Exposing The True Secrets Of Real Estate Investing

Real Estate Investing Success

Real Estate Investing Success is a learning material created to teach you all you need to know about real estate investing. The product, which comes in the format of CDs and PDF covers everything including how to start creating an active-passive income from real estate, how to avoid and eliminate mistakes of typical startup entrepreneurs, and a step-by-step process for starting a profitable business. With many people out there struggling with stagnant income and debt issues, this material can come in handy to help you with your financial problems. Real Estate Investing Success will help you achieve financial freedom and a break from the unhelpful tutorials on the internet that just feels your mind with the information you never apply. This book will help you stop worrying about not having enough money and start increasing your income through real estate. More here...

Real Estate Investing Success Summary


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Real Estate Investing Success

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Real Estate Options What They Are How They Work and Why You Should Use Them

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.

Learning about Real Estate Options

When I first got interested in using real estate options in 1985, there were no publications available like this book. The scant amount of information that I was about to scrounge up about real estate options told me just enough to be dangerous, but not enough so that I really knew what I was doing. This lack of solid information meant that I did not have the luxury of learning from someone else's mistakes. I had no choice but to go it alone. So, how did I become my own real estate option expert I did it the old-fashioned way. I went out on my own and learned the hard way how real estate options really work. I did a lot of research, talked to a lot of knowledgeable people, and asked a lot of questions. Then, I went out and bought some real estate options and made the inevitable mistakes, which I learned from. And while all of this was going on, I took copious notes to keep track of my trials, tribulations, numerous mistakes, and firsthand experiences as a real estate option investor....

What You Need to Know about Real Estate Options

Real estate options are a little known and seldom used investment strategy probably because the only time that most people ever read or hear anything about real estate options is when they are bandied about, willy-nilly, on real estate web site message boards or discussed at real estate investment club meetings by people whose collective knowledge of the subject would not fill a thimble. However, when fully understood, properly prepared, and used correctly, real estate options are an excellent way to conserve capital, create leverage, reduce risks, and gain control of properties with immediate resale profit potential. But, to avoid the potential problems and pitfalls that plague most uninformed and unsuspecting real estate option investors, you first need to know 5. The legal status of real estate options in your state.

Does Investing In Real Estate Still Make Sense

High rent multiples. Falling cap rates. Negative cash flows. Government rules piled higher and deeper. Persistent talk of real estate bubbles. If you're beginning to question the wisdom of investing in real estate, you're not alone. Open any business newspaper or financial magazine. You're bound to see dire predictions about the end of real estate. Six to eight percent That's hardly the kind of return that will build wealth and help you achieve financial freedom. That's hardly the size of return necessary to fund a comfortable retirement (assuming that you want to retire prior to age 75 to 80). The fact is that in recent years, investors have pushed up property prices thus lowering relative cash flows because they are learning this undebatable truth Historically, real estate investors have dramatically out-earned their fellow investors who have tried to accumulate wealth, income, and financial security via stocks. (As You can choose to invest in net-leased commercial...

New Way of Investing in Real Estate

Welcome to a new way of investing in real estate. This book will teach you how to create multiple streams of income buying homes in nice areas with nothing down. You won't need thousands of dollars and perfect credit to do it either. You can start where you are and with what you have and in 90 days or less you can be on the road to wealth.

The Legal Status of Real Estate Options Varies from State to State

Unfortunately, there's no Uniform Commercial Code equivalent for real estate options. The legal status of real estate options varies from state to state. In most states, the legal status of real estate options has evolved over the years from a combination of common and case law. The case law that regulates estate options in most states is the result of various lawsuits involving legal disputes between optionees and optionors over the use of real estate options. To know the legal status of real estate options in your state, you should consult with a board-certified real estate attorney who is familiar with how real estate options work in your state. I suggest that you ask your real estate attorney the following four questions In some states, most notably California, courts have ruled that real estate options are personal property rather than real property. For example, in a federal bankruptcy case, In re Merten, 164 B.R. 641 (Bankr. S.D. Cal. 1994), the court ruled that under...

