Downloads and Assets: Access valuable checklists, calculators, and other resources to support your journey.

Take the Next Step

Many investors jump into seller financing without fully understanding its complexities. This leads to costly mistakes and missed opportunities.

You can avoid all of that with the Seller Financing Masterclass while taking your land business to the next level.

Here's what you can expect:

• Learn from the best. I've interviewed leading experts to bring you their insights and proven strategies.
• Avoid costly mistakes. Understand the common pitfalls and how to navigate them effectively.
• Get the right tools and resources. Access valuable calculators, checklists, and a supportive community.
• Become a confident seller financing pro. Master the art of structuring deals, managing your portfolio, and navigating the note business.

By the end of this course, you'll have a comprehensive understanding of seller financing and the tools you need to succeed. You can confidently identify and negotiate deals, structure financing arrangements, and manage your portfolio.

If you're ready to take your real estate investing business to the next level, you can enroll at SellerFinancingMasterclass.com.

Remember, mastering seller financing can transform your real estate investing game. Instead of flailing through seller financing blindly, why not set yourself up for success? Get a headstart today. I'll see you in the course!

The post Seller Financing Masterclass Review appeared first on REtipster.

Get Started With Fundrise

In 2017, I made a video and blog post explaining how Fundrise works.

As part of this review, I decided to invest $1,000 of my own money with the company so people could see exactly how it worked, and we could check in on that investment each year to see the results.

Since then, I’ve been tracking the progress and returns from that investment by putting together annual video updates showing the dividends and how much the money has grown.

My goal with these annual reviews isn’t to convince anyone to invest with Fundrise. My goal is to inform you of this investment strategy and the unique fact that you don’t need to be an accredited investor to participate.

What Is Fundrise?

Fundrise is a real estate investing platform that allows investors to invest smaller amounts of money into not a single property, but into “pools” of real estate.

It makes real estate investing accessible to a broader audience by allowing investors to contribute smaller amounts than traditional real estate investments.

People invest with Fundrise mainly for convenience, lower entry costs, and the potential to earn passive income through real estate. Real estate is often considered a stable investment compared to more volatile markets like stocks.

The First Year With Zero Principal Left

After withdrawing my original $1,000 principal investment in 2022, this is the second year I've seen how the remaining re-invested dividends continue to grow (or shrink) on their own.

Of course, my investment performance doesn’t determine YOUR returns if you decide to invest with Fundrise. Every eREIT performs differently, and the performance will vary each year.

Even so, this review will offer insights into how Fundrise performs as a company, specifically compared to other investment options like the stock market, mutual funds, or similar websites.

It's a lot of fun to see the actual returns on this investment and not just a theoretical picture of what's supposed to happen.

Fundrise Performance Update for 2024

When I first invested my $1,000 six years ago, I told Fundrise to automatically reinvest all of my dividends (rather than sending them to my bank account). This is a big part of why $752.78 of “value” is left in the account. This number would be substantially lower if I didn't reinvest these dividends.

Get Started With Fundrise

As of April 22, 2024, the leftover funds after withdrawing my original $1,000 investment (with all dividends automatically reinvested) haven't done particularly well.

Runaway inflation, followed by continued higher interest rates, has taken its toll on the U.S. real estate market, and it shows in its performance over the past year. This is the second year I've ever seen any of these numbers go backward, and I wouldn't be surprised if this trend continues in the short term.

2021 was the best year at 20.4%, and 2023 was the worst at (12.6%). So far, 2024 seems to be on a slightly better track. I doubt it will be a stellar year, but we won't know until the year ends.

The screenshots above were taken on April 22, 2024 (a few days after I recorded the video above). April 22 isn't even a full four months into the 12-month calendar, which is part of why the 2024 year-to-date earnings look disproportionately smaller compared to the previous years.

Is 71.3% a decent return over the past seven years?

Considering I spent no time or energy stressing over property managers, tenants, contractors, lenders, or anything else, I can't say I'm disappointed.

I certainly could have made much more money over this time if I had put this money into my land investing business, for instance, but the advantage of something like Fundrise is that it's passive.

The more lucrative real estate investments typically require much more thought, effort, and risk, whereas something like Fundrise. At the same time, it has its share of risk, too (as we saw in 2023 alone), and requires absolutely no time or energy from me, which is a nice advantage.

Fundrise's appeal isn't in the high returns. The appeal is the passive nature of this investment and the fact that it requires nothing besides the initial dollars I put into it.

RELATED: What Is “Passive Income” Exactly?

The Biggest Drawbacks to Fundrise

As many people have mentioned in the YouTube comments over the years (and I would have to agree), the biggest drawback to investing with Fundrise is the fact that I can't quickly or easily cash in my shares before the five-year holding period unless I want to pay the penalty for redeeming the shares early.

This five-year penalty also applies every time I automatically reinvest my quarterly dividends. For example, if I reinvest a dividend in year three, I have to wait five years from the date of that investment before I can redeem those shares. So, it creates this constant five-year waiting period every time new dollars go into their system.

When you compare this lack of liquidity with the stock market, Fundrise looks less appealing.

On the same coin, there is something to be said for diversifying your investments into the real estate sector instead of staying strictly with the stock market, as most “normal” investors do. Even if the returns aren't substantially higher, there is value in simply having your dollars spread out among different asset classes.

Should You Invest With Fundrise?

I'm not here to give you investment advice; I'm here to share my Fundrise investment story so you can understand the real-world consequences (for better or worse) of investing in these kinds of eREITs.

If you're wondering whether this is a good time to start with Fundrise, I think there is something to be said for entering something like this during a down cycle, which we seem to be in the middle of and possibly coming out of. Again, it's difficult to say for sure at the time of this writing).

Fundrise seems well aware of where things are at and where they seem to be going. You can find this in their Newsfeed, where they regularly post their findings, research, and explain how things are going.

It's important to remember that while Fundrise offers an accessible and comparatively low-effort way to dip into real estate investing, it's not without its risks and limitations, particularly in liquidity and fluctuating returns.

Get Started With Fundrise

Whether you invest with Fundrise or not, make sure it aligns with your financial goals and risk tolerance.

Stay curious, stay informed, and, as always, invest wisely.

The post Fundrise Review 2024: What Happened to My $1,000 Investment After 7 Years? appeared first on REtipster.

They're nothing new, but people and companies are becoming more creative with where and how to use them.

Now that QR codes are more commonly used than ever and the average person knows how to scan them with their phone, with a little creativity and planning, there's a new world of opportunities to engage with our potential clients and customers!

QR Codes: What Are They Good For?

QR codes (a.k.a., quick response codes) are incredibly versatile and can trigger all kinds of actions from a person's mobile device. For example, if you've ever interacted with a QR code, you probably know its most common use is to send people to a website.

It may not be obvious at first, but this is actually a big deal!

Think about it—you can send someone anywhere. Why limit yourself to your website's homepage? You can use it instead to communicate with your ideal customer in creative, unconventional, and interesting ways.

Here are some ideas I was able to think of:

• Send them a short video of yourself, telling them about what you do and how you can help them.
• Create a new page on your website designed to greet a person and explain certain details they need to know.
• Create a pre-written text to prompt potential customers to reach out to you and start a new conversation.
• Send them an email opt-in form with more details about what you can do for them (perfect for building an email list).
• Send them a form explaining how you can help and what information you need, then, collect that information from them (this is what I do on my buying website).

Wherever you send someone with your QR code, keep their journey in mind and acknowledge how they got there.

For example, if you created a QR code and placed it on your business card, your landing page could say,

“It was nice to meet you!”

If you created a unique QR code and placed it on your mail piece, your landing page could say,

“I see you got our postcard!”

