Think Like A Millionaire
Dreams of wealth, a luxurious lifestyle, and multimillionaire status may be driving you now, but if you're going to make them come true, you need to establish a few simple goals. And your first goal should be financial independence. The definition of financial independence is having enough money coming in every month to make your mortgage and car payments, put food on the table, have a little luxury money left, and not need a full-time job. For me, financial independence came at the age of 23, when I had properties generating a net income of 1,400 a month. That may not sound like much today, but remember that at the time I was making 6 an hour working in a slaughterhouse 240 a week so 1,400 a month was nearly double my take-home wages. That's when I was able to quit my job and concentrate on building my real estate business. That's what you want Have enough passive income coming in every month so you can pay your mortgage and car loan, handle your other expenses, and have a little bit...
And if you happen to be one of the many people in America who have an overly negative attitude, you are in desperate need of what is known in the Marine Corps as an attitude adjustment. In simple terms, an attitude adjustment involves changing or adjusting your outlook on life, from that of a skeptical pessimist looking for nothing but the worst, to an open-minded optimist, who focuses on the reward instead of the risk. This does not mean that you ignore risks it simply means that you no longer let them stop you from achieving success.
Yes, long-term appreciation will boost a property's value. Nevertheless, if you overpay, you may wait five years (or more) for the market to catch up. During that time you could have been building wealth. Even worse, the more you pay (especially with high loan-to-value LTV financing), the larger your mortgage payments, the less your cash flow. In fact, often today's high prices yield negative cash flows. Whenever possible, make money when you buy, not just when you sell. You reduce risk and increase your chance for great returns when you buy properties at or (preferably) below their market values. But this tactic requires that you know what the term market value really means.2
Like everything else, real estate sales has its 20 percent. The 20 percent the Millionaire Real Estate Agent focuses on are the Three L's Leads, Listings, and Leverage. When you are concentrating on Leads, Listings, and Leverage, you are focusing on the key activities that will yield the greatest return for your business. Let's refresh our memory as to why these areas should always be foremost in your mind and go into a bit more detail.
This is the second most important number a Millionaire Real Estate Agent needs to know. Your entire business model should be built around obtaining a certain number of seller listings each month and year. Seller listings, as we have mentioned, are the high-leverage, maximum-earning opportunity in this industry. Seller listings properly marketed will generate more leads and buyer contracts. If you don't get them, your model can quickly begin to break down.
To make money from mobile homes, the first thing you need to do is get rid of any preconceived notions you may have about trailer parks. Understand that many people choose to live in mobile homes because of their affordability, but many also enjoy the mobile home lifestyle -just as some people prefer condominiums and others prefer single-family homes. Mobile homes are popular as retirement housing, as seasonal second homes, and as primary homes for young families and individuals in the low-income to middle-income brackets. Though most mobile homes are technically mobile meaning they have wheels and can be moved the vast majority of them are installed on a site and never moved.
Would you like to borrow a million dollars from a friend interest free for five years Imagine you had a friend who said, Here is the money. All I want is for you to return my original million dollars back to me within five years. Any profits you make with the money are yours to keep. wouldn't you love to have a friend like that In a sense that's exactly what you're able to enjoy with Purchase option investing. The only real difference is that instead of a million dollars cash earning you money, you have a million dollars worth of property that you control earning you money. Just like that million dollars sitting in a bank at five percent would earn you 50,000 a year, as the value of the real estate you control goes up in value, you are making money with someone else's asset This is leveraging in the best sense.
You can make money in several different ways, such as capital appreciation, renting, and equity buildup, by investing in real estate. As an agent (and as a test taker), you need to be familiar with all the moneymaking methods and the appropriate terminology. In this section, I cover the basics. The most important thing to keep in mind when it comes to making money on investments is that an investor expects these two kinds of returns
TIP To be financially free your real estate must produce income in good or bad economies Once you learn to do that you
Rich dad often said, Many lazy people are hard-working people. At first, I did not understand what he meant. As I got older, I began to understand his words more clearly. Growing older, I also found it easier to be busy at work than it was to do what I needed to do. Today, I still use excuses such as, I'm busy or I have too much work to do or I need a break. Today, I meet many hard-working people, hiding behind the curtain of hard work, yet deep down, they are too lazy to get rich. So they invent an excuse. When I was in high school, my poor dad often said to me, I can't go to your football game because I've got work to do. He never attended a game in the three years I played high school football. He also said the same thing about becoming rich or at least financially free. He was always busy. In my opinion, he often used hard work as an excuse to hide from life. He was a good, hardworking, high-income, poor man. My rich dad was a rich man because he did not work hard for money....
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 David and Judie Crockett Millionaire Real Estate Agents Concord, OH Sales volume 53 million The Millionaire Real Estate Agent Energy Plan The Millionaire Real Estate Agents we know read books, listen to tapes, watch videos, and attend seminars and classes regularly. In fact, many spend as much as 10 to 15 percent of their work time pursuing learning. They call it an investment in themselves and a necessary one on the path to big achievement. We agree. It is both a good business strategy and a great life strategy.
If there is one thing that our experience has shown over the years, it is that Millionaire Real Estate Agents are always focused on personal development. For themselves, they attend seminars, seek out consulting relationships, and require their staff to do the same. They are always looking for ways to improve how they and their staff operate professionally and personally.
Some Millionaire Real Estate Agents may opt to make the buyer specialist a graduated hire and begin with a licensed showing assistant. This allows them the option of being directly involved in initial consultations, negotiations, and preparing offers and contracts, while avoiding potentially long afternoons escorting buyers around town. By getting help in the selling side, you can increasingly devote your attention to the two most important sales activities in your model, leads and listings. As we have discussed, the more listings you have and market properly, the more buyers you will have. As you increasingly devote your energies to listings, you may need more than one person on the buyer side to handle the selling side of your business. In the end, you will need a talented lead buyer The lead coordinator is an interesting piece of the administrative puzzle. This is the person charged with receiving, sourcing, assigning, and tracking your leads through a database. In the beginning,...
