Keeping Real Estate Investing Simple
October 31, 2009 by Kenny Santos
Filed under Real Estate Investing
In real estate investment, do you know what the hardest deal to close out is?
The first one!
The challenge is such that most people eventually quit even before ever getting their first deal completed; in fact some would be real estate investors quit even before getting started!
With the glut in available information and the numerous real estate investment options available, getting started is as challenging as getting your very first deal!
Consider some of options that you can choose from if you want to invest in real estate.
Buy and Hold
Commercial space rental
Subject to the existing financing
Fixer Uppers
Flips
Foreclosures or Pre-foreclosures
Lease-Purchase or Lease
No Money Down
Single-family homes, condos, mobile homes or apartment buildings
Confusion arises when you are undecided which of the profitable and popular options as enumerated above you want to engage in.
Unless you are a very liquid and well-financed organization, you can engage in all of them. However, for ordinary investors, engaging in one or two investment options at the most is the preferred method.
If you are lucky enough to make up your mind in which real estate option you want to engage in, the next step is then to systematically search for and close your very first deal.
Again, there are several options open to you on how to close your deal and get to the bank in order to deposit the check of your deal.
The best way to invest in real estate is to find the option you are comfortable with and specialize in it! Learn everything all you can about your particular investment option.
If you have to, take informal courses related to it so that you will become knowledgeable and on the road to becoming a specialist!
Once you have mastered your specialization, take the necessary action in order to get and close your very first deal.
Then and only then, and only if you are serious in making money in real estate can you diversify and learn another real estate investment method.
In learning the ropes of real estate investing, either you choose to undergo a training course or do it on your own.
If you choose to take formal lessons, do not confuse the price of the program with the value of the program.
The cost of a training program is not related to the value it has and the methodologies and techniques you will learn.
About the Author:
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Real Estate Investing - Building Your Team
October 31, 2009 by Kenny Santos
Filed under Real Estate Investing
The story goes that legendary football coach Vince Lombardi once opened a team meeting by saying, "OK men, we’re going all the way back to the fundamentals." Holding up a football he began the day’s lesson, "This is a football."
After a brief pause, one of the players raised his hand. "Coach… you’re moving a little fast for me."
Whether this tale is true or not, it does illustrate an important point. Even the best need to begin with fundamentals, and nothing is more fundamental to your Real Estate Investing business than building a team of competent professionals you can rely on. With that in mind, let’s outline the steps necessary to put together a quality team.
Take A Personal Inventory
First, you need to decide what skills you possess, or more importantly, what skills you don’t possess. For instance, if you are a licensed Realtor or a CPA, you probably don’t need to find a Realtor or accountant to work with you. Likewise, an experienced General Contractor won’t need to find another GC for his or her team.
Begin by taking inventory of what you are good at, what you can handle in a pinch, and what you know you just can’t or don’t want to do. Write your list down. Now, think about the types of people available to help you with the areas you are weak in. Here’s a list of the various types of professionals I have used over the years.
Realtor, attorney, bookkeeper, accountant, general contractor, specialized sub-contractor (roofer, plumber, electrician, heating and cooling, landscaper, etc.), handyman, engineer or home inspector, banker, mortgage broker or lender, private lender, hard-money lender, bird-dog, wholesaler, insurance agent, and commercial real estate broker.
While this is not meant to be an exhaustive list, and there may be others you need to rely on from time to time, this list should give you a pretty good idea of what types of professionals you need to be searching for. Chances are, you’re not good at all of these things, so it’s safe to say you will need to look for at least a few of these people.
Rely On The Experiences Of Others
Building a team is not something you will do all at once in a week or two. It will take time and perseverance, but it is not as difficult as it may appear. You can accomplish a great deal by asking for referrals from people you already know and trust.
Ask everyone you know about the people they do business with, and keep a written notebook of the referrals you get. I call these "warm contacts", and they are so much more useful than getting names from business cards or advertisements. Pay special attention to the names you get from other real estate investors. If your city has a Real Estate Investor’s Club, and you’re not already a member, join today! This will be a rich source of contacts, as well as local market information. You can’t afford not to be a member.
Once you have the name of a professional, an accountant for instance, you will want to meet and interview that person. Call them to schedule an appointment, and mention the name of the person who referred you. You may even want to invite them to lunch. Wherever you meet, it’s important to have a plan and know what you want to ask them ahead of time. Get to know them, and give them plenty of opportunity to talk about themselves and their method of doing business.
