Be A Great Entrepreneur: Teach Yourself

Entrepreneurship

Entrepreneurship

If you're wanting to learn how to set goals now for tomorrow's benefit. Then this may be the most important letter you'll ever read. You're About To Learn All About Growth Potential Without Potential Waste And How To Manage Your Money Principles, No Matter How Much Time You Have Had To Prepare. It doesn't matter if you've never experienced entrepreneurship up close and personal, This guide will tell you everything you need to know, without spending too much brainpower!

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The Real Estate Developer

In this Part I, we will become acquainted with the real estate industry and its participants. We will introduce income property and property held or developed for sale. We will examine closely the role of the entrepreneur and the basics of financial analysis. Cases will feature a variety of land uses - high and low density housing, as well as office and both new and

About The Real Estate Industry

It is often said that 'the real estate industry is unlike any other.' It's a statement that is both true and false. In truth, it is an observation that few industries welcome and foster the entrepreneurial spirit as real estate does. On the other hand, it is a statement lacking accountability, as it is dangerously false to think the real estate industry is immune to the pressures of change and the power of the consumer.

Business Pmnciple No 2 Team

Just as every good business has a strategy, every successful business owner has a very carefully chosen team of individuals and companies to help him her You may wonder if I include accounting as a basic principle of business because of my accounting background. While I have to admit to a natural bias in favor of good accounting, I believe that if you were to ask one hundred successful business owners if good accounting (including good reporting) were critical to their business, at least ninety-five of them would agree. Great entrepreneurs understand the purpose of accounting. Here are a few of my personal keys to great accounting.

Healthy Monthly Income

The third and final requirement for buying a property the traditional way is a steady source of monthly income. Of course, in the world of mortgage lenders, this means that you have been with your employer for several years and earn enough to pay the monthly payments in the event you can't find a renter for your property. If you're self-employed, things just got a lot tougher for you. If you don't have at least two years of tax returns and bank statements to support your application, you won't be getting that investment loan.

TIP America is [still the land of opportunity In my opinion this statement is actually truer today than it has ever

However, I don't believe America is the only land of opportunity. Through my travels, studies, and friends, I see tremendous entrepreneurial possibilities in every capitalist country in the world. It is a matter of clear vision and of training ourselves to see things as they are, not as they once were, or as we hope they might be.

Who Doesnt Belong on Your Power Team

Now that we've talked about who should be on your Power Team, let's finish up with who shouldn't be on it. Reject anyone who thinks you can't achieve your dreams. That includes the well-meaning friends and relatives who tell you that owning your own business is a nice fantasy, but maybe you should get a job and work for someone else for a while. It includes anyone who implies that you don't have what it takes. It includes all of those no matter how much you care about or trust them with a negative attitude who want to keep you in the hole they've dug for themselves.

Review Questions and Answers

You may not see a lot of questions like this one, but I wanted to give you one anyway. It isn't a very good question in my opinion because the statement Accounting requires is too vague. Don't forget that you're taking a state real estate exam. Sometimes an assumption is made in the wording of a question such that you know that you're dealing with a question in a real estate context. So an accountant may think a client needs to get a monthly statement of expense, but a real estate agent wouldn't think that unless he were a property manager and had specifically agreed to provide the statement to his client. Those circumstances are, however, too narrow for the monthly statement answer to be correct. Conversion is when a client's money is used for broker's expenses, and commingling is when the broker mixes a client's money and his own business or personal money in the same account. Both are illegal.

Top producers dont prospect

As you become more and more successful at real estate sales, you may even do more prospecting, in part because prospecting becomes more natural and is easier than ever. As you acquire name recognition and market presence, the people you contact are increasingly honored and pleasantly surprised to receive your calls. They know that you're busy and successful, and they respond not only with their own business, but with many referrals as well.