One of the first steps toward success is knowing what you want out of your real estate career. However, financial independence is not a specific-enough answer. I've been in real estate, either in direct sales or teaching, speaking, training, writing, or coaching people, for nearly 20 years. I've met tens of thousands of agents and nearly every one started selling real estate with the same goal of financial independence. Countless times I've asked the question Tell me, how do you define financial independence What I usually hear in response is some variation of the answer, So I don't have to worry about money anymore. The key to eliminating money worries is establishing a financial goal an actual number that you need to accumulate in order to achieve the quality of life you want to enjoy. Financial independence boils down to a number. Set that number in your mind and then launch your career with the intention to achieve your goal by a specific date. By having your financial goal in...
Is it really possible to make money investing in real estate This is an easy question for us to answer. We, the authors of this book, have both been active investors for over 20 years. In fact, we added it up and found that together we have 50 years of experience in real estate (and we looked at each other thinking That makes you quite old ). And, even more important, despite our active schedules due to our respective businesses and speaking calendars, we are both still prolific real estate investors. But, those are just our stories. Here are a couple more stories of how our clients and customers have been able to use insider's tips to make money in real estate.
Ognized that there was a lot of money to be made in various ways in real estate. For example, they could make money buying, rehabbing, and selling property. But they wanted to do something that Dolf calls property with a twist. In other words, they searched for extraordinary profit-making opportunities. They found that they could buy certain properties on a block and then control a large portion of that block. In this way, they leveraged their position to a large developer. Recently they spent nearly 3 million by slowly buying individual properties, and then resold them as a project for over 9 million. They've made a lot of money, and they've also had a significant role in transforming neighborhoods.
Sometimes work gets in the way of making money. That was the case for two clients of Diane's CPA firm. We'll call them Marvin and Joan for purposes of this story. Marvin was a highly compensated doctor and his wife Joan continued to work parttime as a nurse. She did it more for something to do than for the money. Marvin earned a very high income, but he felt trapped. The money they made went to support their high lifestyle. They didn't want to change their lifestyle, but instead looked for ways that they could make more money. up apartment projects, which she then quickly rented. In less than five years, Marvin and Joan made more money from their real estate than they did from Marvin's medical practice. They were financially free and they paid less tax.
One of the things that Dolf and Diane both do in their businesses is teach the people they work with. And, we've found that no matter where you are, or what your circumstances, it is possible to make money in real estate. We're fortunate to work with Beverly and Amy on a daily basis. Here are their real estate stories.
In order to create the plan for building wealth. We definitely agree that is important. But, we want to talk about an additional component velocity. Velocity is the speed at which you're moving on that path. Once you've calculated your velocity, you'll not only know where you are going but how fast it will take to get there.
She couldn't afford to keep paying for those negative cash flowing properties and the market was down. She panicked and sold them for even greater losses. When it was all done, she barely was able to avoid bankruptcy. Now she looked again at building a real estate portfolio. But this time she wanted to do it in a smart way by taking advantage of the five fundamental wealth-building strategies. Key for her was to make sure that the properties all created cash flow and created passive income. Will she make it It's hard to say. She has to overcome the big emotional loss first before she ever fully trusts the real estate market again.
Be clear at the outset of what your goal is as you invest in real estate. What is it you want from your investments And then develop a plan to give you that. Learn to say no to deals that don't fit the outcome you want. They can be great ways to make money for someone else. If it's not fulfilling what you want, it's just a distraction from your purpose.
List three reasons why you want to make more money in real estate. Get down to the real core reason of why you picked up this book. Some examples of great reasons would be to create a secure retirement, to build wealth for my family, to contribute more to my favorite charities and causes and the like. Why are you reading this book What is it you really want 2. List 10 reasons why you can't make money in real estate. What is stopping you right now Some examples might be I don't have time. My credit is bad. It's impossible to find a deal in my home town. (Most people can come up with four or five options and get so discouraged they stop. Or maybe they can think of only five or six items. Well, this is the book for overachievers. We want you to keep going until you get 10 reasons. By the end of it, you might get really tired of finding reasons why you can't do a no-money-down deal.)
We've gone through many steps involved in finding a property. Now, it's time to put all of the information together into a tangible plan that you can use to make money in real estate The simple three-cycle system for property started from a conversation with Morgan Smith, founder of Morgan Capital. Morgan, at 33 years of age, has 60 offices and over 650 employees and yet still finds time to invest in his own real estate. He doesn't have time to waste on unnecessary steps. That's why this simple system is so effective.
To turn off a qualified advisor is to not trust him. Neither Dolf nor Diane need the money they make from their books, seminars, or other businesses. Both are completely financially independent based solely on their real estate investments. Why do we write books and speak publicly, holding ourselves out for public scrutiny It's because we are passionate about the education we provide and the transformations we are privileged to
You can maximize the unique wealth-building concepts of real estate to gain even further benefit. These wealth-building concepts are Do you want to know more about how to take advantage of these concepts You'll need to explore Chapter 4 One warning, though if you've read this and are sure that leverage of money means more debt (and that is sort of the right answer), we'll give you some financial planning for real estate investor tidbits first. In fact, if you've ever used your credit card because of an emergency such as your car breaking down or an unforeseen medical expense or even a sudden urge for a new purse or car, you'll learn how you can still have those things, but never have to use your credit card. That's all in Chapter 4 as well.
Of course, we answer all of those questions in The Insider's Guide to Making Money in Real Estate. But, there is another important question to consider here first for the person who has bad credit and no money. Why What is it about this person's past actions that has created this problem and what action steps should be done first to stop a former financial pattern from repeating The most important chapter to read in this case might very well be Chapter 3, What It Really Takes to Succeed in Real Estate. It's not a case of simply tapping into all the people anxious to give you money, although they really do exist. It's a case of first understanding what has caused the current situation.