By all means don’t grill them or give them the third degree. You’ll find out all you need to know by simply having a conversation with them, and creatively weaving your important questions into the natural flow of the discussion. Write down the answers you find interesting, and refer back to them later when you’re deciding whether or not to hire the person. Remember to thank them for their time.
You Are The Judge And Jury
What criteria are you looking for? That depends on a few factors.
First, do you like the person? Life’s too short, and there are just too many other options, to waste time with someone you don’t want to be around.
Second, are they professional? Do they approach their business, and yours, with a serious attitude? Will they safeguard your time and money almost as if it were their own? Do you get the sense they are serious about their profession? Do they treat their business like a business and not a hobby. Incidentally, do you?
Finally, do they possess the experience, skill, and know-how you are looking for? The person who referred them to you can help answer that, but be sure to ask for additional referrals, and contact the referrals they give you. Ask plenty of questions and make sure they are fully capable of fulfilling your expectations.
Hire Them Right, And Enjoy The Journey
When you hire anybody, be it General Contractor or home inspector, make certain that you clearly define the scope of the relationship from the beginning, preferably in writing. Never enter into a business agreement involving the exchange of value (money or time) without a clear written agreement. This will save you all kinds of pain and aggravation later. The question isn’t whether someone will let you down, but when.<BR><BR>Just because you decide to put someone on your team today, doesn’t mean they will stay there forever. My team has evolved over time, and yours will too. As you work with people, you will notice things about them you didn’t see during the search process. Their methods may change over time, and your needs will change also. Don’t be afraid to end a partnership- after all, it’s a business relationship, not a marriage. Just be sure to honor all of your commitments.
Finally, enjoy the search process, and keep your eyes and ears open all the time. This can be the most exciting period in your investing life, and you never know when you are going to meet someone who would make a good fit on your team. I have found some of my most trusted advisors and professionals when I wasn’t looking, and when I least expected to find them. Many of them have subsequently become good friends.<BR><BR>Now, go make more offers!
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Tom Dunn is a successful real estate investor and author of the popular DealFiles Real Estate Investor Stories free newsletter. You are welcome to share this report, unedited and in it’s entirety, with anyone you like. You may not remove this text.? 2006 by Tom Dunn. Website: http://www.dealfiles.com e-mail: tom@dealfiles.com |
Real Estate Investing - 7 Steps To Success
October 30, 2009 by Kenny Santos
Filed under Real Estate Investing
For the uninitiated, investing in real estate can seem like a big, mysterious activity that you pretty much have to be born with a special gene to do. They don’t know that you can break it up into several smaller steps, and that it is only a matter of learning how to get through each one.
The following are seven steps you can follow in order to go from being an Average Joe or Josephine to being Joe Cool, real estate mogul. They will at least get you closer to the latter.
1. Realize that it is not outside of your grasp. As one step leads into another, you first have to begin thinking like a real estate investor. And real estate investors think about finding good deals. However, you may not know a good deal if it jumps up and bites you on the nose.
2. That’s why you have to learn some basic accounting. You don’t have to spend 10 years studying under ancient Chinese accounting master, but you should learn how to read financial statements. You should learn about cash flow. You should learn the difference between an asset and a liability, not just take your banker’s word for it.
3. Once you know how to read the language if investment, you will be in a position to learn how to recognize a good deal when you see one. This is a bit trickier. Although you should do plenty of reading on the subject, the best way to learn is through doing. Get out there and look for deals.
4. Learn about the markets you want to play in. If you are thinking about buying a specific kind of property, learn about the markets in the area you are interested in. The market should actually determine where you make your purchase. Look for a community that is progressive, for one thing. A place with a good quality of life. A place with a good economy.
5. Set goals. Determine what you want to accomplish and when you want to accomplish it. Make sure it is within your reach and then take the steps to actually make it happen.
6. Develop your team. You will need to hire professionals to help you with things like accounting and legal issues. You will want people who know more than you do about how buildings are put together to appraise property for you. According to Ken McElroy, author of ?The ABCs of Investing,? the worst thing you could do is skimp on this step and try to be a ?real estate do-it-yourselfer.? That may appear to save you money in the beginning but you will pay dearly in the end.
7. Make your first purchase. When the numbers add up, McElroy says, then it is a good deal. Don’t leap without looking, but if you’ve looked and the numbers add up, then it’s time to jump.