If you created a unique QR code and placed it on your PowerPoint slide, your landing page could say,

“Thanks for attending the presentation!”

Don't just send them to a generic page with no personality. Treat them like real people (which they are) and usher them through the next stage of your conversation with them.

Present a QR code well, and it can lead your prospects to your desired outcome.

Common Ways to Use QR Codes

Sending someone to a web address offers a lot of possibilities, but that's only the tip of the iceberg.

There are billions and billions of ways QR codes can be used by realtors, real estate investors, and professionals in many other industries.

Here are some popular ways they're used:

1. Dial a Phone Number

QR codes are also a great way to get prospective clients to call you. Whether you send these callers to a pre-recorded voicemail message or answer the calls live, this can be way easier than manually making people type in your phone number.

2. Send a Pre-Written Text to Your Number

This is a brilliant use of QR codes. If you want your prospects to take the first step toward working with you, it's extremely easy to have them scan your code, populate a pre-written message (one you wrote), and send it to your number. After they scan the code, all they have to do is tap Send!

On the other end of this number, you could have it prompt them to join an email list, have a live conversation with you, or even communicate with a chatbot.

The beautiful thing is that when they send the message first, they're effectively opting in. This means you can talk freely with them and say whatever you want without having to adhere to the strict texting regulations that most carriers have.

3. Send a Pre-Written Email

Like the texting example above, you can also have a QR code trigger your prospects to send a pre-written email to whatever address you want it to!

It's the same idea behind the SMS approach; you're just using email instead of texting as your medium of choice.

You could also apply this to WhatsApp, which can be particularly useful if you communicate with people outside the United States.

4. Linking to Social Media Accounts

QR codes are a great way to send people directly to your online social profiles so they can like, follow, subscribe to, and connect with you on social media.

Unfortunately, QR codes are ugly, but luckily, you can tweak the appearance of your QR codes quite a bit. This goes for the colors you use, the images you incorporate, and even the shapes that make up the design.

Here are four designs I created for free through QRcode-monkey.com.

Pretty cool, huh?

Creative Ways to Use QR Codes

But we've barely begun to scratch the surface. QR codes can be much more than just directing people to a website, email, or a social media account.

Here are other unique ways to use QR codes.

• PDF or ebook downloads
• YouTube videos
• Google Maps locations
• PayPal “Buy Now” Links
• Image files
• Dropbox, Google Drive, or OneDrive links
• Contact details
• Attendance tracking
• App store downloads
• View business locations
• Directions to any location (starting from the user's location)
• Promotions, discounts, raffles, and giveaways
• Issuing receipts
• Calendar invites
• Online storefronts, menus, or product lists
• Geofencing (see the geographic location from where a person scanned your code)

And the list goes on and on and on.

You can even create dynamic QR codes. This means you can edit an existing QR code in the future and change the type and/or the information it contains. If you change your mind about what a particular code will make the user do, go ahead—make it happen!

Where to Place QR Codes

And it gets even better. You can put QR codes on virtually anything.

As long as people can see the QR code through their phone camera, they can go where you want them to go and do what you want them to do.

Here are a few practical and creative places you can place a QR code:

• Postcards
• Letters
• Business cards
• Websites
• PowerPoint presentations
• YouTube videos
• Company logos
• Social media profiles
• Craigslist listings
• T-shirts
• Car magnets
• Stickers
• Napkins
• Billboards
• Temporary tattoos
• Permanent tattoos (if you're really hardcore)
• Trade show booths
• “For Sale By Owner” signs
• Bandit signs
• Within blog posts
• Coffee mugs
• Tickets, passes, and admission bracelets
• Nametags
• Shipping boxes
• Bus stops and subway stations
• Print advertisements
• Product packaging

Heck, try this one on for size:

In an effort to boost tourism the Xinhua village in China built a giant QR code from 130,000 trees so it can be scanned by passing planes.
byu/ADarkcid ininterestingasfuck

Too big? How about a QR code that's 2% of an inch, which is nigh-invisible, and can be used to deter forgeries and enhance security?

The possibilities are endless.

Placing QR Codes Correctly (and in a Practical Way)

For many years, most people didn't understand QR codes or what to do with them. You might even remember that camera phones back then didn't support it natively, so you had to download a separate QR code scanner app to scan one.

Fortunately, we're leaps and bounds away from those dark, unenlightened times. These days, you can simply open your camera app, point it at the QR code, and voila!

Even so, if you want to ensure everyone understands how to use your QR code, it doesn't hurt to hold their hand a little. QR codes obviously don't make sense to human eyes, so we don't know what's really behind them (or where they're leading us).

For example, suppose you see this on the side of a bus one day, with no context or explanation:

Would you stop what you're doing, reach for your phone, and try to scan this thing?

I wouldn't.

If I have no idea what it's about, what it will do, and no compelling reason to engage with it, why would I exert any effort to scan this thing? Worse, it could be a phishing link out to scam me of my personal or financial information. No way.

Even if people understand how to use a QR code, they need a compelling reason to take out their phone and scan it. They also need to trust the source to some degree—again, that the QR is safe, and you're not out to get them.

One subtle way to encourage people to use your QR code is to give them some instructions. Even just including the words “SCAN ME” somewhere with the image is better than nothing.

Here are a few examples:

Note: Most of the QR codes in this blog post were created for FREE with QRCode Monkey.

Be Smart About QR Codes

QR codes are brilliant little pieces of technology, but they're only as brilliant as you are.

Think carefully about how you're going to use them. Remember, people are going to scan your QR code on their phone, which means you need to keep a few key things in mind:

• If you're sending people to a website, it must be mobile-friendly.
• You should only display the QR code where people will have an adequate wifi or phone signal.
• You should only show QR codes that can be easily and safely scanned. For example, it isn't a good idea to put these on a billboard next to a highway since people won't be able to scan them safely while driving.
• Ensure the QR code image is large and clear enough that any modern phone with a camera can scan it.

Most QR codes are pretty ugly, to begin with, so it's also smart to consider where and how you will incorporate them into the overall aesthetic of the object or image and whether they will stand out or blend in with its surroundings.

How to Generate QR Codes for Free

Do a quick Google search, and you'll find many free sites that will help you create your QR codes for free. I tested a few out, and they all seemed to work pretty well. Here are a few I've had a good experience with:

QRcode-monkey.com – This is my favorite one. It's easy to use and you can easily customize your QR code. No account is required.

QR-code-generator.com – Another solid QR code generator that offers many different options and variations on what the code looks like and what it does, although a free account is required to use the site. It also has some impressive QR code tracking functionality built into it.

BeaconStac – Another great resource for creating QR codes in seconds. Use them to send people to a website URL, call a phone number, send an SMS message, send an email, save a VCard, and more.

Have you used QR codes for anything in your business? What did you use it for? Where did you place the code? Did you get any worthwhile results from it? Let us know in the forum!

The post The Hidden Link: Mastering QR Codes for Real Estate Success appeared first on REtipster.

“What a brilliant business idea. I bet those things make a ton of money!”

Years later, when I grew up and got my first job in commercial banking, I was fortunate enough to look behind the scenes and analyze some of these businesses to learn how they operate.

After seeing the cost of building a facility and how much income they could generate each month, it was exciting to see that many of my assumptions about this business were true!

Self-storage facility owners always seemed to do pretty well for themselves, and I wanted in on the action!

Unfortunately, I didn't have enough money to buy or build a self-storage facility back then, but I had seen hard evidence that this business was legit, and the seed of curiosity grew in my mind.

Learning the Self-Storage Business

Around 2018, I started looking into the self-storage opportunity more seriously.

After running a land investing business and building an online community for several years, I had saved enough cash to give this kind of business a real shot.