Why You Should Add Real Estate Options to Your Repertoire of Strategies

Typically, many real estate options are bought more on speculation than on anything else. However, buying real estate options on speculation is not what this book is about. If you follow the advice contained in this book, all you should be doing is changing your name from buyer to real estate optionee. When used properly on the right types of undervalued properties, real estate options provide an excellent low-cost, low-risk, high-profit potential property control technique, which knowledgeable, savvy investors should add to their repertoire of real estate investment strategies. The real estate option strategies outlined in this book are based on a very simple concept

Savvy Investors Can Use Real Estate Options to Provide Justin Time Property

Last, one of the things that I like most about real estate options is that I can use them to provide just-in-time (JIT) property. Just-in-time inventory management refers to the practice of ordering an inventory of parts or raw materials on an as-needed basis, versus maintaining a large on-hand inventory. The automotive industry in the United States has used JIT inventory management for over a decade. Today, savvy real estate investors can apply the same JIT inventory management principles when using real estate options. All they need to do is to find a particular type of property that is in demand in their local real estate market and then use a real estate option to gain control of a piece of property that fits the bill. Then they flip the option to an end user or buyer who has a need for the property.

The Most Profitable Types of Properties to Buy Real Estate Options On

I ou need to know right from the get-go that, as a real estate option investor, you are not going to have option property deals served up to you on a silver platter by eager sellers and real estate brokers. In this business, the most profitable option deals are usually the ones that investors create from scratch by identifying an unfulfilled need in their local real estate market and putting a property under option, which best fills the need, and then reselling the option to a buyer, who has a use for the property. And unlike conventional real estate transactions, which usually involve properties that have been heavily advertised over a period of time, the most profitable types of properties to buy options on are not generally advertised as being for sale. Instead, they are bought through what is known in the real estate trade as an unsolicited offer to purchase. The best types of option properties are not for sale or listed with real estate brokers because they are vacant and in a...

Understanding the Mindset of FSBOs and Expireds

FSBOs First, let's take a look at why a person would be a For-Sale-by-Owner. The person doesn't know any better. He or she is an FSBO simply because he or she doesn't understand the value that an agent brings to the table. Usually, FSBO are motivated by one or more of three factors But first, I want to make sure I nail a point down with you. We went through the mindset of FSBOs and expireds. What is the number-one key that you need to focus on in both scenarios It is to find out what they are committed to. To demonstrate this point, I always call FSBOs and expireds during class in The Power Program getting them on the phone right in front of the class. And, two out of three times, I get an appointment. Sellers put themselves in a box. FSBOs have convinced themselves that they can save money by selling on their own, that they will have more flexibility, or that they can do a better job than an agent. Expireds are upset with agents or they feel rejected. In either case, we are just...

Real Estate Options Are Not for Dummies

As I alluded to in the introduction to this chapter, real estate options are definitely not for dummies. To make it as a profitable option investor, you need to possess an imaginative, analytical, and creative mind. First, you must have the imagination to be able to visualize various types of properties being put to a myriad of different uses. And then you must be able to put an option deal together from scratch that makes financial sense to all of the parties involved in the transaction. Finally, you must be creative enough to package the property for maximum resale value and market it to a targeted group of prospective buyers who are willing to pay your asking price. Granted, this is not rocket science, but you will not get very far as an option investor if you have no imagination, cannot solve problems, and have zero creativity. Nowadays, too many people fall into the trap of mistaking education for brains. I know of a certain Harvard Business School graduate who flaunts his MBA...

Maintain a Separate Checking Account for Your Real Estate Investment Business

For record keeping and tax purposes, you must maintain a separate checking account for your real estate investment business that you can deposit checks into and pay expenses out of. One of the criteria that the IRS uses to determine whether a business is legitimate and not a sham is bank accounts. A business that claims expenses, losses, and depreciation on federal tax returns but does not maintain a bank checking account is going to be suspect and have a very hard time trying to document expenses if ever questioned or audited by the swell folks at the IRS. And the best method for documenting and recording expenses is to pay them with checks written on your real estate investment business checking account or with a credit card issued in the name of your real estate business. This way, you will not have to worry about confusing personal expenses with business expenses. Plus, working out of one checking account will allow you to easily track expenses on a daily basis. The same holds...

Millionaire Real Estate Agent

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.

Why You Must Be Able to Think Outside Your Local Real Estate Market

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 estate market has been able to come up with a profitable use for the property. And I attribute this to a general lack of vision, creativity, and foresight on the part of most so-called real estate professionals. The fact of the matter is that many of the people involved in real estate today are afflicted with a bad case of tunnel vision, which prevents them from seeing beyond the borders of their own local real estate market. And for whatever reason, they have not been able to apply the marketing concept of buy locally but sell nationally and globally to their real estate investment...

The Second Goal Category of the Millionaire Real Estate Agent Listings

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.