Of course, this is a simplified version of the process, but it is a good way to get an overview. Each one of these steps could be further mapped out. The trick is to do your research and take it at your own pace. Don’t rush. Learn the process. The first purchase will be the most difficult. After that, the real learning starts.
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About The Author: Alex Anderson Has a Website for Minneapolis Real Estate Agents and Assists Buyers To Purchase Minneapolis Investment Property As Well As National Investors Looking for Real Estate Investment Opportunities. |
Real Estate Investing- Four Ways to Eliminate Fear
October 30, 2009 by Kenny Santos
Filed under Real Estate Investing
OK, let’s face facts. It’s a big, scary, confusing world out there, and you can lose your shirt if you’re not careful. I’ve talked to investors who have been ripped off in every way you can imagine. Lied to, cheated, swindled, tricked, hoodwinked, bamboozled, and… well, you get the idea. There’s no shortage of ways to lose money.
One guy rented out his house and the tenants trashed it and disappeared into the night. A woman in the mid-west bought a house with an undisclosed gas leak, and it blew up the day she closed on it (thankfully no one was there at the time). A friend tried to flip a property and wound up losing several thousand dollars when the market tanked mid-flip.
I sold a mobile home to a couple who made two payments and decided that was enough. I lost a few thousand before I managed to get the home back- trashed of course.
There are problems with houses nobody could foresee, market ups and downs no one can predict, and sudden disasters few can imagine.
I know an investor in New Orleans that lost about half his entire portfolio to Hurricane Katrina.
Encouraged? You should be, and I’ll tell you why. Every one of the investors I just mentioned is STILL ACTIVELY INVESTING!
What Do They Know That You Don’t?
How is that possible, you ask? Simple. They know four things you don’t yet know.
For instance, the guy who had his house trashed has been investing just over 7 years. In that time he has purchased and rented out 17 single family homes and duplexes. He’s only lost money on one of them- the one I mentioned above- and even that is now re-rented to stable tenants. At the pace he’s investing, his portfolio will be worth $10,000,000 by 2010.
The Denver woman whose furnace exploded sued the person she bought the home from. After several months she settled out of court, collected the insurance money, walked away and purchased a small apartment building.
My friend the flipper has bought and sold between 30 and 40 houses since 1998. In that time, his annual income has shot from about 40k to over $300,000! Think he’s dwelling on the 2 or 3 houses he’s lost money on? I Doubt it.
And the New Orleans investor? He’s rehabbing many of the houses that were damaged by Katrina, still actively buying houses, and still collecting rents on the remainder of his portfolio.
So let’s talk about you. You may be saying, "That’s all well and good. They all have resources I don’t. I can’t afford to lose. What if something goes wrong on my first deal?" Or, maybe you’re thinking, "I don’t know enough. Those people are all experienced investors. I’m not- I’ll get killed by stuff I can’t see coming." Or perhaps, "If just one more thing goes wrong it’ll put me right over the edge. I can’t afford any more failures."
Those are all important and thoughtful arguments. They all have one thing in common.
They’re crap.
There are four main reasons for this. These four reasons also happen to be the four things that- if applied diligently and persistently in ANYONE’S life- will completely eliminate fear. Destroy it. Wipe it out. Obliterate it. Render it powerless. Get the idea? In short, WORK ON THESE and THESE WILL WORK!
Four Simple Ways
One- Clear thinking. Fear is a product of our thoughts, nothing more and nothing less. How we perceive a thing leads us to welcome it or fear it, or anything in between.
Experiment- Try this at home. Try to clearly remember the thing that scared you most as a child, something that really rattled your wits. Now think about when and why it scared you. Did it ALWAYS scare you, or was there a particular point in time that it STARTED to scare you? Why? What happened at that point in time to CAUSE you to become scared? Did the THING change, or did YOU?
Most people, when they think about it, find that their fear of something began at a specific point in time. Something happened that changed the way they perceived the object of their fear. Prior to the occurrence, they didn’t experience the same fear. After the occurrence-WHAMO! Fear, baby!
The thing that scared me most as a child were barking dogs. I couldn’t get near a barking dog without turning into a quivering bowl of jelly. It wasn’t always that way. When I was small I had a dog, and loved it. Then I was bitten on the stomach by a vicious dog, and my love turned to terror. What changed? Not dogs.
Dogs have always been the same- most are friendly, some are not. Some bite, most do not. Dogs didn’t change, I changed. Rather, my perception of dogs changed, based on one bad experience. Fear is like that- it’s icy grip is not based on logic, but on our "experience perception".