I got familiar with a few different educators in this space, and I put together a mastermind group with a few other self-storage owners I knew, where I learned how to realistically get into the business.

I learned about the many facets of finding and managing a self-storage facility.

• How to evaluate a market for supply and demand and the due diligence needed before buying one.
• The different types of self-storage facilities (drive-up ‘cold storage' units, climate-controlled, outdoor RV and boat storage, A, B, C-Class facilities, warehouse/office flex space, etc.).
• The complexities of managing a facility (hint: it's much easier than managing residential rentals, with enough challenges to keep things interesting).

I decided to send out a direct mail campaign to all the self-storage owners within a one-hour driving radius of my house, and after trying to contact over one hundred of them, I got a total of five responses.

Two of them were investors who didn't want to sell their property. They just wanted to know if I found any deals I could pass along to them.

The other three were willing to sell but wanted 2X higher than their facilities were worth.

Ground-Up Construction of a Self-Storage Facility

After many conversations with other investors and educators in the self-storage space, I heard that buying an existing facility is a better move than trying to build a new one from scratch, especially for a beginner.

Now that I've built one myself, I completely agree.

Why? There are a few reasons.

1. New construction is expensive. When you're building something from nothing, there are a lot of moving pieces that can affect the total development cost. This makes it harder to predict your total upfront investment in the project. Even when your construction budget is established, the numbers can change as the facility is built over the next 6-12 months! In the worst-case scenario, if you don't hire the right people, it's not unheard of for contractors to disappear or run off with your cash.
2. New construction is slow. Many obstacles can slow down or completely stop your progress as you try to build a facility. If you can't finish in time, you'll lose a lot of revenue, especially if you open in the middle of the winter, when demand for self-storage slows down.
3. You'll start with an empty facility. When you build a new facility from nothing, you'll have to start operating with a very expensive building that produces zero cash flow on day one (as opposed to an existing facility that probably has some cash flow when you buy it). This means you'd better be very confident about the need for a new facility in the area. Even when you've done your homework and properly determined there's enough demand for a new facility, it typically takes 18 – 24 months for an empty facility to fill up to break even and even longer to turn a profit. That's a long time to lose money on a property (and you'll lose the most money at the very beginning of that timeframe when you're most vulnerable). As such, you must be in a solid financial position to cover your losses until the facility fills up.

I understood all this and completely agreed with the rationale of buying an existing facility, but it didn't change the fact that I couldn't find any good deals on existing facilities in my area.

It was a terrible time to be a self-storage buyer. Prices were high and going even higher, and storage facility owners didn't have much motivation to sell at a low enough price that would make sense to me.

Luckily, I stumbled across a local opportunity that would change everything.

Spotting the Opportunity (March 2021)

On a random afternoon in March of 2021, I was checking out land listings on LandSearch when I came across a 6.7-acre vacant residential lot not far from where I lived.

It was listed at $69,000 and located on a fairly busy intersection, just across the street from two gas stations.

This property was zoned residential, and all the other parcels were residential, too.

However, it was right on the edge of a commercial and residential district, which made it an ideal candidate for rezoning.

As a residential lot, even if I couldn't get it rezoned, $69,000 was a pretty decent price for a property of this size. I knew that if I could rezone it to commercial, it would be worth even more… but even if I couldn't, it wouldn't be difficult to subdivide it into 3 smaller parcels and sell it at a smaller profit, so I had a solid Plan B if Plan A didn't pan out.

Rezoning land was something I had always known about, but I had never done it before.

I'd always heard it could be a risky, slow, and frustrating process, so whenever the opportunity came up on past deals, I would quickly dismiss it with the assumption that it would be too hard.

However, as I started looking at this property through the lens of a self-storage developer, the idea of rezoning started to make sense.

After talking to the listing agent, he suggested I call the township office to get their opinions about rezoning this property, if it made sense to them, and what the process would entail.

After calling the township clerk, he offered no guarantees, but he also acknowledged that this property probably stood a good chance of getting rezoning approval if I pursued it (in other words, I wasn't crazy for thinking there was potential here).

My next calls were to a couple of civil engineers in the area to get their opinion on this property. I wanted to know if they thought rezoning made sense and what would be involved in developing this raw land into a fully functioning self-storage facility.

They echoed what the township clerk had said about there being “no guarantees,” but they both said the property had plenty of attributes that would make sense for commercial rezoning.

Taking the Risk (April 2021)

In my conversations with the local township about rezoning, they explained that the current property owner must appear before the planning and zoning committee to make their case.

One way to handle this situation would have been to sign an Option Agreement, giving me the right but not the obligation to buy this property for $69,000 from the owner if and when I could get the rezoning approved. This way, if the rezoning request wasn't approved, I wouldn't be stuck with a property I couldn't use for my intended purpose.

Another strategy would be to sign a purchase agreement with a long closing deadline (6-12 months out). The purchase agreement would also include the condition that I could walk away from the deal if I could not approve the rezoning. Again, this would have allowed me to leave the deal if I couldn't get the zoning straightened out.

However, the least complicated (but highest-risk) path was to buy the property outright and try to get it rezoned myself after I was the owner.

Normally, I'm not the type to take the highest-risk approach, but in this case, I knew I was buying a property that was easily worth its asking price. I also knew that if I failed to get it rezoned, I had a Plan B exit strategy.

So, on April 1, 2021, I paid $69,000 cash and bought the property free and clear. The annual property tax bill was $342.93, which wasn't too much of a financial burden as I was getting the zoning figured out. 🙂

The Rezoning Process (May – July 2021)

Immediately after closing, I applied for a zoning change with the township office.

The rezoning application was surprisingly simple. It three pages and it cost me $600 to get the wheels in motion.

After I submitted the paperwork and paid the initial fee, the township notified all the neighboring property owners within 300 feet of my property to notify them of my rezoning request. They were all invited to show up in person at the township on the date of my public hearing so they could protest the change if they wanted to.

In my conversations with other developers who had been through this rezoning process, I was told repeatedly that objections from the neighbors could present some HUGE problems in getting a zoning change approved.

A neighbor's objection doesn't necessarily mean it won't happen, but it only takes one neighbor to show up and throw a fit, and the whole process can get derailed and delayed.

One interesting insight came from one of my conversations with a local engineer. He told me that when neighbors object to a rezoning request, they will go through the five stages of grief.

1. Denial
2. Anger
3. Bargaining
4. Depression
5. Acceptance

In most cases, they will eventually accept the reality of the situation, but not without causing a lot of noise and trouble.

If a neighbor isn't happy about your rezoning plans, the last thing you want is for them to show up at the public hearing and start their denial and anger in front of the zoning committee.

A much better approach is to contact the neighbors ahead of time and tell them what you're hoping to do, why you're trying to do this, and how it will have a positive impact on them and their property. If they have any issues, you want them to start processing those five stages of grief directly with you well in advance of the public hearing. This way, you can help address their concerns and help them get through each stage long before the zoning board is ready to make their decision.

I thought this was a great idea in theory, but even so, I was a little scared to knock on doors, talk face-to-face with these strangers, and deal with their wrath in person, especially during a pandemic.

As I thought more about how to handle this, I remembered a website called Cards In Motion. It's a Canadian-based company that sells video cards. When the recipient opens their card, they'll see a small device automatically playing a pre-made video.

Given my discomfort with meeting the neighbors face-to-face, I thought video cards would be a GREAT way to say exactly what I wanted to say, exactly how I wanted to say it, in a friendly, pre-made message that delivered good information and requested feedback.

I ordered ten cards from the company (normally, they require a minimum order of 50, but they made an exception for me), which cost me $825.21 (not cheap).