Diane introduced the Jump Start method of tax-advantaged wealth-building in Loopholes of the Rich How the Rich Legally Make More Money and Pay Less Tax (2004, Wiley). (See Figure 4.1.) This method takes advantage of the three major components of favorable tax laws. These are (1) your business, (2) your real estate investments, and (3) your home. Did you notice that two of the three sources of tax loopholes come from real estate And, if your business buys the building it is in, you've got yet another real estate component. Did you notice that steps four through seven all relate to real estate We'll concentrate on those steps throughout the rest of the book. Real estate investing grows wealth even faster when you take advantage of the five wealth-building strategies
If you've bought this book, chances are you're looking for ways to make money. You might be intrigued with the idea of a passive income stream, or income that works when you don't want to, or perhaps you just relish the idea of telling your boss I quit some day soon. Maybe you're experiencing the feeling of I don't want to miss out as you hear about the success stories of other real estate investors, or it could be that you're already a successful real estate investor and are looking for the insider's tips to take your current investing to another level. No matter what level you are currently at, or what outcome you want from your real estate investing, the benefits you get will be directly related to how much you utilize all the wealth-building attributes of real estate. Owning real estate is not the only way to get rich. However, it is an easy way to begin building wealth. And real estate investing is the easiest way we know to build wealth using the principles of leverage and...
There are two things that the government wants you to do (1) Start businesses and (2) Invest in real estate. If you do one or both of those things, you will be rewarded with government-sanctioned loopholes. Can you imagine what it would be like to know that you're making more money than ever before and paying less tax and doing it all with the government's blessing 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.
Now how can you make the real estate benefits even bigger Chapter 4 will discuss how you can make even more when you take into account the five fundamental wealth-building strategies. The Insider's Guide to Making Money in Real Estate might look like a book, but we want to let you in on a secret. It's really a guidebook on how you can make money in real estate. Because it's not really a book, we don't want you to just sit back and passively read it. It's not enough to just learn about how real estate and tax laws can immediately put money in your pocket. You need to also be an active participant in creating your own real estate wealth. Now here's the active participation part. Look at the next two categories of action steps. One is for people who already have real estate investment property and the other is for people who do not yet have real estate investment property. Go through the action steps applicable for where you are. 10. Are you taking advantage of all three tax benefits,...
For many people, this is as far as they can see how to use leverage in their business. And, to be honest, we've seen people only get this far and make over a million dollars a year. They mastered the first three leverage points knowledge, systems, and other people's time. But there are two more leverage points, even more powerful than the others, still available
It's amazing how many people we run into who are afraid to make more money because they don't want to pay more tax. If you want to pay less tax, the secret is not how much money you make, it's how you make your money. The government provides tax loopholes for real estate investors as an incentive to promote investments. We've discussed some of the tax benefits of real estate in previous chapters.
Now multiply the leverage of time factor by the leverage of money factor. Your answer will be somewhere between 1 and 9. The fastest velocity is 9 the slowest is 1. As you begin investing in real estate, it's often best to start with a slow velocity. You might want to ensure cash flow by putting more money down and by being very careful with your other sources of debt or income. Additionally, it might be a good idea to also do many of the tasks of renovating and leasing your property in the beginning. This will give you experience that will be helpful as you develop systems and begin working with professionals.
Vestors who had gotten stuck at four properties. But, he didn't want to get stuck there. In fact, Tony made a lot of money through his other ventures and so he was accumulating cash that could be used for real estate. Cash on cash was the only analysis point he knew how to do. In fact, he never really learned how to read a property's financial statement. He finally got sick and tired of accumulating cash in a low-yield money market and decided any real estate investment was better than nothing.
Own international seminars, and regularly takes part in radio shows and television debates. Born in New Zealand, raised in Australia, New Zealand, and Europe, Dolf, with six languages up his sleeve, offers a truly global perspective on the surprisingly lucrative wealth-building opportunities of real estate.
These little snippets from conversations with qualified advisors investors show how valuable simply listening to your team can be. To quote Alec, After all, you're not doing all this just to buy real estate. You're buying real estate to make money. Anyone can buy real estate. It takes skill to make money doing it. The methods you talked about pre-foreclosure, foreclosure, tax sales, and the like are all valid ways to buy real estate. In fact, we believe that all education is good. The secret is to ask yourself what you are going to do with that information. Are you ready to move forward with investing Instead of looking for that one more piece of how do I do this , may we suggest that you today begin building your team and with the help of strong, reliable team members take the first step toward building your financial freedom through real estate The only way that it makes sense is if you really need to pay off the house to sleep at night and are tired of making money. A house...
WHAT AGENTS ARE SAYING ABOUT The Millionaire Real Estate Agent The Millionaire Real Estate Agent changed my life The concepts were very awakening and enlightening to me. The systems already mapped out for me to follow are priceless. Just take the book and carry it with you at all times as a road map to get you where you want to go. The concept 'Millionaire Real Estate Agent' is a lofty goal for anyone to strive for. The models provided in this book identify the pathways and the pitfalls. From the outset, Gary makes it clear that 'the money' is not the issue, but merely a marker. The ultimate goal is making a business worth having in order to have a life worth living. If any agent currently in real estate wants to make more money, net more money, work less and succeed at the highest level possible in their professional and personal lives, then The Millionaire Real Estate Agent was designed for them. Our business, our net worth, and our lives have all been greatly enhanced because of...
