Why Not To Launch That Real Estate Startup?

real estate startupWhy shouldn’t entrepreneurs launch new real estate related startups, and is wholesaling properties a much smarter move?

New tech startups seem to be popping every few nano-seconds these days. There is no question that this is an awesome time to start a new business. Capital is pretty easy to come by, Americans are bullish on the future, private individuals are willing to bet on the future, technology has made kicking off a new venture a breeze, and real estate has been booming. However, this doesn’t automatically mean that a new real estate related tech startup is a wise or profitable move right now.

While this has become an increasingly popular trend, it is exactly this popularity which also makes it less profitable for those attempting it now. There are a number of reasons to stop and rethink if this is the best path.

The first and most common issue is that it has already been done. Far too few of those contemplating a tech related real estate startup fail to do any thorough market research. If they did most would find that their ‘revolutionary’ idea has already been done a dozen times.

This is definitely true of most search related startups. Then there are they truly delusional that are thinking of setting up ‘new’ real estate portals for ‘unlisted’ properties. Obviously, once it’s online it isn’t really ‘off-market’ anymore right! Not to mention Zillow has been running a service like this for years.

The second major consideration should be money. While the internet is saturated with get rich quick advice for setting up a website and making a mint tomorrow; that’s a rarity in reality. Most have no idea what it will really cost to build a seriously competitive website and promote it. Just remember you will be competing against startups that have received millions in venture capital funding from the likes of Google, and who aren’t under any pressure to make money fast. So if you don’t have bigger pockets or need to turn a profit sometime soon there may be a better approach.

Now compare the above to simply diving right into wholesaling properties.

Rather than setting up an elaborate and expensive operation which actually takes individuals further away from the money wholesaling properties can often deliver more of what they want, in less time.

Wholesaling properties eliminates the fluff and waiting to deliver fast and significant paydays with much larger returns. It’s at least worth weighing the advantages before you start coding a website that may already be doomed.


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