My cards had a 7-inch LCD screen in a white card so I could insert a short written message along with the video.

I'll show you what my video cards looked like below…

Maybe because of my brilliant video-making skills, or maybe I just got lucky, but the video cards worked beautifully!

Of the ten cards I sent out, I only got one response. It was from a lady who lived in the adjoining property north of mine. Here's the full conversation.

As you can see, it was a friendly exchange! If this was going to be the only neighbor response from my video cards, I was thrilled!

Zoning Commission Hearing

On June 15, I had my first meeting with the zoning commission. The purpose of this meeting was for the zoning commission to hear and see my high-level plans and ask any questions about my rezoning request.

Prior to the meeting, I had my civil engineer put together a ‘conceptual site plan' to show what the facility might look like. This plan cost me $825 and it looked like this:

As you'll eventually see, the final designs looked very different from this. The objective of this drawing wasn't to show the final layout, but just a vague idea of what I had in mind for the site.

Luckily, the meeting went smoothly! I explained my plans and why I thought it was good for the area (namely, it would be a low-impact property that wouldn't bring a lot of new traffic to the neighborhood). I also explained why it was good for the township (because it would increase their tax revenue and add a beautiful new facility to a busy corner with an empty lot).

After a few softball questions and answers, the zoning committee gave it their thumbs up!

Further Due Diligence

Even though the zoning commission said “yes” to my request on June 15, the zoning change hadn't been approved yet.

The zoning commission was recommending their approval to the zoning board. The zoning board (which consisted of mostly the same people as the zoning commission) wouldn't meet until the following month, on July 13. So, I had to sit around for a month and wait.

Luckily, once the zoning commission says “yes” to this kind of request, it's highly unlikely the zoning board will overturn this recommendation and say “no” the following month.

Up until June 15, I had been advised by nearly everyone that I should not spend any more money on surveys, soil testing, or other expensive investigations until I knew the property could be rezoned the way I needed it to be (because if you can't use a property for your intended purpose, it makes no sense to spend thousands on more due diligence until the usability is finalized).

I struggled with this because, when you're developing a property like this, you can spend A LOT of money verifying that the property is usable before you start moving dirt.

It's also possible to spend a small fortune on plans, tests, evaluations, and other professional services just to be told “no” by the township or run up against some other show-stopping obstacle in your due diligence process.

Now that the zoning commission had given their recommendation, I had much greater certainty that this zoning change would work, and the next big step would be the site plan review, where the township would review a REAL, final site plan, where we would draw out exactly where the buildings would sit, with 100% accuracy. This next step would be much more involved and cost about $12,000.

For my civil engineer to even begin working on the site plan, she needed a topographic survey (which would cost me $2,500) and a geotechnical investigation (which would cost me $5,890)… but even my civil engineer didn't recommend I pay for these things until I knew the zoning change was approved.

So, after the zoning commission had given me their “thumbs up” on June 15 and I had 90% certainty it would go through, I felt comfortable enough to start paying for these assessments, so I ordered the topo survey and geotechnical investigation, and they were both complete before the zoning board hearing on July 13.

Zoning Board Hearing

On July 13, I showed up and sat in the middle of the board room again, surrounded by most of the same people from the month prior.

After fielding a few easy questions:

• “Will you have to bring much dirt onto the property to fill in the holes?”
• “Are you going to put up a fence around it?”
• “How big will these units be?”

The board officially approved my rezoning request under one condition: since this property was at an intersection with one busy road and one less busy road, I was only allowed to have a single entrance to the facility on the road with the least traffic.

This was no problem, and we went ahead and removed one of the two entrances to the facility.

Site Plan Review (September 2021)

Getting the commercial zoning approved was a BIG first victory. This was a huge piece of uncertainty that had scared off many other investors from buying this property in the first place. Now that this issue was resolved, it was a big relief.

But I couldn't party too hard yet because the work had only just begun.

The next stage was putting together a site plan, which would be significantly more expensive and time-consuming.

It took my civil engineer about a month and a half to prepare the site plan and submit it to the township for review. On September 2, we submitted it, and the site plan review meeting was set to happen on September 21.

When September 21 finally rolled around, our meeting with the township went smoothly. My civil engineer was kind enough to show up at the meeting to help answer any questions that came up from the committee.

Because my engineer did such a good job, there weren't any big issues to hash out, but the committee did have a few questions that I had no idea how to answer (what type of gravel I was planning to use when I was planning to pull soil erosion permits, etc.). They weren't huge issues in and of themselves, but if my engineer hadn't been there to quickly answer them, I wouldn't have had a good response for them.

Big Lesson: It's very helpful to have the civil engineer at the meeting or at least on-call to answer any questions that come up.

Feasibility Study

Normally, the best time to order a feasibility study is BEFORE you dive head-first into a project and start spending piles of cash, assuming it will work out.

I had done my version of a feasibility study before buying the property (and as a former banker, I had some good ideas about what to look at), but it wasn't until this point, on September 8, that I ordered a feasibility study from Stephan Ross at Cutting Edge Self Storage. This study normally costs $7,000, but I got a 10% discount because I was referred to Cutting Edge my consultants at S3 Partners.

This turned out to be a VERY enlightening milestone because it confirmed a lot of my original research (how many competitors were within the area, what their pricing was, the need for new storage space in the area, etc.) and also gave me a lot of new information about what it would cost to build a facility like what I had in mind, and even some other considerations I hadn't thought of yet.

When I received the report on September 25, it was over a hundred pages and FULL of useful information.

I was surprised to see that, according to their projections, the project would break even in less than a year.

I had always heard that new facilities like this could take up to a couple of years to reach this milestone, but as the self-storage market was red hot in mid-2021, the feasibility study confirmed that there was a need for this facility in the area, which was very good information to have and it helped me move forward with confidence.

Project Budget

With the feasibility study complete, we had a lot of information on hand to start preparing a preliminary budget for this new facility.

I had no idea how to estimate these construction costs, so I leaned heavily on the consultants and also my general contractor to figure out approximately what my construction budget would need to be.

Initially, my consultants' budget came in higher than I wanted it to, at around $2,276,405. Considering what my cash flow would be (based on the feasibility study and pro forma), a project this expensive would eat too much into my revenue.

I told them that if the project was going to work, the price had to be lower, so they revisited and started slashing costs anywhere they could (less money spent on landscaping, fencing, electrical service, less expensive doors, and buildings, etc.) and we came up with a revised, “lean” budget number of $1,701,728.

In reality, almost every new construction project exceeds estimates and moves slower than expected, so we knew that the final number would likely fall somewhere between $1,701,728 and $2,276,405. I hoped it would land as close as possible to $2,000,000, so this was the number I took to the bank.

Bank Financing (October 2021)

At the beginning of October, I started looking for a commercial lender.

Since I had worked in the commercial banking world for nine years (from 2007 to 2016), I knew a lot of commercial lenders in my market, but I had never worked with any of them as a borrower.

I knew from the banking world that when you're borrowing money, it's mostly a commodity.

It's not so much a matter of what bank or credit union you borrow from as much as what rate and terms you can get, how easy and fast the process will be, and the quality of your relationship with the banker you're working with. I decided to call up one of my friends in the industry to get the ball rolling.

After a few conversations, we discussed some possible ways to finance this deal.