I first want to thank you for investing your money in a copy of How to Make Money with Real Estate Options. This one-of-a-kind book was written for serious, rational, reasonable, intelligent, reality-based, goal-driven, and action-oriented adults who are willing to take calculated risks in order to profit from the many money-making opportunities that real estate options provide today. I am a firm believer that a real how-to book should tell its readers precisely what to do while providing detailed instructions on exactly how to do it. I also believe that a how-to book should live up to its title. And I am very confident that this unique book will exceed your expectations on both counts As you will soon find out, it is packed with step-by-step instructions, ready-to-use worksheets, checklists, letters and agreements, and practical, no-nonsense advice on how to use real estate options to control undervalued properties with immediate resale profit potential.
Having a large income doesn't necessary mean you are wealthy. I know doctors and lawyers who make 300,000 a year but can't afford to go to dinner with my wife and me because they don't have two nickels to rub together at the end of the month. Why Because they make a decent income, but they don't understand the financial strategies that wealthy people use. They buy cars that are too expensive and houses with payments beyond their means their kids are in expensive private schools and they're busy trying to keep up with the Joneses. They may have income, but they don't have wealth. When you live paycheck to paycheck, it's not the amount that matters it's the lifestyle. I'm not saying that debt is always bad it isn't. When you use debt to buy things that increase in value and generate profits, you are thinking and operating like a wealthy person. The idea is to spend as much of your money as possible (after you pay for your necessities) on appreciatingassets, such as real estate or any...
While million-dollar deals are usually put together clause by clause, in most smaller deals people use whatever contract form is handy. Usually this is the form provided by the real estate broker. While this often results in the buyer paying for things he could have avoided, it sometimes costs the seller money, too.
I started out to become a millionaire 19 months ago with the idea of making it in five years. So far I've acquired about 200,000 in income properties and lakeshore raw land. I had no cash when I started this venture, but acting on the advice in one of your books I borrowed 10,000 in the form of a mortgage on my home. Since I had an excellent credit rating, I was able to buy two income buildings for 1 down on each. I just sold one of them for a net profit of 2,000 after owning it a year. I bought another building with 8 apartments for 63,000 with 1 down I could sell it now for a 10,000 net profit. There is no possible way I could put a price on the value your books have been to me in the past year and a half. California
That means you're building equity in the property and increasing your net worth each month as you deposit the tenant's rent check and write your own check to the lender. And if you can do it with one house, why couldn't you do it with two or three or four or however many it will take for you to reach your financial goals
HOW YOU CAN MAKE MONEY IN REAL ESTATE TODAY WITHOUT EVER BUYING ANY PROPERTY The problem with 99 percent of all the property-flipping strategies being taught today is that they require would-be real estate mavens to go out on buying binges and scarf up properties like they are going out of style and thus become financially responsible for monthly loan payments and property repairs. But for many people who want to profit from real estate, outright property ownership is too expensive, too time consuming, and far too risky. They crave a low-cost, low-risk way to make money in real estate, without ever having to buy any property. And this is exactly where little known and seldom used real estate options come into play. Options provide the ideal strategy for people who want to be part-time investors because they do not have a lot of money or time to spend on real estate. Plus, options are an excellent way for savvy investors to create leverage, reduce risk, and conserve capital, while...
If you're going to be wealthy, you must think and function like a wealthy person, which doesn't mean buying flashy cars and passing out 100 tips to the parking valets. It does mean applying the concepts of teamwork and mastering the art of delegation. when you succeed, they make money. Your real estate broker earns a commission from the property seller your mortgage broker earns a commission from the lending source your banker makes money on the interest you pay on the loan your insurance agent is paid by the insurance company and so on. What I really loved about real estate when I first got started was that I had all these knowledgeable, skilled professionals working hard for me, and someone else paid them it fit right into my budget. people make a lot of money from the deals I'm involved in because when the members of my Power Team are making money, I'm making money too.
The part of the country in which you work. It doesn't take any more ability or effort to sell a 300,000 house than it does to sell one that costs 150,000 (actually, often it takes far less), but you make roughly twice as much when you do. If you successfully sell residential real estate in an area where housing prices are traditionally high, you will earn a very impressive income. The obvious counterpoint is that it will cost you a lot to live there. Where you work will make a big difference in how much money you make. In most instances, you will be much better off working where you know the territory (and are known in the territory), but there are greener, high-paying pastures if you have wanderlust. For example, early in my Air Force career, I was stationed for a short time in New Rochelle, New York, which is in Westchester County. The last figures I saw on the median price of homes, they were around half a million dollars. The San Francisco Bay area is another area with high-priced...
If investing in real estate with little or no cash or credit were a sure route to wealth, this country would be awash in real estate millionaires. Overall, more than 10 million people have bought various nothing-down books, tapes, videos, courses, and seminars. With all this knowledge of creative finance floating about, you might think that the secrets of building real estate wealth were available to almost everyone.
One of the biggest benefits you get by using Purchase Option techniques is the wide variety of strategies you can call upon to close more deals, help more sellers, and make more money. About the Authors Mechanic to Millionaire If I had only been willing to admit that I needed some help, I could have found someone who had more experience than I did. Even if I had traded half of the profits in the deal in exchange for a mentor's expertise and guidance, I would have made 15,000 10 times more money The Purchase Option system has done away with the need to deal with tenants and toilets. You'll even be able to work the system part-time and still make big money. You'll discover, as many of my students and I have, that not only will you be making more money, but you'll be creating a lifestyle where you have the freedom to spend time with your family doing the things you want to do. Many wealth seekers so often overlook this aspect. They realize after it's too late that they've taken a wrong...
Elcome to the wonderful world of real estate. I wish I had you here in my classroom so I could ask you, as I do of my students on the first day of class, why you want to get your real estate license. Sure, it's to make money, but what drew you to the field Have you always been interested in houses Do you want to become an investor or a property manager Do the flexible hours and being your own boss appeal to you Real estate is exciting, and it's constantly changing and growing. There's always something new to learn and plenty of opportunities to make money, do interesting work, and help people.