Why the Sublease Option Strategy Isnt Financially Feasible

The main reason I am not a fan of the sublease-option strategy that is being taught today is that it is not financially feasible. In other words, there is just not enough profit in most sublease-option transactions to make them financially worthwhile. For example, under a typical sublease-option scenario, a lessee-optionee would be lucky to receive from a tenant-buyer a 1,000 option fee and a monthly sublease payment that is 100 above his or her lease payment. In most cases, what appears on paper as a 100 a month positive cash flow really is not. This is because most investors involved in sublease-option transactions never bother to factor in the amount of time they spend managing property as a business expense. If they did, they would come to the quick realization that they are working for minimum wage. I do not know about you, but to me, the prospect of working for minimum wage, especially as a self-employed real estate investor, has zero appeal However, low wages are not the only...

Stopping a Foreclosure

Here's what a typical preforeclosure deal might look like. A hypothetical couple, Sam and Susan Sunshine, have a house worth 182,000. The principal balance on their first mortgage is 105,000, and they have a second mortgage of 15,000. Sam owned his own business but about a year ago suffered an injury that left him unable to work. He didn't have disability insurance and his business failed. Susan's job doesn't pay enough to support them in their current lifestyle. They've gradually gotten further and further behind on their house payments, and now they're facing foreclosure.

Individual Retirement Accounts IRAs and Keogh Plans

As private pension programs became more popular with liberalized tax-deferred contributions for Individual Retirement Accounts for employees, and allowances under the Keogh Plan for self-employed persons, substantially more of these dollars are entering the capital markets. These funds are an important source of real estate financing on all levels. New money is being brought into the capital market from employers, employees, and the self-employed in what might be viewed as a captive market, since the steady inflow of such funds is often more stable and dependable than savings inflow into thrift institutions. (Pension funds accumulate until each member reaches retirement age, whereas savings strictly as time deposits are more volatile.)

What Are You Looking

Period of time or was relatively stable. The work history should also be a clue to his or her stability. Did the prospective tenant hold many jobs over a short period of time or just one or two Does the person work for a corporation, or is he or she self-employed Self-employed people are a bit harder to check because there is literally no supervisor to call. However, as you have no doubt guessed, the most important factor in the background check is the prospect's credit. That is still the most telling factor about how people conduct their financial lives and is the best indication of how much of a risk that person is to do business with. For those who don't know exactly how a credit check works, I'll discuss it now.

Reduced Purchase Price

This is not rocket science, but rather a basic rule of the entrepreneur. You don't necessarily need to steal the property, but you should try to negotiate a price 10-20 below market. In a hot market, this may be difficult to do, ) You may only be able to negotiate a 5-7 discount, which is the equivalent of what

What to Look for in a Leasing Agent Advisor

This whole leasing effort has to be a partnership. There has to be a good rapport. A good leasing agent advisor understands your objectives, and then works to match the right space and the right tenants. Plus, a good leasing agent advisor willingly takes on even small businesses or buildings and educates clients as they grow into bigger businesses. I found space for one software company many years ago. It was their first space when they were just three people strong. I think the office was all of twelve hundred square feet. At the time, I was doing much bigger deals, but to me that didn't matter. We developed rapport and within a few years, I handled the transactions surrounding their 137,000 square foot corporate office and their more than forty-four offices worldwide. It happens. Finally, and this probably goes without saying, you want a leasing agent advisor with a solid reputation in the community. How can you be sure You ask around. You talk to other building owners and talk to...

Ways to Learn More

As copartner of MC Companies, www.mccompanies.com, Ken McElroy has more than twenty years of partner-level experience representing more than 20,000 units of multifamily asset property management, development, project construction management, investment analysis, acquisitions, and dispositions. As host of WS Radio's weekly Entrepreneur Magazine's Real Estate Radio program, Ken interviews experts in the real estate, finance, and legal arenas. He is a popular speaker at industry events, and his accomplishments as an author include The ABC's of Real Estate Investing, Rich Dad's Advisors The Advanced Guide to Real Estate Investing, and The ABC's of Property Management.