1. SBA 7(a) Loan: With this type of loan, the bank would finance $1,600,00 (or 20%) of the $2 million project, and I would have to contribute the other $400,000. Of the $1.6 million loan amount, the SBA would give the bank a 75% guarantee (i.e., If I ever defaulted on the loan, SBA would reimburse the bank for 75% of their loan balance). This kind of guarantee requires the bank and borrower to jump through some extra hoops to get SBA approval, but it puts the bank in a much safer position, especially considering my business is essentially a startup with no proven track record.
2. SBA 504 Loan: With this type of loan, the bank extends an “interim loan” of 90% of the project cost. In my case, the bank would finance $1,800,000, and I would contribute $200,000. With a 504 loan, instead of offering a 75% guarantee, SBA would come in and pay off the bank by 40%, bringing their loan balance down to $1,000,000, which leaves the bank at 50% LTV. Meanwhile, I would have two loans to pay off over 20 years, one for $1,000,000 to the bank and another for $800,000 to the SBA. Again, this puts the bank in a much safer position and makes a lot of sense for startup businesses. It also gives the borrower a much lower down payment and a fixed rate on the SBA loan. But, again, it requires the bank and borrower to jump through many extra hoops.
3. Conventional Loan: This is where the bank finances 75% of the total project cost, and I would put down 25%, possibly 30%. I would then have one loan to pay off over the next 20 years, and the interest rate would reset/adjust every 5 – 7 years. The benefit of this loan is it's much faster and simpler, with one approval process. The downside is that I would have to put down a lot more money, and the rate wouldn't be fixed.

The loan(s) would amortize over 20 years with each option, but the interest rate would adjust every 5 – 7 years. With the SBA 504 loan, the interest rate on the 40% / $800,000 loan would be fixed for the entire 20 years (a nice benefit with that loan program), but the bank loan would be adjustable.

When financing something like a new self-storage facility (particularly one owned and operated by someone like myself with no prior experience in self-storage), SBA loans are a popular choice and usually a requirement… because a new business presents some obvious risks for the lender. I was surprised that the bank was willing to give me a conventional option at all.

Waiting for the Bank (October 2021 – February 2022)

Waiting for the bank to approve this loan was the first real, frustrating experience because it took them a long time. I wasn't necessarily in a big hurry to get it done, but by this point in the process, I had gotten several other parties involved with the deal, and I didn't want to keep them waiting.

After hearing it would be approved on December 8, the date was moved to December 22.

December 22 came and went; I was then told it would be approved on January 5, maybe January 12 at the latest.

Fast forward to February 16, and I was still waiting.

Then, FINALLY, it was approved on February 24.

The final product was exactly what I needed, but after being pushed off and feeling ignored for two months, I had a bad taste in my mouth from the experience (and mind you, the bank and I hadn't even started working together yet).

Even though I was annoyed and skeptical about how responsive this bank would be to my needs, I was willing to continue working with them on the project since we had gotten this far.

Finding a New Bank (An Unexpected Discovery)

On February 25 (the day after getting the bank's approval), I got a random phone call from the realtor who had sold me the land in early 2021. He was checking in to see how the project was going.

As we talked for about 20 minutes and I explained where things were with the financing, he mentioned a commercial banker he knew who could do 20-year fixed interest rates with conventional loans.

In the commercial banking world, a 20-year fixed interest rate is almost unheard of. In my decade working in commercial banking, I had never heard of any bank offering this… and I figured he must be mistaken. Nevertheless, he gave me the name and phone number of the banker he knew, and he connected us.

Later that day, I got a call from the banker, who confirmed it was possible! So, on a whim, I decided it wouldn't hurt to get their approval, so I sent this new banker all the same information I had sent to the original bank, and they started getting the deal approved.

Finalizing Construction Plans and Engineering (March-May 2022)

Now that at least one bank would extend financing to me, I felt it was safe to pull the trigger on finalizing our construction plans.

The cost of doing this was about $51K, so I wanted to wait until I knew the bank was on board. Here is the cost breakdown:

• $15,000 for the self-storage consultants
• $21,000 for architectural engineering
• $6,000 for structural engineering
• $4,400 for electrical engineering
• $5,000 for civil engineering

This process took a surprisingly long time, with many gyrations and back-and-forth discussions between all parties involved. These calls were important because each person's actions would impact the other, so each person needed to understand what the other was doing.

In this process, we ended up deciding a lot of important things.

• We moved the driveway's location, which saved us over $200K in excavation costs (this lot was bowl-shaped, and the driveway location had a BIG impact on how much fill material we needed to bring on-site).
• We determined where the automatic gate would be, what kind of gate it would be, what kind of fencing material we would use, and where it would go.
• We decided where the lighting would be placed throughout the facility.
• The civil engineer determined how the lot would slope and drain into the retention pond on the north end of the property.
• The architectural engineer determined the precise layout of the RV/boat storage area and how many spots of each size would fit within the space we had.
• The electrical engineer determined where the transformer would be placed. We also decided to move two of the power poles because of how excavation would impact them and where the parking spaces would be. This process added some unnecessary delays because we, as a team, didn't do a great job of communicating with the power company about where the poles would go.

This was another important step, and I realized several times how important it is to have people on your team who know how to think critically and spot opportunities for improvement.

The Final Site Plan

Everything from the driveway's placement to each parking spot's location presented some challenges around how much storage space we would have, and not everyone on the team was great at thinking through the best ways to lay things out.

There were several moments when I realized I needed to pay close attention and catch things myself. Even though every other person on the team was getting paid a lot of money to be the ‘expert,' I couldn't count on them to see every issue and handle everything perfectly.

This was the second time during this journey that I started feeling frustrated. The process felt bloated, with poor communication from several sides. Even though we were having large group calls every week, it felt cumbersome to have all these meetings via Zoom rather than meeting once or twice in person at the site.

Certain team members wouldn't follow instructions, would miss deadlines, and easy things that could've been caught and fixed early on didn't get caught or addressed until weeks (and, in some cases, months) later than they should have been.

Even more frustrating was that I didn't know who to hold accountable. Was it my job to see all the issues and catch them? Or my consultants? Or my general contractor? Or should each individual on the team supposed to catch each other?

Even today, I still don't know who was responsible for which problems.

Big Lesson: If I could do it all over again, I would start by finding a great General Contractor and then let THEM decide which civil, structural, architectural, and electrical engineers to use. They likely already have these team members established, and cohesion will happen more naturally. This way, if there are hiccups or delays, I can look to one person (the General Contractor) and hold them accountable. Since I was bringing several disconnected parties together, it was difficult to make personalities mesh and ensure proper communication.

Appraisal Issues & Delays (April 2022)

Around the time my team was making progress toward the site plan, in early May 2022, I encountered one of my first big “problems” in this process.

After my new bank had approved my loan, there were two big boxes that needed to be checked before I could get the money and start spending it.

1. General Contractor's Preliminary Sworn Statement (more on that below).
2. As-Complete Appraisal.

With an As-Complete appraisal, a commercial appraiser needs to look at the construction plans and budget and use their best guess to determine what they think the property will be worth once construction is complete.

The appraiser also formulates an As-Stabilized value, which is different than the As-Complete value.

As-Compete is what they think the property will be worth on the day of completion. In other words, they only look at the value of the land and structures as though they are empty and not generating any revenue (using only the cost approach).

As-Stabilized is what the property will be worth when the units are full and the facility is fully operational (using the income approach).

The As-Stabilized value came out to $2,075,000, and the As-Complete value came out to $1,830,000.

Unfortunately, the bank could only use the lower As-Complete value as their total project cost, meaning they could only lend 80% of this number, not the higher $2,200,000 estimate we originally planned for.

Unfortunately, the appraiser was using incomplete numbers for his valuation.

To finish the appraisal in time to close and fixed on my original quoted rate of 4.83%, this appraisal needed to be finished, and we needed to close no later than June 8. This was 90 days from the date when I was originally quoted this rate in the bank's commitment letter… if we didn't close by then, the rates would reset to much higher numbers since rates had already risen substantially since March 8, 2022 (this was just before the war in Ukraine started and the Fed started raising rates).