Three Reasons to Work Expired and FSBO Listings

Any new agent with aspirations to climb all the way to the top tier of success in residential real estate should consider working expired and FSBO listings for three good reasons i They're easy to find. You don't even have to ask the owners if they're considering selling. All you have to do is notice the For Sale By Owner ads or signs or scan the MLS files for property listings that expired without buyer offers. It's hardly rocket science. i They exist in any kind of market condition. You read that correctly. If you're skilled at converting expired and FSBO listings, market conditions will have little bearing on your income and overall success. Here's why In a market that is experiencing sluggish sales, buyers are in control and listings move slowly, if at all. As a result, a large number of listings expire each day, week, month, and year, providing you with a near-endless supply of conversion opportunities. On the flip side, when the marketplace is robust and listings are moving...

Entering the For SaleByOwner World

Converting FSBO listings involves a process that in a number of ways is similar to working with expired listings. However, the key differences between the two areas are i Timing. Most expired listings are re-listed and back on the market within a matter of days while FSBOs convert at a much slower pace. If you contact the owners of a FSBO, you can usually expect them to take at least a few additional weeks to try and sell on their own before they commit the listing to you. i Sales approach. When working to convert an expired listing, you need to take control in order to prevail over a bunch of other unknown agents who are vying for the same listing. The owners of the expired listing rarely have an agent preference at this point. Their first-choice agent was the one whose sign just came down. This isn't always the case with FSBO owners, who sometimes have an agent in the wings just in case they don't have success on their own. For this reason, you need to take a lower-key approach and...

Finding FSBO listings

Because FSBO owners want to be found, you don't have to look far. Just do the following i Check the newspaper. Because one of the primary advertising avenues for FSBO owners is still print media, the newspaper is a great place to look for FSBOs. The serious ones advertise regularly, spending a couple hundred dollars a week on classified ads to promote their home. Most don't realize how fast the expense will mount up. They start out with an advertising blitz for the first few weeks and then scale back as the reality of the expense they're incurring becomes apparent. You can use their ad volume to gain information and to track sale progress. i Drive around. Some owners quit advertising after a few weeks, and others never start. But they all put signs in their yards. So that you don't miss out on any FSBOs, drive through your geographic area and area of business at least once a month. i Enlist the help of family and friends. Ask family members and friends to be on the lookout for FSBOs....

Converting FSBO listings The successful agents approach

Plan to take a patient approach to FSBOs. Realize that you can't do or say anything short of offering to give your services away that will rush the owners' decision to abandon the idea of selling their own home. Basically, you're playing a waiting game that you can't win in a hurry, but that you can quickly lose if you're pushy or confrontational. NG Agents who are filled with hyperbole about themselves and their service, or who try to tell owners that FSBOs fail to sell themselves, use the wrong tactic. Owners don't want overly-confident agents making them feel like idiots for trying to sell on their own even if they are

How to Develop Money Making Relationships With Real Estate Agents

Many investors make the costly mistake of considering real estate agents as competitors. They incorrectly see themselves out in the market competing for a limited number of deals fighting it out with local agents and brokers to make money. This costs investors time, and it costs them thousands of dollars from lost deals. The truth is that as an investor, one of the most profitable relationships you can ever develop is with a real estate agent. Think about it for a moment. As an investor, your market is motivated sellers who don't need all cash at closing (and who are willing to be flexible on the terms of sale) or who are willing to deeply discount the price of their properties for an immediate sale. instead, refer those sellers you cannot help to your real estate agent ally. He will be able to turn these sellers into a steady stream of commissions as he lists, then sells their homes. Remember that most agents spend tremendous amounts of time and money to find the very people you turn...

Real Estate Agent Models

Now that we've introduced and covered the four models high real estate sales achievement is built upon, let's take a close look at them from the Millionaire Real Estate Agent's point of view. Let's now study the issues and numbers of becoming a millionaire in real estate sales. One of our discoveries while working with and interviewing Millionaire Real Estate Agents was that the transition between Earn a Above all you'll be focused on generating leads. I like to say lead generation comes first, last, and always. The difference between the Millionaire Real Estate Agent and an average real estate agent is that the millionaire never drops the ball on lead generation. It doesn't matter whether his computer crashed or his assistant quit, he systematically pursues leads and, when finished, then turns his attention to the problems of the day. He knows that if he allows himself to be distracted from his core job, he'll always be lagging behind and exposing himself to the vagaries of shifting...