Marketing Your Ticket to Finding and Profiting from Foreclosures

A friend of mine, Joe Polish, called one day and asked if I would like to meet Dean. When the two of them walked into my office, it was like looking at a pair of bookends. I have known Joe for years, and he is what I call a natural entrepreneur. So is Dean. Listening to the two of them talk about their businesses, I realized both young men were born entrepreneurs. I had to learn to be one. For several hours I listened to both guys educate me on subjects I thought I was pretty good at. Both Joe and Dean are natural teachers.

How to Pay an Assistant

Now, why does that format work well It gives the assistant some incentive to help you. She or he takes some mental ownership in your business and is not just showing up everyday. If your assistant had a vested interest in you, because the more money you make the more money he makes, would he perform better And if you gave your assistant her own business cards that said, Jane Moss, Assistant to Ed Hunter, don't you think that she would give these out at parties, in the supermarket, to friends, and so on You've got somebody out there prospecting for you, because she has an incentive to get rid of the cards, to help you prospect, to help you succeed. Better still, consider giving your assistant a powerful title such as By the way, not all people will go for incentive-based pay. Some assistants just want a steady paycheck. The type of assistant who is willing to take a low base and an override is someone who will be aggressive, an entrepreneurial thinker, and that's a good person to have...

Financing The Project

In Part I of this casebook, we became acquain ted with the real estate industry and its participants. We were introduced to income property and property held or developed for sale. We examined closely the role of the entrepreneur and the basics of financial analysis. Cases featured a variety of land uses and included both new and rehabilitation construction. We concluded with a case involving a lender.

Business Instead of IN the Business

But you should know that you don't necessarily have to net a million dollars to make the move to business owner and passive income. For example, if your business were netting you 200,000 a year and you could hire someone to run it for you for 100,000 a year, you'd have a business that netted you 100,000 a year. That is nothing to sneeze at Before I can introduce you to the four issues of Receive a Million, I need to point out that as a business owner you will be challenged to work ON your business instead of working IN it. So what's the difference As Michael Gerber explains in his book E-Myth, IN is when you are doing the actual day-to-day work of the business, and ON is when you are doing the work of planning and building the business. If it helps you to remember the difference, try thinking of it this way The difference between IN and ON is the difference between a focus on I (what I do to achieve the goals of the business) and a focus on O (what others do to achieve the goals of...

Selling Property Via Owner Financing

In some parts of the country it is estimated that close to 50 percent of all households cannot qualify for conventional financing. Reasons are diverse, including being self-employed, being a nonresident alien, having multiple real estate loans, and being an investor whose main source of income is from rentals. Numerous property problems can also contribute to the need for owner financing. Examples of such problems are zoning is

If you cant turn the situation around dont concede your profit

Figures 15-1 and 15-2 present samples of each of these checklists to guide you as you develop forms that work for your own business. Standard procedures vary from state to state and MLS board to MLS board. While the samples included in this book will be 90 percent accurate for your situation, you'll need to customize them to fit the requirements of your state, region, or local laws and code of ethics.

Assisting the Tenant in Finding a Mortgage

Lenders usually like to see a person with at least two years of provable income in his field. Self-employed persons must show income statements and tax returns. Many non-conventional lenders are now offering non-income verification (N1V) loans. These loans usually require more cash down payment and demand higher interest rates, but will permit someone to obtain a loan with virtually no proof of income. Since this loan requires more cash down, you may have to offer your tenant a larger rent credit or take back a second mortgage for part of the purchase price when the tenant exercises his option.

Failing to Build Your Real Estate Practice as a Business

Most real estate agents launch their careers with only two objectives To achieve a certain level of income and to enjoy the freedom of self-employment. Only a rare few start out with the idea of building a business that will grow for years and that can be sold to someone else in the future. If you adopt a business owner's mindset, you'll derive far greater benefits from the time, effort, and money you invest in your real estate practice. Here's why You need to make nearly the same investment in marketing strategies, customer service strategies, and time management techniques whether you operate as a single agent who sells homes or whether you run a real estate sales business that employs a team of transaction coordinators, listing coordinators, and buyer agents.