We didn't have time to wait for my engineering team to finish the job so my contractor could finish his sworn statement. We needed to get this appraisal done now! So, the appraiser said he could accept a construction budget from my contractor on his letterhead, so that's what we did.

The problem was my contractor didn't have all the information when he put this together, and even though the new, higher costs came in after the fact… the appraiser wasn't able to see this. He had to work with older, incomplete information, which is why the appraised value came out so much lower.

As a result of this lower appraised value, I would have to come up with an additional $160K(ish) out of pocket if we wanted to proceed.

Luckily, I had the cash, so this unfortunate appraisal issue wasn't a deal-killer for the project just yet.

Loan Closing Day (May 2022)

On May 26, 2022, I met with my banker, and we signed closing documents.

Since we were still waiting for the plans to be finalized and for the township and road commission to issue their approvals, I still wasn't 100% certain this project was ready to proceed as of this date, but if I wanted to lock in for eight years at 4.83%, I didn't have much more time to wait.

Because things still weren't 100% ready to go, I made sure to check with my banker to see,

“What happens if I sign these documents and then decide we aren't going to do this project? Will there be some kind of penalty if I don't move forward and don't end up borrowing?”

My banker confirmed that there would not be a penalty if we canceled the project, so with that assurance, there wasn't any drawback to proceeding with the closing. They wouldn't even advance any money until my contractor issued his preliminary sworn statement, which still hadn't happened at this point.

Preliminary Sworn Statement and More Delays (June – July 2022)

As mentioned above, one of the last big hoops we had to jump through before I could start using the loan proceeds was from my general contractor. He needed to put together a preliminary sworn statement, which is a detailed, precisely measured outline of the construction costs, with his signature on it (so, he can't just make these numbers up; he needs to be very confident about what he's quoting).

These aren't just guesses about how much construction will cost (which is what we did at the very beginning of the project). These numbers are formulated by reviewing the FINAL construction drawings and getting hard quotes from each subcontractor.

This is important because the bank needs to know that we aren't just guessing how much money will be needed. We have a high level of certainty about what everything will cost (the “measure twice, cut once” approach).

Unfortunately, my contractor couldn't do this until everything was complete from the planning end (all the engineers finished everything, and the township and county road commission had approved everything).

One of the many speedbumps in the planning stage was two of this property's three existing power poles. One was in the way of a drive lane for the facility's boat and RV parking area. The excavation would impact the other one (we would be shaving about 10 feet of soil from around it, so it needed to be reset or moved entirely.

It would cost $12,000 for the local utility company to move these, and it required their design and approval, adding another layer of complications, costs, and delays to the planning and design process.

Step 1: Tree Removal (August 2022)

In late August, things finally started moving. Our first step was to remove all the trees from the lot.

Ideally, I would've loved for a sawmill to harvest most of these trees, but this property wasn't big enough, and the trees weren't valuable or mature enough to extract much value, so I couldn't make any money back by harvesting the timber.

I called a couple of local sawmills to see if they wanted to take any of this timber for FREE. One of them visited the property in late 2021 and told me that with mostly red pines and small oaks, there wasn't enough usable timber to justify the cost of time and fuel to send a crew out.

So, we went with a “cut and burn” approach instead.

The process took about three weeks from start to finish.

Luckily, I had great communication with the neighbors to the north. They didn't want to lose all the trees, but they understood what we had to do and kept a good dialogue about their concerns, and I did everything I could to give them what they asked for.

We left 10 feet of trees on the north end of the property, and I agreed to install a privacy fence between our lots so they wouldn't ever see headlights from our facility shining at their house.

Step 2: Excavation (September 2022)

Excavation on this property was a huge job because the raw land had quite a steep slope along the southwest corner, which required 15,000 cubic yards of fill.

Originally, we had the entrance plotted in the center of the southern end of the parcel, but by moving this driveway to the flatter southeastern corner, we could bring in a lot less fill material, which saved us a lot of money.

Overall, the basin-shaped topography still required extensive excavation and land shaping. Fortunately, the sandy soil was ideal for drainage.

Work started in September and continued for two months to carve out a retention pond and achieve proper grading.

An old phone line in the utility easement that couldn't be removed was an eyesore. The tree growing around it had to be partially cut, leaving the wire intact. AT&T charged $9,000 to remove their inactive landline. Contingencies covered unknowns like this.

Two power poles were scheduled to be moved from obstructing future drive lanes and excavation areas. The utility company wouldn't relocate them until the buildings were up, so excavators worked around them for the time being.

Rather than trucking all soil away, we built a berm on the north border as a visual barrier buffer where neighbors had requested one. This also helped us dispose of some excess soil without trucking it away.

Step 3: Foundations (November 2022)

Watching the foundations get poured for this self-storage facility was a surprisingly interesting step because I had never actually seen it done before, and I never realized what a group effort it was and how seemingly small design changes can have such a big impact on the price and time it takes to get the job done.

Forms were constructed for 27,600 sq ft of 5” thick concrete slabs with 12-inch footings. This was done over two days for the four buildings, and there were challenges with material shortages and unpredictable Michigan weather.

The concrete incorporated steel grids for strength that had to be positioned correctly. Laser guides ensured proper grading and drainage. An extra foundation perimeter was later added to secure steel bollards that protect building corners.

The process required coordination between the 26 trucks and dozens of on-site workers. It demonstrated how many people it takes to construct something precise and durable like this.

The slight slope of the site enabled a consistent 1% grade on the slabs, saving on steps between foundations. Out-of-state engineers initially proposed a 4’ deep insulated stem wall foundation. However, my general contractor recognized that the unheated buildings didn’t need that, so they switched to 12” monolithic slabs without insulation, saving us about $300k.

Overall, I learned the importance of getting local professional opinions when construction norms differ by region. This can help identify a lot of potential mistakes with overspending on things that just aren't necessary.

Step 4: Building Storage Units (November – December 2022)

The building construction was the most exciting stage because we finally saw these storage units take shape.

The steel was delivered as the foundations were still drying. Multiple crews worked simultaneously, making for a crowded construction site. It took 2.5 weeks to build each building, which took over a month and a half to do everything.

We worked with Storage Structures, Inc. to manufacture and install these buildings for us. One random issue was when the buildings were inadvertently constructed backward by 180 degrees due to a miscommunication between Storage Structures and our architect. I'm still not 100% sure who dropped the ball, but it didn't end up being a huge problem.

We resolved the issue by moving the interior walls on two buildings so that the units with deeper space ended up on the outside, where there was more room to back up vehicles when needed.

The metal roofs were relatively flat to handle heavy snow and save costs. Originally, these buildings were designed with gutters, but I had them removed to eliminate unnecessary maintenance. The only real downside to this is that when it rains, you'll get drips falling on you when walking in and out of each unit.

Gaps between walls and ceilings were concerning. Similar climate-controlled buildings need these for airflow, but they serve no purpose here. Filling them in later would cost $12-15k. For now, they were left as-is to avoid further costs.

We were also required to build firewalls between certain segments of each building. These were costly but important for containing potential fires from unknown stored contents.

Step 5: Doors (February 2023)

We installed 170 TracRite Model 944 doors. after the building construction was finished. These were roll-up doors with springs to make them easy to open. A local contractor mounted the hardware and hung each door individually.

There were two door sizes for 5 ft wide and 10 ft wide units. The green color matched the facility's brand and logo perfectly, so if we build more units in the future, we'll have to order the same brand, style, and color doors from the same company to ensure they match.

Around 15 of the 170 doors had issues with the latch and side rail holes lining up, making the doors very difficult to close completely. This was worse in cold weather when the seals were brand new and harder to push down. Some improvement happened as the seals softened.