Experience perception is nothing more than the way our minds choose to think about and shape our memories. You can change your experience perception of almost anything by carefully crafting and choosing WHICH experiences to dwell on, and how to think about them. Choose to think about past failures and problems, and those will shape your experience perception. Choose instead to think about and clearly remember successes and victories and your experience perception will be increasingly shaped in strengthening ways.
Clear thinking about dogs has helped me overcome my fear. I remind myself of the pleasurable experiences I have had with MOST dogs. Soon, the ONE bad experience I had becomes insignificant. I no longer fear dogs. I like dogs.
Similarly, focus on your victories, think CLEARLY about your failures (were they REALLY failures?) and you will no longer fear failure- you will anticipate success. Make clear thinking a part of your mental training starting TODAY!
Two- Truthful self talk. Have you ever listened to the things you tell yourself? I did, and it wasn’t pretty, so I changed it. I caught myself saying all manner of ridiculous things that just weren’t true. One thing I told myself pretty consistently was, "You don’t DESERVE success." Maybe you can relate to that, or maybe you’ve got your own brand of self-deception. Whatever it is, you can change it.
We all talk to ourselves virtually non-stop. Pause and think- weren’t you just telling yourself something? Either you were agreeing with what I just said, or you were disagreeing, but you were saying SOMETHING to yourself. Learn to monitor carefully the things you tell yourself. I think you’ll be surprised by what you hear.
First, consciously force yourself to listen to your self talk. Then, when you are aware of it, write it down and dissect it. Think it through- is it really true? If not, why do you believe it? More important, why do you keep telling it to yourself? Focus on CHANGING your self talk, and start replacing all the lies with the truth. I mentioned one of those lies above. Remember, "It’ll put me right over the edge?" That’s a lie for sure.
After all, what exactly does that mean? Where is the "edge", anyway? Here’s another lie we tell ourselves- "I can’t take any more." Unless you’re dead, it’s just not true. Humans are nothing if not resilient. God created us that way. Somewhere somebody had gone through much more than you and rebounded from it. You can, too.
Replace the lies you tell yourself with truth. Where do you find these truths? The Bible is a great place to start. Articles like this one. Great books, websites, motivational tapes and CD’S. Start today.
Number Three- Education. Knowledge and skill breed confidence. As you increase your knowledge, you can feel your power grow and your fear diminish. For proof, consider an area you need to perform well in, but know very little about- like buying a car for instance. Many people dread buying a car. Why? Because of all the mystery involved. Funny thing, though. The more you learn about the product and the process of car shopping, the more confidence you have, and the less you will fear it.
Applied to real estate investing, the more books and courses you read and study, the less your fear will control you. Darkness gives way to light, and fear is always banished by the light. In fact, isn’t darkness often used as a metaphor for fear? There’s a very good reason for that. Things we can clearly see and understand lose their power over us- at least their power to cause fear.
There is a wealth of excellent material available on every conceivable real estate investing topic. You don’t need to go it alone. Somebody has already successfully done what you want to do, systematized it, and written it down. Buy books and courses. Read the free articles available here and on other websites. Start learning and never stop- you will see your fear diminish and your confidence soar.
Number Four- Faith. "Now faith is the substance of things hoped for, the evidence of things not seen." (Hebrews chapter 11, verse 1) When everything around you appears dark, and you can’t see the path in front of your feet- HAVE FAITH. When you know you’re supposed to be doing something, but you’re just too scared to do it- HAVE FAITH. When everybody says you can’t, but you know deep inside you can- HAVE FAITH. When you are all alone, even in a crowd- HAVE FAITH. When you don’t understand, and the world is a very confusing place- HAVE FAITH. When you are frustrated because you know you are right, but you are feeling so wrong- HAVE FAITH.
When you have blown it, and let everybody down- HAVE FAITH. When somebody else has blown it, and let you down- HAVE FAITH. When you are sick and need to be taken care of- HAVE FAITH. When you are well and taking care of everybody else- HAVE FAITH. When you are so tied up in knots, you feel like screaming- HAVE FAITH. When absolutely nothing is working- HAVE FAITH.
"Have faith in what?" you ask. Not what, but who- God. After all, He made you and He knows you better than you know yourself. He made you incredibly resilient, awesomely creative, wondrously imaginative, and highly intelligent. He has given you everything you need to be successful, and put everything into your hands you could possibly need. You only need to BELIEVE IT and start acting on it! That’s what faith is all about. HAVE FAITH!