Overcoming the Fear of Failing

For years I have traveled the world, speaking on entrepreneurship and investing. My intent is to highlight the importance of financial education and how financial education is essential to financial freedom and financial security. When asked what I personally invest in, I say, I became financially independent investing in real estate.

InHouse Lead Generation Program

Cliff has been referred to as a serial entrepreneur by those who know him. Having started his first publishing company at age 16, his business experience has crossed into many industries, including real estate brokerage, game companies, bars and restaurants, hotels, construction, and real estate investments.

The Millionaire Real Estate Energy Plan

Early in my professional career, I discovered a simple program to harness energy for my life and pull me through the day. It is deceptively simple, but it is also one of the most powerful things I've ever done in support of my goals. Having a steady supply of positive energy is invaluable for the entrepreneur I call it the Millionaire Real Estate Agent Energy Plan a big plan for big energy

Your Role and Responsibilities

The role of the Millionaire Real Estate Agent in a 7th Level business is very clear. It is the same role that every successful business owner has accountability. You're never released from this responsibility until you decide to sell the business and pass the mantle of accountability to the next owner. At the end of the day, the buck stops with you. It is your business, and you are accountable for its financial success. You may be able

Creative Beginning with Lease Options for Investors

Twenty years, 23 homes, and 71 properties later, Brangham had become not just independently wealthy, but a nationally recognized author, speaker, and entrepreneur. In Housewise, she tells about her renovation experiences and the career she found by chance. As I've said, it's a great book for anyone who would like to learn hundreds of profit-making ideas that can be applied to buying and renovating fixers.

Business Pmnciple No 5 Taxes

The single biggest expense for most people is taxes. In the United States, which is routinely considered to be a low-tax country, the average business owner earning 100,000 pays more than 50 percent of his earnings to the government in some form of taxes. These include income taxes, property taxes, transfer taxes, sales taxes, employment taxes, and excise taxes, not to mention estate taxes. I'm not talking about going to dinner with your real estate agent or your accountant (though I'm sure they would appreciate it). I'm talking about going to dinner or a sporting event with your partner. For most of you, your business partner in real estate is your spouse. My experience with business owners is that when they go to dinner with their spouses they almost always talk about business. And if you and your spouse are working on the real estate business together, I can virtually guarantee that you are talking about your real estate every time you go out to eat. My wife and I eat out once or...

Handling Employee Payroll

There are two ways to address and handle the processing of a company's payroll taxes. The first method is to process and handle the payroll internally. This means that the company bookkeeper refers to the tax laws and tax tables to determine withholding amounts from employees' payroll checks and then sends in the required tax funds to the various tax agencies. This do-it-yourself method of handling payroll is often used by start-up businesses because of their desire to save money. However, improper filing of payroll taxes or the inappropriate use of an employer's payroll tax funds is one of the most common problem areas for small businesses.

Rental with performance fee Form Ipm4110 A B C D E F G

One last thought the Forms Computer Disk sold with this course (as well as the other Street Smart ecret courses) is changeable. If you just can't stand, or you must change a provision in the document YOU CAN Aren't computers great You bought this course to get the best an experienced landlord entrepreneur had to offer. Now use it It will yield you great rewards.

TIP Even in difficult economic times capital is rarely destroyed It only changes hands or changes forms

When a business does well, everyone wants to be a part of it. Wall Street clamors to buy shares in any enterprise that is producing a healthy return on investment. On the other hand, you have likely seen the statistics that suggest as many as 90 percent of small businesses fail within the first five years. People and companies squander billions of dollars in investment capital on poor business investments. If you want to attract capital to your business, make your business work. Make it profitable. Infuse it with passion and the prospect of continued success. People invest in real estate ventures to make money. If you develop a proven talent for generating solid returns and offer such an opportunity to others with proper disclosures, they will naturally want to be a part of your enterprise. With IRA funds of my own and limited money from family, friends, and clients I had known for years, I started buying the notes myself with private capital. I soon realized that I was building...