Always Be on the Lookout for Vacant Properties

Finally, in addition to using all five of the property search methods that I have outlined in this chapter, always be on the lookout for vacant properties while driving around town. How do you go about spotting vacant properties with profit potential It is really not that hard to do once you know exactly what to look for. Probably the easiest and quickest way is to simply look for properties exhibiting any of the following telltale signs of blatant neglect. Look for properties that have A sample letter to vacant property owners is shown on page 94. FORM 9.2 Sample Letter to Vacant Property Owners

Real estate investment trusts

Real Estate Investment Trusts (REITs) are trusts, owned by shareholders who can exchange their shares on the open market. REITs provide a means by which relatively small investors can participate in large-scale real estate investments. REITs are very heavily invested directly in real estate. REITs are conduits for investment income only. They are organized under state law as unincorporated associations managed by trustees. They are creatures of federal tax law which permits their distributions to shareholders to be nontaxable to the trust, so long as certain requirements are met. They provide a means by which relatively small investors can participate in large-scale real estate investments.

How to Locate the Owners of Vacant Properties

You should be able to locate the owner of a vacant property by looking up the street address on your county's real property tax roll. The tax roll will have the name of the owner of record along with the post office mailing address where the property tax bill is sent. However, sometimes the address listed on the tax roll is incorrect. When this happens, go to the following sources in the county and state of the property owner's last known address, and check the

Real Estate Agent Budget Model

While your monthly budget is your power tool for tracking and evaluating the investments you make in your company, the Budget Model of the Millionaire Real Estate Agent (Figure 40) is a more high-level look at your spending. What it does is highlight those areas where your focus and attention will pay the highest dividends. The Millionaire Real Estate Agent's Budget Model is divided into two broad categories cost of sales and operating expenses. Now, to be the most effective you can be and get the most out of these investments, you should be able to explain why every budget item is there, why it is a certain amount, and exactly what you expect to receive from it. With that in mind, let's break these two categories into their relevant parts and get a better understanding of them.

Resources for Business Owners and Real Estate Investors

When you think about it, it makes sense. Successful real estate investors increase the value of their holdings and get distressed properties back on the tax rolls to generate income for municipalities. Successful business owners create jobs, and the people who fill those jobs pay taxes and contribute to the overall economy. Clearly, the government has a vested interest in the success of your real estate business, and that's why there are literally thousands of local, state, and national government programs that will help you make money.

Buy Real Estate Options at Prices 5 Percent or Less of the Propertys Value

To gain maximum leverage when using real estate options and to avoid having all of your working capital tied up in real estate option fees, I recommend that you never pay more than 5 percent of a property's current market value for a real estate option. For example, on a property with a current market value of 250,000, you should never pay more than 12,500 for a one-year real estate option. In fact, I probably would not offer more than 10,000 for a one-year option on a property worth 250,000. And to reiterate what I told you at the beginning of this chapter, the amount that you wind up paying for a real estate option usually depends more on your skills as a negotiator than on the actual value of the property you are buying the option on. Depending on the condition of the property and the owner's circumstances, I usually start the price for a real estate option at 5,000 and increase it in 500 increments until I buy the option or cease negotiations.

Free Training for Real Estate Investors

For those of you who have just finished this book it might seem like I had it easy when I got started investing in real estate, but I didn't. That's why when the American Real Estate Investors Association (AREIA) asked me to sponsor this year's membership drive, I was thrilled. The American Real Estate Investors Association (AREIA) is a nationwide group of real estate investors who have joined together to help each other be more successful investors.

Why Most Title Insurers Consider Real Estate Options to Be Risky

Please keep in mind that title insurers, by the very nature of their business, are rather skittish when it comes to what they will insure. And to most title insurers, insuring real estate options is perceived as being risky business. Title insurers generally consider straight or naked real estate options, which are not contained in lease-options, to be more risky than so-called ordinary real estate instruments. Why the greater perceived risk with real estate options There are many reasons. For example, all title insurers fear that an increase in the value of a property under option could cause an optionor to refuse to transfer the property's title after the real estate option has been exercised. In a nutshell, title insurers are leery about being held responsible for the potential cost involved to legally force an optionor to transfer the title to the property under option. Title insurers are also fearful that the title to a property under option may be owned by an individual who...

Capital For Real Estate Investments

Real estate investments are financed through a combination of debt and equity capital. The use of debt, or borrowed money, is very important in real estate, and a substantial majority of the new capital flowing into real estate is normally in this form. By year-end 1987, U.S. properties were supporting about 2.75 trillion in mortgage debt. The balance of the property value, of course, represents the owner's equity capital.

What if Im Already A Member of a Local Real Estate Investment Group

Most of our members are also members of their local investor group. Let's face it, there is something powerful about being involved with your local investor group. If you are fortunate enough to be in an area with a local real estate investment group, I urge you to visit the meetings and consider joining.