These four ways to eliminate fear don’t just happen. You must actively cultivate each one. Anything worthwhile takes effort, but with the right kind of effort- applied in the right ways- you can overcome your fear! Remember- clear thinking, truthful self talk, education, and faith.
Now, go make more offers!
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Tom Dunn is a successful real estate investor and author of the popular DealFiles Real Estate Investor Stories free newsletter. You are welcome to share this article, unedited and in it’s entirety, with anyone you like. You may not remove this text.? 2006 by Tom Dunn Website: http://www.dealfiles.com email: tom@dealfiles.com |
Is Business Ownership In Your Future?
October 30, 2009 by Kenny Santos
Filed under Business/Network Marketing
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T he last time we met I told you about the U.S. Department of Labor?s prediction that within the next ten to fifteen years fifty percent of the American workforce will consist of home workers, independent contractors, consultants, telecommuters, freelancers, and of course, entrepreneurs. Think about that for a moment, especially if you are a diehard nine-to-fiver who can?t imagine yourself leaving the comfort of a regular job to try something different. The workplace of the future is either going to be an exciting or dreadful place, and it?s up to you which side of the coin you fall on. You see, what the Labor Department doesn?t say, but I believe to be true, is that those who find themselves earning a living in non-traditional careers will do so for one of two reasons: they either freely chose to throw off the shackles of the traditional nine-to-five or they were forced to do so because they were casualties of the future?s changing work models. Layoffs, downsizing, outsourcing, work force reduction, and position elimination: all very nice politically-correct terms that mean one thing: you had better be open to changing the way you think about work because, my brothers and sisters, the times they are a? changing. The point of our discussion last time focused on those of you who may one day choose the entrepreneurial path. There is a process for going from worker bee to entrepreneur wannabe and it begins with a healthy dose of self-assessment (look inward to determine if you have what it takes to be an entrepreneur) followed by the determination of what kind of business best suits your situation and personality, how you will fund the business, and the writing of a solid business plan. Now let?s talk about the nuts and bolts of the process: finding a location, lining up vendors, hiring and managing employees, dealing with customers, creating a marketing strategy … hmm, this could turn into a very long column. Let me see if I can abbreviate the process in four paragraphs or less. If your business will be a brick and mortar, nothing is as important as location. What might be a great location for a shoe store might be a horrible location for a donut shop. What may appear to be a busy location in the morning might be a ghost town in the afternoon. You should rely on experts for this important piece of the process. Work with a commercial realtor or business broker to find a location that meets your specific needs. Next, if yours will be a product-driven business, your success could hinge on the quality, price, and availability of the products you sell. You must establish strong relationships with reliable vendors who can provide an ample supply of the products your customers demand. Always be cultivating relationships with new vendors. Never rely on a single source for products because sources have a tendency to dry up over time. Next comes the hiring and managing of employees. Like your location and product, employees can make or break your business. Knowledgeable employees who know the value of - and deliver - exceptional customer service are like nuggets of gold. Unfortunately, they are also as hard to find. Don?t hire your wife?s brother or your best friend?s son. It?s easier to find a new best friend than a new customer. Hire based on experience and expertise and train every employee well. Set expectations high and most important of all, lead by example, not by the book. Finally, the big question: if you build it will they come? Afraid not, my new entrepreneur friend. You must have a killer marketing plan that will bring the world - or at least your piece of the world - to your door. You can have the best product in the world, but if you don?t tell anyone about it, you won?t sell a thing. Creating a killer marketing plan really isn?t that hard. Just ask yourself questions like: who is my target customer and what is the best way to reach them? What can I do to stand out from the crowd? What can I do differently? How can I get noticed? And how can I do that without spending an arm and leg on advertising? Two great books on this topic are Purple Cow by Seth Godin and There?s A Customer Born Every Minute: P.T. Barnum?s Secrets To Business Success by Joe Vitale. Of course there?s far more to going from employee to entrepreneur than I can cover here in just a couple of columns, which is why I wrote a book on the topic called Everything I Know About Business I Learned From My Mama. Shameless self-promotion aside, I hope this will help you decide if future entrepreneurship is for you. No matter what path you choose remember this: the workplace is changing. You must be prepared and willing to change with it or you?ll end up a statistic on another government list, this one stamped: Unemployed.
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