I was able to fix the issue with the right tool to increase the size of the holes cleanly. Sometimes, the holes were too big, leaving a gap at the bottom. Luckily, TracRite makes a part to adjust the lock hole position if needed.

The door experience is very important for tenants accessing their units, so resolving these issues was important, and it took a bit of extra work, as I explained in this video.

For future projects, I would use TracRite doors again because they make a great product. However, I would probably use a different door installer in my local market.

Step 6: Signage, Security Cameras & Utility Poles (Spring 2023)

In the final stages of developing this new self-storage facility, there were many challenges we had to sort out. Some of them were expected, and some of them were not.

We chose to move two power poles on the property, which was a challenging and costly endeavor. We had to pay almost $23,000 to do this, then handle residual wires from other companies.

This process took five months, and in hindsight, we probably should have just left these poles in place and designed the facility to work around them.

We also installed a security camera system with 21 4K cameras.

The initial quote I got was approximately $10,500, but when all was said and done, it cost a little over $14K. The cameras connect wirelessly to an on-site hub where footage is stored and accessed remotely.

We also had to order several different signs for the facility:

• Unit number stickers
• Road signs
• Parking signs
• Building identifier signs

We used a local company called Extreme Graffix, and they did a great job installing custom signs at a reasonable price, much less expensive than quotes from other companies near us.

We could have gotten fancy illuminated signs, but we determined they weren't necessary for a storage facility like this.

Step 7: Asphalt, Parking Lot, Fence, Gate, Erosion, Software, Opening (Summer 2023)

In the final stage of developing this self-storage facility, there were a lot of finishing touches to take care of. Namely, the asphalt, erosion management, parking lot, fence, gate, and all the other odds and ends that went along with those things.

We decided to pave 1.5 inches of asphalt around the buildings, which is a bit thinner than usual. Normally, most road applications will require 3 inches of asphalt, but this would be a low-traffic application, and we could save a lot of money by only putting down a base layer like this.

I got the idea from another storage facility owner in my area who did the same thing, and this amount of asphalt has lasted him over 15 years, so I had some reasonable assurance this would be sufficient. This asphalt costs an extra $55,000, but I think it will be a good long-term investment.

We left a gravel area for our Boat and RV parking lot, where we hope to do a future expansion once this facility has stabilized. In this area, marking the outdoor parking spaces on gravel was challenging. We put down oil-based paint and created some homemade parking posts to identify each spot, but we've noticed they tend to blow around and rotate in the wind, so I'm not sure if this will be a good long-term solution.

We had some erosion issues on the steep slopes around the site that had to be fixed with rocks and regrading.

We installed a fence for security, though no fence fully prevents break-ins. It mainly creates a perception of security. Our basic 6-foot steel fence costs over $100,000, and I also hung up some privacy fabric on one section to block the view at our neighbor's request.

We installed a lift-style gate instead of a roll-style to prevent winter weather issues. The gate integrates with software to provide gate codes to tenants upon rental.

We got our temporary certificate of occupancy in the Spring, which enabled us to open one of our four buildings so we could start generating lease revenue as we finished up construction. The timing of this was important because the summer months are much busier than the winter, so we wanted to ‘make hay while the sun shines,' so to speak.

We were able to fill about 40 units during this wrap-up period. When all buildings opened, we didn't need to change much about our marketing because our systems were already in place.

Would I Do It All Again?

Now that I've been through the two-year journey to building my first self-storage facility, would I do it all again?

YES! In fact, with all the incredible lessons I learned from my first experience, it would be a shame if I didn't get a chance to do it all again.

With the benefit of this experience, if I get the chance to do it again, the process would almost certainly go faster, we would have far fewer hiccups (provided I can find and hire a good general contractor and let them steer the ship from the beginning), and I could probably do it for a bit less money than I did on the first go-around.

My first self-storage development was an amazing adventure that I'll never forget.

If you ever decide to build a self-storage development of your own, I hope you were able to learn a thing or two from my experience!

The post From Ground Zero to Self-Storage Hero: The Story of My Two-Year Self-Storage Facility Development appeared first on REtipster.

Or perhaps you've been on the fence about purchasing a piece of land, wishing you could get a comprehensive look at its layout and surroundings before deciding. Wouldn't it be helpful to see what it looks like from the sky?

Enter Droners.io—a game-changer in real estate visuals. This online marketplace is your one-stop shop to find and hire skilled drone pilots who can capture stunning photos and videos of properties across the US.

Whether you're looking to drastically improve your property listings or want an extra set of “eyes in the sky” for your due diligence process, Droners.io can help! Dive in with me as we explore how this platform can be a land investor's best friend! 🚁📸

Why Drone Footage?

In the world of land investing, presentation is everything.

While ground-level photos can capture the essence of a property, drone footage can give your properties a unique and visually stunning perspective that can elevate your listing above the other noise in your market.

Imagine showcasing a vast expanse of land from a bird's-eye view, highlighting its topography, neighboring properties, surrounding area, and other unique features.

Sure, anyone can snap a picture of a dense forest or an open plain, and sometimes this is enough (I've sold hundreds of properties this way). But when we're talking about LAND, a type of property many buyers will pay arbitrarily high prices for based on its presentation, isn't it worth a few hundred extra bucks if your property can sell faster or at a higher price (or both) with the added allure of drone imagery?

How to Get Drone Footage?

Do you need to buy your own drone and drive out to your own properties to get these pictures yourself?

I suppose you could. But in most cases, even if you own a drone, you can save a ton of time and money by hiring a local, commercially licensed drone pilot to get these pictures for you.

You can find skilled drone pilots on numerous platforms. Droners.io is the one I hear of most often, but there are others, like Thumbtack, Bark, and Craigslist, where you can find these professionals as well.

How Much Does It Cost?

The cost of drone footage varies based on the pilot's expertise, location, and specific requirements. Typically, pilots charge between $75 to $150/hr.

When I buy drone footage like this, I plan on spending at least $300 for the job.

There is usually an additional cost if you require additional editing, such as music or subtitles.

Basic packages might start as low as $100 on platforms like Droners, but you'll usually be paying $200 to $300 (even higher) for more involved projects.

What Instructions Should You Provide?

When hiring a drone pilot, clarity is key. Here are some pointers on what you might need to specify:

• Type and duration of footage (video, photos, or both).
• Editing requirements (music, subtitles, etc.).
• Desired quality (4K, 1080p, etc.).
• The exact address or coordinates for airspace restrictions check.
• Preferred timeframe or specific time of day.

For a detailed example of how to provide instructions, you can download an example right here!

When Should You Get Drone Footage?

The best time to get drone footage is after you get a signed contract from the seller but before closing the deal.

This timing allows you to use the footage for due diligence and when you create your property listing to sell.

While your property might look perfect from a satellite map, satellite pictures usually are not up-to-date. You could be looking at pictures from years ago, which tells you little about what the property looks like today.

Likewise, even if you hire a local photographer who takes pictures from the ground, these photos won't always show you what the neighboring properties look like, and that's where drone photography shines.

By ordering drone videos and photos during the due diligence phase, you'll be equipped with all the information you need and ready to market the property immediately after you purchase it!

Tricks of the Trade

Identifying your exact property boundaries in drone footage can be tricky, especially if the property is landlocked or lacks clear boundary lines in the nearby landscape.

To help potential buyers, consider asking your drone pilot to edit your video to include parcel lines or point out landmarks on your subject property.

While some drone photographers offer this as an added service, you can do it yourself using Google Earth and include this as an image or a supplement in your video. I'll explain how this works in this video:

This added touch enhances the viewer's experience and clarifies the property's dimensions and boundaries.