Still, in the long run, you will end up building a great deal of long-term equity in your property, both from paying down the loan over the 30 years and also from the property's appreciation over time. If you did nothing more than buy 5-10 properties, and then manage them for the next thirty years, you would become a millionaire. it is a sure road to wealth.
Every time a client presents me with an opportunity to participate in an IRC Section 1031 transaction, I insist that he or she had his or her accountants run the numbers to determine the effect of paying the taxes versus deferring the tax with an exchange. From my vantage point, the tax savings do not replace the need for a strong real estate transaction for the replacement property. I believe you make money buying real estate which is best demonstrated when you sell real estate.
One of the keys to consistently making money as a real estate option investor is the ability to look at a piece of vacant property and visualize it being put to a variety of profitable uses. The real estate buzzword for this is adaptive reuse, which refers to putting a property to use in a way in which it was not originally intended. For example, when most people look at a vacant three-bay gas station, all they ever see is just a vacant three-bay gas station. However, when a savvy real estate option investor with a fertile imagination looks at a vacant three-bay gas station, he or she immediately sees a
I can't even count how many times I've been asked if the training course I teach is CE credit approved. I always answer with the same response and follow-up question. My response is that my course isn't CE certified because those who evaluate courses don't grant CE credit to courses that teach attendees how to make more money. My follow-up question is always, Do you really want a CE credit course, or do you want a course that teaches agents how to make more money To earn your manager's respect, attend courses and education sessions that teach you to make more money. Then implement what you discover after the session.
The market study and feasibility study may represent typical documents as reflections of a properly completed market analysis process. However, the mere presentation of fact is not enough. Just as accountants may present financial statements as rows and columns of numbers, those statements become most valuable when the accountant also explains what those numbers reveal. In real estate analysis, the same rule applies. There are several important differences, however, between specific real
The primary benefit of the traditional commission model franchise is that it is commonly accepted, understood, and supported, thus creating no barriers to recruiting agents from companies with similar commission structures. Furthermore, the cash flow for this sort of office is good if it is in a high-end marketplace or in a marketplace with a high volume of sales units. As the company's agents make more money and produce more sales, so should the broker's profits grow.
Concept 1 Prospecting is the name of the game. We're in a great profession. We do more than just list and sell houses. We make a difference with people by helping them move from point A to point B in their lives. Now, how we know we're doing a good job of this is by how much money we make. Money is a gauge of how many people we are helping the more we help people, the more money we make. To make more money, we need more closings. Concept 3 If you are in the office, you're not making money. The only way you make money is if you are out of the office seeing people whether it be buyers or sellers. And if you are in the office, your primary
One plus one is greater than two. Talent is wasted without equity, and equity tends to dissipate without talent. However, properly combined, T+E equals pure power. While it may be true that it sometimes takes money to make money, my experience tells me that of the two, talent or equity, talent is somewhat more important in building and maintaining wealth. For example, who wouldn't want to have the talent of Warren Buffett managing one's equities Of course, Mr. Buffett is not for hire. I understand it is often difficult to acquire Berkshire Hathaway stock because Buffett's talent has proven so exceptional that the current owners rarely sell their shares. I see that as an undeniable testament to talent. The stock market at large would throw billions of dollars at Mr. Buffett to have him get the results his talent has achieved for his investors.
Don Zeleznak Millionaire Real Estate Agent Scottsdale, AZ Sales volume 77 million We've found that the Big Why that gives you an action-first, damn the torpedoes mind-set combined with a Big Model that gives you everyday focus provides a powerful one-two punch toward knocking out your Big Goals. It follows that those who concentrate on implementing Big Models get a huge boost in living the Think Action principle of the Millionaire Real Estate Agent.
That if you never quit Millionaire Real Estate Agent Having a Big Why will help you focus on what the Millionaire Real Estate Agent usually has going for him the power and motivation that comes when your greatest fear is not reaching your goal. This allows him to slough off setbacks as they go without ever losing his faith or his momentum. He fears ultimate failure but is indomitable in the face of intermittent failure. Top agents persevere through the failures along the way so that they do not fail at the end of the day.
Without exception we build communities with the full intent of operating them once they are done. If the market is strong and the right buyer knocks on our door after the development is complete, we have an alternate option to make money on the investment, but we don't enter a project with this end in mind. It takes many months, or years, from the time we create the vision of our finished community to the time when we collect even a dollar in rent from the first tenant. To predict what the market will be like at the finish line is not always possible. But if you plan to own and operate the project after it is built and use those numbers in your pro forma, you begin with a more solid platform a better business premise from which to launch your development, lease it up, and operate the community profitably.
Mike Mendoza Millionaire Real Estate Agent Phoenix, AZ Sales volume 60 million Treating it like a game is also about learning to Think Strategically. The problem is that most real estate agents can't distinguish between rules (how you play) and strategies (how you win). In real estate, our rules have nothing to do with making money. They are about conduct, ethics, and protocol. You can be a master of conduct, ethics, and protocol and still be a pauper Now, I'm not in any way insinuating that you need to break the rules to succeed. Rules are about proper requisites and restraints. I advocate playing by them however, strategies are often found in the gray areas in between the rules. I can't relate to you how many times I've heard the following type of exchange low achiever Can we do that HIGH ACHIEVER Why Did someone say we couldn't When you go to work, to get the most out of your career you should have the same attitude as when you sit down to play a game. Think Competitively and...