Great Northwest Land Company

Joey made the decision to start his own business in the immediate aftermath of the success of Sherwood Forest. The truth is, I had reached a point where I just did not want to work for someone else. I woke up one morning with a book I had been reading the night before, and it was more appealing to me to just sit in bed and read that book than to go to work. I knew then that I needed to be on my own. It cost Joey ten months of effort and a great deal of money to set up his own business. While at Hendricks, part of his compensation had been a percentage interest in each of the deals in which he had a significant involvement. A consequence of his leaving was loss of value of his interest in ongoing projects. He sold his interest in one deal for 30,000 (a fraction of the actual value of his share) so he would have money to live on his first year. In addition, each of his partners put up 25,000 in working capital for furniture, a car for his construction manager, deposits on land, etc. I...

Real Life Story

A good real estate attorney can be your greatest ally. I frequently find myself providing ideas and advice that will enhance my clients' transactions and their businesses as a whole. At our firm, we approach projects from a business-owner's perspective. Business owners want us to tell them the things that are standing in their way, of course. But they also want us to come up with innovative ways to transcend the problems and get the deal done. If you have an attorney who seems to be pointing out all the problems without posing solutions, that's a sign that you may need another attorney. If you have an attorney who conducts himself or herself in a manner that makes you uncomfortable, e.g., rudeness, or overly passive or overly aggressive under the circumstances, then that's another sign that you may need another attorney.

Saving

Accumulating seed capital by saving money is the long, hard way to get your taw, but it has been proven viable by fledgling capitalists since ancient times. In his classic book The Richest Man in Babylon, George S. Clason shares a fable that clearly shows how one can go from the Rich Dad E quadrant (employee) to the S quadrant (specialist self-employed), and even to the I quadrant (investor), by frugality and sacrifice. In America and other capitalist countries, immigrants prove over and over again that by working hard sometimes even for subsistence wages and by saving part of what they earn, individuals or families can rise quickly to capital ownership and wealth. Setting aside a portion of one's labor to accumulate an initial capital stake is within everyone's reach, just as I employed my own labor to dig in the dirt until I found my first marble. However, no matter how much capital you acquire by your own labor, your earnings will always be limited by the hours you can spend at...

Valuing The Property

It occurred to Prudence that an important issue in valuing the property was what Mr. Meaney might do with it should he not sell. At present the Hall probably represented a liability in that the owner was presumably paying taxes and incurring some maintenance and security expenses on the property. On the other hand, Providence had no ordinance requiring approval for new parking lots. Mr. Meaney could therefore demolish the Hall at a cost of, say, 60,000, deducting this from his taxable income, and then generate income from parking. Although the lot would be too small to warrant its own attendant, and would need about 10,000 spent on it for curbs and paving, the operator of the adjacent lot might be able to run both together. Parking spaces were currently costing 2.25 a day in this area of Providence. With some jockey parking, the land would accommodate 30 cars, representing a potential income of about 20,000 per year. Since Mr. Meaney might impute additional value for having convenient...

Tax Deductions

Many people find it hard to start a business, but investing in real estate is more passive. It still requires some work, especially in the beginning, but it is more achievable for most people than most other wealth-building techniques. Now, here's the good news. Real estate investing is also a business. You can now take advantage of all of the tax benefits that are available to the business owner. That can be a big change for someone who has always been an employee, used to following the Earn-Tax-Spend syndrome of the employee, where you earn money, pay tax on it, and then spend what's left. As a business owner, you can take advantage of legal tax loopholes to use the Earn-Spend-Tax solution of the business owner, where you earn money, then spend on legitimate deductions, and pay tax on what's left. In other words, there are some items that you can pay for with be-fore-tax money. Here are the five most common business deductions for real estate investors.

The Real World of Me

My former partner, Robert Pulley, used to frequently say that deals are like streetcars since there's always another one coming down the track. Over time I have come to realize how true this postulate is. I used to pursue to thoughtful decision almost every deal that came across my desk regardless of what it was, where it was, or what it cost. By allowing my curiosity to take charge, I spent too much time spinning my wheels rather than focusing on realities. That curiosity and arrogance concerning my personal entrepreneurial capacity (I thought I could finance and manage anything) got me into some bad business spots, literally and figuratively. My experiences in Russia and in the nightclub and cemetery businesses (discussed later) represent painful memories that have stayed with me.

