Outsourced labor in your CRE business is the most effective and efficient resource to scale up quickly. It doesn’t matter if you’re targeting direct real estate investments or passive income securities.
As with any area of your business, dealing with outsourced labor starts with a good plan. I found the most effective way to get started is with these simple steps:
- Identify Your Needs
- Define Success
- Source the Labor
- Manage Effectively
Let’s dig in.
Identify Your Needs
You will need outsourced labor in your CRE business for two reasons primarily – time and expertise.
Expertise is easy to understand. There are some things that you just don’t have the training or knowledge to do by yourself. For example, you may know a good bit about certain contract provisions, but a good attorney will write in such a way to cover blind spots that you may not realize exist.
Time is a little more elusive.
We get so caught up in doing our daily tasks that we fail to realize that our time is better spent in other areas. For example, in business development, low-level research can easily be outsourced to a data miner so that you can focus on reach out and follow-up.
Some other tasks to consider outsourcing:
- Skip tracing
- Initial outreach / prospect qualification
- Entering business cards into the database
- Database maintenance
- Model data entry
- Back-office administration
This is just a sampling. Take a deep dive into your weekly routines to pull out tasks that take a long time and can easily be done by low skilled labor.
Define Success
As you identify tasks to outsource, think about how success will look. This is often overlooked because we just know the job is done when we complete it. It’s much different to define that point for someone else.
I focus on three criteria: quality, time, and cost.
Quality defines the level of detail, accuracy, completeness, and need for revisions, among other factors. In most cases, your definition of the scope of work will have a big impact on the quality of the deliverables. A good description on the front end will pay dividends.
We measure time and cost in both initial delivery and on-going support. Of course, most office tasks trade time for money. Additional resources are usually limited to reports that you can order at a fixed fee.
Source the Labor
Outsourcing labor in your CRE business became 10x easier with the emergence of the contract economy. A Supreme Court ruling that requires minimum wage payment to interns made paid professional outsourcing even more attractive.
Universities and other internship sources are still a viable source for low skilled officer labor. However, an over-reliance on student labor creates inconsistencies by the transient nature of their employment. Therefore, I only go to this source to build a pipeline for future growth for full-time employees.
I like to use online outsourcing platforms, like Fiverr, Freelancer.com, and Upwork, to provide reliable task-level labor.
Longer-term support, like virtual assurance, may come from those same sources. However, I like to get creative and hire these directly thorough job boards and LinkedIn to cut out the intermediary cost and bureaucracy.
Manage Effectively
Of course, the productivity of your outsourced laborer is only as high as your ability to manage effectively. This comes down to defining the task and success metrics and maintaining great two-way communication.
We covered task and success definitions previously. Communication is a little more nuanced. You need to find the workflow that works best for you but consider the following universal best practices.
- Medium: choose the right method for the message. Email is not the only way. Consider screen sharing, conference calls, text messaging, and even snail mail
- Response time: establish hours of operation and speed of response expectations early in the engagement
- Clarity: define the level of information and context you are comfortable sharing before engaging
You will find tremendous benefit in scaling up when you outsource labor in your CRE business. Getting started is the most important and difficult first step. It’s a lot more affordable and simple than you might think. Just get out there and experiment.