With the knowledge from Chapter 2, you can now figure out a way to finance real estate. But to buy profitably, you must value property accurately. In the past, many real estate investors, to their regret, lost sight of this critical point. Even today most popular how-to books on real estate investing give short shrift to valuing properties. Why Because many authors and investors mistakenly believe that inflation cures all mistakes. Naively, many people think that to make money in real estate, all you have to do is buy it. Even if you pay too much, rising prices will eventually bail you out. Here's what David Schumacher has written
One of the most important things I've learned and that I teach my students is that making money in real estate is not a gamble nor does it depend on luck or chance. If you are properly trained, have developed a working system, and understand the basic rules, you'll make money consistently, no matter where you live. Every industry has its characteristics, the basic realities that are unchangeable and unarguable. In this chapter, I share some key fundamentals about investing in real estate and being in business. These truths apply virtually all the time, no matter the circumstances.
Here are seven real-life examples of building wealth in residential real estate. But before you read the letters below, Your first building is an asset. This asset will be valuable. It will show on your financial statement as an asset that is worth money. Now here are seven letters showing how BWBs are building wealth today in residential buildings.
The buyer or the seller may pay the fee in a buyer's agency agreement. Fiduciary responsibility (see the next section) doesn't follow the money. A buyer's agent who owes complete fiduciary responsibility to the buyer can be paid from a portion of the commission paid by a seller to the seller's agent. This is no different that when a fee is split in a co-brokering arrangement in which both brokers represent the seller. See Making Money (No, Not at the Copy Machine), later in this chapter, for more.
Lots of people want to invest in real estate but don't want to do the work involved in finding the properties and putting the deals together. They may be retired investors who have worked long enough and want to spend their time relaxing, or they may be working professionals (doctors, lawyers, etc.) who want a secure investment with a good return, or they may be anyone who understands the value of investing in real estate. They're willing to fund the deals of people like you who are out there doing the work. They make money and you build wealth it doesn't get much better than that It's also quite common for mortgage brokers to have a supply of private investors just ask. You will also be surprised by what happens when you start networking with your friends and colleagues, letting them know you have a great deal that they can make money on if they're willing to invest with you. Lester Theiss, a student of mine who you'll learn more about in later chapters, tells me he got his own...
Steve Bias loves being a minister, but in caring for his congregation, he was working himself to death and neglecting his family. After reading my book, Building Wealth, he decided that a second career as a real estate investor would give him the income he needed to have more control over his life and allow him to spend more time with his family.
Chris Cormack Millionaire Real Estate Agent Ashburn, VA Sales volume 70 million Leads are foremost in the Three L's of the Millionaire Real Estate Agent. You need to make sure you are not in the business of Lead Receiving and make sure you are always in the business of Lead Generating (and stay in it). Until you have enough leads to exceed your goals, there is no other issue. And, if you're willing to be a Millionaire Real Estate Agent, you can never have too many.
As an example, Craig's education of Kim and me began with our interest in a beautiful office building in a great location. It was a cute structure, built in the 1980s. The first thing Craig said was that there was not enough parking. He did not even look at the building. Since the 1980s, zoning laws had been passed requiring more parking spaces. If we wanted to improve the building, we would have to tear it down completely and rebuild from the ground up to comply with the new zoning law. The second lesson from Craig on the same building was that Cute buildings attract cute businesses. He went on to say, Rent to well-run businesses, not cute people running cute businesses. You'll have fewer headaches and earn more money.
And as I told you in Chapter 2, to consistently make money as an option investor, you must develop the ability to look at a piece of vacant property and come up with a variety of viable uses for it uses that your competitors have overlooked, but which make economic sense. For example, for over two years I drove by a boarded-up gas station located near MacDill Air Force Base in Tampa until one day it dawned on me that this could be an ideal location for a quick oil change and lube shop. I did my market research and found out that the closest oil change shop was 10 miles from the base. And having been in the military, I knew that a lot of service members like to sneak off base during duty hours to run quick errands. To make a long story short, I bought a six-month option for 5,000 and then sent out a detailed property fact sheet, with supporting documentation, to national and regional quick oil change chains. Four months later, I ended up reselling my option to the largest outfit in...
Now, I've just told you the truth about tenants. Most pay the rent and quietly go about their own life without bothering you. A few will give you trouble. Should the fact that in the course of owning income-producing property you may have to evict a tenant every now and then stop you from using real estate as a wealth-building vehicle No.
As I mention elsewhere in this book, any speaker will tell you that most top producing agents get 75 of their income from listings sold and 25 from buyers. That's the reason you should spend 75 of your energy building your inventory and 25 of it with buyers. 3. With listings, you are in control of your career. He or she who
Risk The concept of risk is easily underestimated, especially by real estate investors. There is a tendency to dismiss risk on the argument that it is easy to make money on real estate. However, a number of risks should be kept in mind. These include the all-important cash flow risk as well as less obvious risks a slow market in which market value does not rise or even falls catastrophic loss due to disasters not covered by insurance policies (including volcanic eruption, or earthquake, for example) the disastrous experience of having a tenant who does not pay rent and who refuses to vacate, and perhaps even one who destroys the property and of course, the risk of a softening rental unit market. All of these risks should Marketability is also affected by obsolescence, the expense of outdated utilities, poor insulation, bad plumbing and electrical systems, or in a general sense the need for repairs that exceed the equity in the property. This last form of problem, one in which the...
TIP Recommendation No 3 Do the homework it takes to fully understand where the market is going not just where it is at
Is your view of the future too far ahead of the curve My rule is to take my time and be patient. There's no need for excessive urgency at this point in the process. If there's room for one person to make money in an area, then there's room for more. In fact, I've found there are very few properties that are so special that if you miss them, you miss the deal of the century or even the decade. While those properties do exist, their owners know it and they typically overprice the properties anyway, negating the value of the deal. A good example is the Esplanade and Biltmore Fashion Park, both within the same city block in the highly sought after Camelback Corridor in Phoenix. Those properties are the types that are bought by huge institutions who want trophy properties where the look and the location are more critical than the solidity of the real estate and the return. For example, General Electric bought Hayden Ferry Lakeside in a prestigious area of Tempe, Arizona. MetLife bought the...