Business Structure

Generally, if you are buying a property to flip, you will have earned income. Earned income is money you work for. This income is subject to a self-employment tax of 15.3 percent if you hold the property in your own name, in the name of an LLC taxed at the default of single-member status, or partnership or if the property is held in the name of a general partnership. If the property is held in your own name, you have extra tax due to the self-employment tax plus you put all of your other property at risk. The same risk occurs if the property is in the name of a general partnership. An LLC will give you asset protection, but if you are the only owner (called a single member) and you do not elect to be taxed as an S corporation or C corporation, you will have self-employment tax. If you have an LLC with multiple owners (called a multimember LLC) and have not elected to be taxed as an S corporation or a C corporation, you will again have self-employment tax. Remember, though, there is...

Lease Options

Many tenants would like to own their own homes. Yet for reasons of blemished credit, self-employment (especially those with off-the-books' income or tax-minimized income), unstable income (commissions, tips), or lack of cash, they believe that they can't qualify for a mortgage from a lending institution. For these renters, the lease option (a lease with an option to purchase) solves their dilemma. Properly structured, the lease option permits renters to acquire ownership rights. Simultaneously, it gives them time to improve their financial profile (from the perspective of a mortgage lender).

No Money Down

A loan officer works for a bank and has a limited number of loan programs available. If you fit their criteria, you can get a loan. But, if you are self-employed, have credit challenges, or are otherwise a little outside of the norm, you will have difficulty.

Maximizing Your Time

7he most significant challenge in an entrepreneurial business like real estate sales is managing time effectively. The daily battle against procrastination, distractions, interruptions, low-priority activities, and ingrained customer expectations of instant accessibility can exhaust even the most energetic agent and can derail the plans of all but the most disciplined time manager.

Listen

A common type of loan for the real estate investor or business owner is a stated income loan. This type of loan does not require income verification. Lenders consider the lack of verifiable income to be added risk. The lender will calculate a qualifying debt ratio based on the income that the borrower states on the application. Verification of the source of income is required. Not all stated income loans are eligible to wage earners. Many lenders want stated income borrowers to be self-employed for two years and provide a letter from their CPA confirming this.You can be self-employed simply by filing a Schedule C for two consecutive years. The Schedule C does not need to show income.

How To Write Mvvbp

Our experience with accountability has shown that tough-love accountability with people who are not true talent eventually leads to a mutual parting of the ways or a reduction in their responsibilities. And then you will need to find a truly great hire to replace them. If your other two hires have been great, they will help you make this transition in a way that forces you to step back into the business and completely take over the missing person's job. But you've got to be prepared to do this at any time, if that is what is necessary to preserve the business and get it back on track. It's like James Stewart's character, George Bailey, in It's a Wonderful Life, who, on his wedding night, jumps behind the counter to save the family business, the Bailey Bros. Building and Loan, from a potentially disastrous bank run. Business ownership is never really passive, and sometimes it requires sacrifices on your part. Holding your people accountable to standards is the way you improve the odds...

Tax Issues

If you are an active real estate investor, you should be aware of what the IRS calls dealer status.11 Tf you have investment properties, you report income, expenses and depreciation on schedule E of your tax return. If you carry back some seller financing on the sale of an investment property, the profit is reported as It is received, Capital gains and rental income are generally not subject to self-employment taxes. If the IRS pegs you as a dealer, your properties are considered inventory, not investments. Inventory must be reported on your schedule C. Your income and gains are then subject to self-employment tax. In fact, if the IRS considers you a dealer, all of your property may be considered dealer property, even your long-term rentals. If this happens, you must pay taxes on the full amount of your profit on any installment sales in the year you sell the property. Thus, if you sell to your subtenant and carry a promissory note for part or all of the equity, you must pay taxes on...