RELATED: 10 Google Earth Hacks Every Real Estate Investor Should Know

Conclusion

While drone photography isn't a strict necessity for every land deal, it's hard to deny this is a valuable visual asset that can significantly enhance your property's appeal to buyers. Not to mention, it can inform you about the property before you buy it!

Whether you're using it for due diligence or to sell your properties faster, the bird's-eye view from a drone offers a unique perspective that ground-level photos just cannot match.

The post Droners Review: Elevating Your Land Listings With Drone Photography appeared first on REtipster.

Once calculated, click “View Amortization Schedule” to see the results!

How Does the Loan Calculator Work?

If you're thinking about taking out a loan or extending a loan to someone else as a lender or seller financier, it's important to understand how to calculate the monthly payments and how long it will take you to repay the loan in full. This loan calculator from REtipster can help you do just that!

How to Use the Loan Calculator

To use the loan calculator, simply enter any three of these four variables:

• Loan Amount: The amount of money being borrowed.
• Interest Rate: The interest rate on the loan.
• Loan Term: The number of months to pay off the loan.
• Monthly Payment: The amount of each installment payment.

Once you have entered any three of these variables, click the button next to the remaining blank field to complete the equation! You can also view an amortization schedule, which shows every payment, along with the interest and principal paid over the life of the loan.

How the Loan Calculator Works

This loan calculator uses a mathematical formula called the amortization schedule to calculate your monthly payments. The amortization schedule takes into account the loan amount, interest rate, and loan term to determine how much of your payment goes towards interest and how much goes towards the principal.

With a normal amortization schedule, each month, a portion of your payment goes towards paying off the interest on the loan, and the remaining portion of your payment goes towards paying down the principal. As you pay the principal down, the interest you owe each month decreases. This is because the interest is calculated based on the remaining loan balance.

How to Use the Loan Calculator to Make Informed Loan Decisions

The loan calculator can be a valuable tool for making informed loan decisions on the fly. By using this loan calculator, you can:

• Compare different loan offers to structure the best deal for both parties.
• Determine how much you can afford to lend or borrow without overextending yourself financially.
• Create a budget to ensure that you can afford your monthly loan payments.
• Track the borrower's progress toward paying off the loan.

This tool is the perfect solution for quickly evaluating different loan scenarios and simply calculating the blank field (whichever one you leave blank). It's the easiest way to ‘solve for x' to see how to complete the loan amortization formula!

The post The Last Loan Calculator You’ll Ever Need! ➕➖✖️➗ appeared first on REtipster.

Sound familiar?

I remember the steps I had to go through when setting up my first business bank account. I had to visit my bank branch in person and fill out a small pile of paperwork, and the online banking system I had access to was archaic, with a mobile app that was clunky and cumbersome to use.

That was years ago before I knew of a better option.

Luckily, I found a new way to get through these steps in minutes without leaving my computer.

But before we get into that, why is it even an issue to begin with?

Why does it even matter that you have a business bank account? Can’t you just pour all your business’s earnings into your own personal bank account?

The Importance of a Separate Business Account

When you start a new business entity, having a separate business account is crucial, where all of your company's income and expenses flow separately from your personal bank account. Failing to do so can leave you open to tax and liability issues.

This is one thing many business owners found the hard way, so it’s NOT a good idea to skip this step.

But the question is—where should you open your business account?

Most people might assume they should keep working with the bank where their personal accounts are held, and this could work if you're already dealing with a good bank… but not all banks are created equal.

I learned the hard way that a good personal bank is not always the best fit for running a business. Many don't even have the best track record for being easy or cost-effective to work with.

What Is Mercury?

For the past few years, I've been hearing about this banking platform called Mercury, which is a digital-first banking platform built for startups.

Mercury's online banking platform simplifies and streamlines your business banking process, allowing you to focus on what truly matters—growing your business. They don’t have any physical branches, but that's the point!

What’s more, whether you're a U.S. citizen or a foreign investor, you can easily set up a business bank account with Mercury without any monthly fees or minimum balance requirements. They’ve made it simple for anyone to open a bank account with an online application process in as little as 10 minutes.

All that, combined with its incredible accessibility, makes it a game-changer for small business owners.

Although Mercury is still relatively new—with over 100,000 customers as of this writing—it has received substantial positive feedback with few complaints from customers who enjoy what it offers.

What Does Mercury Bank Offer?

Like many savings banks, Mercury offers business checking and savings accounts. However, the similarities end here—they don't offer personal accounts, loans, or mortgages.

However, Mercury said it hopes to expand its services to include traditional credit options soon, so that’s a plus.

But one reason for these odd limitations is that Mercury classifies itself as a tech company, not a bank.

Instead, it offers banking services through its partners, Choice Financial Group and Evolve Bank & Trust®. Both of these are U.S.-based FDIC member banks. This allows Mercury to insure accounts for up to $5 million, which is WAY more than the $250,000 of traditional banks.

Also, customers manage their accounts fully online. Don’t expect to drive to your nearest physical branch—Mercury eliminates a lot of overhead by allowing customers to interact with an online-only portal.

To help secure transactions, Mercury employs a host of security measures to safeguard your money, including two-factor authentication, encryption, and transaction monitoring.

Automation is also possible with the online service. For example, do you want to disburse funds to a separate account? You can set up automation rules to execute at scheduled intervals or when you need to. This is particularly useful if you fill up separate accounts (like in Profit First) or earmark funds for a special project or expense.

The nature of Mercury Bank makes it highly suited to businesses that don't deal heavily in cash or frequent check-writing, such as tech startups. But if you’re running a business that dabbles in physical cash flow or regularly collects cash from customers, you might need to look elsewhere; Mercury’s not there yet.

The Drawbacks of Mercury Bank

Sure, Mercury Bank offers convenience to many business owners (or introverts) who just want a bank that works, without having to talk to people. But it also helps to be aware of its limitations.

For example, Mercury has a glaring limit on transaction amounts, especially for new accounts. For example, a brand-new account is limited to $25k to $100k per transaction, depending on the transfer type.

Mercury also doesn’t support checks, nor can you get cashier's checks. If you need to send a check to somebody, you can use your account’s online dashboard and order a check from Mercury’s checking processor. This cumbersome method may take anywhere from a week to 10 days.

Third, you can’t deposit cash into your Mercury account. To deposit funds, you'll need to convert them into electronic funds before they can be deposited into your Mercury account. Similarly, you'll need a debit card to withdraw from Mercury and withdraw cash from an ATM.

Now, this will be a non-issue if you're an online e-commerce company or any business that doesn't need to deal with cash. However, if you run a convenience store, restaurant, retail outlet, or any other type of business that regularly accepts cold, hard cash as payment, then you may want to look elsewhere for your banking needs.

Finally, its all-online nature may not work for those who want real-time in-person support. Should you want one, response times for chat and email tickets can take up to 24 hours, so it’s not a feasible option if you need immediate assistance.

Mercury Wrapped

If you’re a small business owner and you feel pretty comfortable with your existing bank, you don’t have to use Mercury Bank if you don't want to.

But as a bonus, if you click the REtipster affiliate link below and deposit $10,000 within 90 days of opening up your account, Mercury will even give you $200 for free.

If you’re considering that, you can check out the video I made about how to set up a new account.

Get Started With Mercury!

This promo may not be around forever, but it’s a nice little incentive to try it when possible.

Before you go…

Mercury is a solid option, but there are a lot of money management solutions out there. If you're curious about the alternatives worth considering, check out my review on Relay, which offers a similar set of advantages with a few distinct differences.

The post Banking With Mercury: A Hands-On Review for Startups appeared first on REtipster.