Sellers who are committed to selling but want to do it on their own. They usually want to do it on their own to save the commission or because they had a bad experience. With this type of seller, what should you focus on You should focus on having them buy into the value of the real estate industry, meaning that they will sell their house for more money and more quickly by using the services of an agent. Now, if they buy into that and you're the one communicating the message, they will obviously buy into you.
The key to consistently making money with this strategy and every other option strategy that I have outlined in this book is to be able to think outside your own local real estate market. I say this because in my professional opinion, the number one reason that most vacant commercial and industrial properties usually remain vacant for long periods of time is simply that no one in that particular real
Technology company that no one has ever heard of with millions in venture capital money and a burn rate of a million dollars per month with one customer and no profits. I also consider the tenant's position within their industry, the level of competition, and where the industry is going.
Most importantly, realize that neither market value nor past appreciation rates forecast the future. You do not make money when you buy a property that's about to fall in value even if you buy it at a bargain price. You can make great returns even if you pay full market value if you have identified a property (or location) that's about to take off.
Individual Secondary Mortgage Lending Individuals can assume debt positions (lending money) as well as equity (owning property). These positions can involve significant risk as well. Granting individual second mortgages to property owners creates an income stream and higher than average interest rates. However, if and when such second mortgages are defaulted, the lender is entitled to get their principal returned only after the first mortgage has been paid. In cases where owners overborrow, second mortgage investors could be left with losses. The way to reduce risk is through careful screening and selection of borrowers with plenty of equity in their homes. Some companies specialize in placing money in second mortgages, notably through self-directed retirement plans or financial planning programs.
TIP Recommendation No 10 Phase 3 and Phase 4 are not the times to buy They are the times to research and target
While it is helpful to know that real estate is cyclical and in all cases interconnected by asset class, knowing where you are in a market cycle and predicting where it is going is key. Savvy investors can make money anywhere in the cycle, but it takes great skill and experience to make money on the right side of the line.
Never forget that insurance companies have an economic incentive not to cover you. As is clearly obvious, the less they pay out in claims, the more money they make. Also never forget that insurance agents receive a commission on all the policies they sell. So when an insurance agent says that all you need is insurance instead of asset protection, please remember where his incentive lies. It is also important to acknowledge that insurance agents are not licensed to give legal advice. You would have to question the motives of one who would do so.
But it's worth it In this example, I've been talking as if there were only one duplex. But in reality there were three duplexes. And out of this one transaction the buyer pulled not ten thousand dollars but thirty thousand dollars in cash And let's not forget the fifteen-thousand dollars equity in each duplex. All told, he earned more money than most folks earn in several years working at jobs they can't stand. Sure, it's hard. But the rewards are incredible How many transactions like this do you need to find in a year to reach your goals
From all our experience and research, four key models stand out as foundations for a highly successful real estate sales business. Following these models should put you on the surest and quickest path to great real estate sales achievement. Our discussion of these four models will be divided into the two sides illustrated in the figures we saw earlier. First, as an overview, we will briefly explore the key areas of each model. Then we will analyze in much greater detail the key issues and numbers of each model as they specifically relate to the goals of the Millionaire Real Estate Agent. We'll walk the surface of the models to get familiar with them and then dive deep to reach the understanding you'll need to apply these models at a high level.
Unfortunately, the building had a very troubled past with many building operators. At one time, Ferdinand Marcos, the infamous president of the Philippines owned it, and during his tenure the building was run into the ground. Eventually, it went into foreclosure and was sold to a member of the Resnick family who had loads of real estate experience, but who still couldn't make it work. He let it go into foreclosure and the holder of the mortgage took it back. Then it went to Kinson Group out of Hong Kong. They put millions of dollars into it, but they also failed dismally. Nobody seemed able to come up with a plan that could transform 40 Wall Street from a loser to a winner. While the Kinson group poured millions of dollars into the property, they also forced most tenants out of the building, leaving it almost vacant, except for a law firm that occupied seven floors on a long-term lease. Kinson left the building with virtually no services and in terrible shape, and to make matters...
Looking back now, you can see that my forecast proved correct. Between 1995 and 2005, upscale property prices in California did hit record highs. Although South Central prices too, continued to climb, you would have made far more money had you invested in Beverley Hills.
I want you to get a feel for the dialogue associated with each objection. So, in the pages that follow, I will role-play various objections that you may encounter and offer strategic replies to each. These 22 powerful techniques will definitely put more money in your pocket in the coming months. Darryl Yeah. But this is really important for you to understand. If I thought this would work in your best interest, I would say let's do it. After all, it would make me more money too, right But as your coach, I say it's not in your best interests. Let me explain why. If we want 150K for the house, I'd rather that we ask 150K and say, We're staying firm, rather than put it up at a higher price and then come down. Why Because the higher we price the house the fewer the buyers that will come through the doors. Does that make sense
It's time to learn how to use your brain, not your bank account, to take control of a property and make money from it without ever actually buying it. Options are a smart and simple way to control property especially high-priced real estate with little or no cash. Options can generate lump sum profits, longer-term cash flow, or both it's all in how you structure the deal. It's not difficult, but it does require planning and attention to detail.
If you plan to buy into property development that is governed by a property owners' association, check out the associations laws, services, fees, financial reserves, and fiscal solvency in the same way that you would check out a local government. Some property owner associations have failed to put aside enough money to fund repairs and improvements. Owners will suffer costly assessments. (See my book, Make Money with Condominiums and Townhouses, Wiley 2003).
Money always flows to great opportunities. If you don't have money, your motto should be, 'If I don't have it, somebody does.' Whatever you need, you can always find a partner to fill it. If you don't have cash, somebody does. If you don't have the credit or financial statement, somebody does. You provide the opportunity. Let someone else provide the financial strength. You be the idea person let someone else be the money person. Nora, which is more important, the financial strength or the opportunity The idea or the money to fund the idea The cash or the deal A strong financial statement. It may sound crazy but it's true. You've already read about my challenge with the Los Angeles Times to buy a property in seventy-two hours with only one hundred dollars in my pocket. When that reporter took away my wallet, he bankrupted me He took away my financial resources everything the world thinks is wealth my cash, my credit, my cash flow, my financial statement But did he leave me with...
The lease option can be an excellent tool for profiting on rehab properties. Many junker properties can be bought cheap, but this requires cash. If you obtain a bank loan, you will be required to put more money down, especially if the property is in serious disrepair. Furthermore, you need cash to fix up the property. You also have to pay monthly interest payments while waiting for your subcontractors to finish the job and for the new buyer to qualify for his loan.
Offer less than the appraised value of the property. Why Because a lender may offer to lend you money based on the appraised value of the property. You then automatically have more money than you need to buy the property. This will be money in your fist MIF Money-in-Fist
With a sandwich lease option, you put yourself in the middle between the property owner and the tenant, and you make money without ever actually owning the property. Here's how it works You find a motivated owner willing to lease option a house to you for a small consideration or, if possible, no option consideration. Make your lease agreement for a period of two years make sure it permits subleasing and requires the owner to pay for any necessary repairs within the first 90 days. Then you lease option the property to a tenant. Get a nonrefundable option consideration of 3 to 5 percent and charge slightly above-market rent (certainly more than you're paying the owner). Your tenant should be responsible for repairs and maintenance.
You need to think about the price range of homes in which you want to invest. Obviously since appreciation is one of the ways you make money with Purchase Option Investing, the more expensive the homes, the more money you will probably make on each deal. What you want to do is find the neighborhood with the price range of homes you would like to invest in using Purchase Option techniques. You should focus on homes that are in the middle to upper-middle portion of the spectrum of homes available in your area. These homes offer the best profit opportunity with the least amount of work. The Purchase Option system however, can be applied to any priced home you want.
I have been involved in acquiring income producing real estate for approximately one year. I have acquired over one million dollars of property with zero cash down, and have pulled a considerable amount of cash from the transactions. I work part time as a freelance advertising consultant and my wife is a university professor. I have a management
One of the most popular ways to make money in real estate is to buy distressed properties, fix them up, and then either sell or rent them. The advantage is that those properties can usually be purchased below market value. The challenge is that you need cash for the down payment, fix-up costs, and interest on the loan until you complete the repairs and can rent or sell the house.
In Chapter 5, I told you how to use the lease and option strategy to profit from single-family houses. Now, I tell you how to use the LASH strategy to profit from long-term, flat-rate master leases and real estate options. LASH is an acronym that I have coined for lease and sublease higher. The LASH strategy involves making money through the use of master leases, subleases, or sandwich leases and real estate options. The LASH strategy was used on the Empire State Building in New York City from 1961 to 2002. During this time, the National Historic Landmark was operated under a master lease. The World Trade Center was operated under a 99-year master lease before it was destroyed in the infamous terrorist attack of September 11, 2001. However, before you go adding LASH to your repertoire of real estate option strategies, you first need to know
Cash Flow for Market-Rate Housing The feasibility study for development of market-rate housing is often aimed at satisfying lender's questions. The lender must be convinced that the developer will be able to sell homes at an adequate profit to cover the mortgage obligation at the very least. A cushion of profits ensures that the development will be feasible, given the possibility that additional costs will arise beyond the known, estimated cost levels. When a developer runs out of money before completion, this presents a special problem for the lender. Refusing to loan more funds means that less will be recovered however, giving the developer more money when the initial estimates were inaccurate could present even greater risks. So cash flow analysis for market-rate development has to include a demonstrated market demand, experience on the part of the developer in successfully completing similar projects, and the timing of completion that will ensure repayment of the construction loan...
When you are buying a building, whether it is a modest single-family home or an apartment complex with hundreds of units, you are making investing a lot of money. Your investment takes on added importance when you stop to consider that you are also investing money to make more money, expecting that the property will generate rental income or appreciate in value.
Before going into the process of profiting from foreclosures, let's clear up the most common misperception about them You can't make money in foreclosures because there's too much competition. That's simply not true. Are other investors out there buying foreclosures Of course. Will some of them get a deal you wanted Probably. Will you get deals they wanted Definitely. Don't worry about competition from other investors it means the business is strong and will keep you on your toes. One of the biggest competitors you'll have in foreclosures is not other investors it's bankruptcy. When people in financial trouble decide to give up and walk away from their problems, you can't help them. But if you can get to them before they reach that point, you may be able to help them salvage their credit, find a place to live, and get their life back in order. And in the process you'll make money that's what makes this a great business to be in.
You should never be as concerned with how much money you're actually spending as you are with the results you get by spending it. At some point in your career, it will take the careful spending of money to make money, so over time be prepared to invest money back into your business to build it. It is not the spending of money that is the problem. The problem is holding Don Zeleznak Millionaire Real Estate Agent Scottsdale, AZ Sales Volume 77 million
Litigation lawyers make a lot more money by representing you in litigation than they do in helping you avoid it. Some do not have enough work and may have a financial self interest in prolonging your dispute, or even aggravating it. Some lawyers also are just enamored with the litigation process and get carried away with protecting your position to the point they lose sight of the real objective, which is resolving the dispute for you as quickly and cheaply as possible. You do not want these unbalanced lawyers representing you. You want lawyers helping you who have the experience and good judgment to strike the right balance between protecting your interests and resolving your dispute.
By detailing various negatives in the preceding discussion, I do not imply that you can't make money working with property owners facing foreclosure. You can. But only if you strictly prequalify the homeowners and the property. Before moving forward toward a workout, check its potential by answering the following eight questions
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