Look for and Buy FSBO Properties

FSBO For Sale By Owner properties offer many opportunities to you to get built-in financing. Why can FSBO properties be your path to wealth Because FSBO sellers are often Independent thinkers who believe they can do everything themselves, including arranging financing with someone they like. So if you work on getting the FSBO person to like you, you'll probably get a dream deal.

How to Clean Up and Secure a Vacant Property under Option

First things first Always start cleaning a vacant property from the front sidewalk and work your way to the rear property line. You should always start your cleanup from the front sidewalk to enhance the property's curb appeal and make it more visible and enticing to prospective buyers passing by. Here is a sequential listing of how you should clean up and secure a vacant property

Investing in Real Estate

Understanding the government's relationship with investing Finding out how to analyze a real estate investment Mf eal estate long has been considered one of the best ways to build wealth. Real estate W w agents often are asked by buyers to locate properties for investment. Likewise sellers frequently use the services of real estate agents to sell investment properties. A real estate agent who provides services to people who are buying and selling investment properties needs to be knowledgeable about different types of investment properties, various ways you can make money by investing in real estate, and some of the tax issues that affect real estate as an investment. Although they don't expect you to become an investment analyst or financial advisor, state exam writers do expect you to know the basics of real estate investing. They expect you not only to know how to provide appropriate service to your buyers and sellers but also to know when to call in experts because something is...

Back to Basics Getting Started with Property Investment

Many people think that real estate investments must be made in large and complicated properties, and that just isn't necessarily true. Real estate investors often start small with residential properties close to home. I'll briefly discuss different types of properties, management issues, particular advantages and disadvantages, and getting help with your client's investments. With the exception of the list of investment properties, you can expect some state exam questions on all the material in this section. Location is an important factor in selecting any type of real estate, including investment properties. All other things being equal, location is the principal factor affecting the value of a property. But location plays another role when selecting an investment property. I once heard a piece of real estate investment advice that I'll pass on to you and you may want to pass on to your clients When you buy a piece of investment property (or when you help someone select a piece of...

Oh no Some notsogood news about investing in real estate

Investing in real estate is a great idea for several reasons Over time real estate values tend to at least keep pace with inflation if not exceed it properties often generate annual returns (income) on the investment and investors can take advantage of tax benefits that may not be available in other investments. However, investing in real estate also has a few disadvantages. Here are three of them Despite what the no-money-down gurus say, real estate investments usually require a substantial amount of cash for a down payment and money in reserve should you end up with too much vacant space or too many vacant apartments. These investments usually require some level of management and involvement in property management decisions too. Real estate investments don't always turn out to be profitable. Downturns in the economy, overbuilding, changes in tax laws, and unexpected property repairs all can have a negative effect on a property's financial return, so real estate investing can be a...

Partnering Up Real Estate Investment Organization Structures

People invest in real estate as individuals or sometimes together with another person or several other people. Different organizational structures are used to accomplish different investment goals. Does it surprise you to find out that you also can invest in real estate without actually owning property or having ownership responsibilities You don't have to become an expert in this area, but in this section I talk about each of these types of ownership and investment situations in enough detail to enable you to distinguish one form from the other, which is what state exam writers expect of you.

Real estate investment syndicates

A real estate investment syndicate is an ownership structure in which a number of people join together to invest in a single project or property. The term syndicate or syndication is more a descriptive than it is a legal term or an actual form of ownership. The actual legal structure of the syndicate also can take a number of different forms, such as a corporation, a limited liability corporation, and general and limited partnerships, and it can be private or public. You can find out more about these forms of ownership in Chapter 7. The key thing to remember about syndicates is that a syndicate is created to invest in one piece of property. Two forms of syndicates used for real estate investments are general and limited partnerships. The principal difference between the two forms is the extent of management control and liability.

Were in the Money Making Money by Investing in Real Estate

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.

Resell Your Real Estate Options for Maximum Profit

Throughout the course of this book, I have given you detailed, step-by-step instructions on how to use real estate options to control undervalued properties with immediate resale profit potential. In this business, you make your profit upfront when you buy low-cost options on properties that are priced well below market value. But you do not get paid until you turn around and resell the option for a profit. And getting paid is what this chapter is all about It should not take a rocket scientist to understand that there is a direct correlation between how well a property is marketed and how fast an option sells. If you do not get anything else from this chapter, please get this Market the property, not the real estate option. Never lose sight of the fact that what you are really selling is not the real estate option agreement itself, but rather the property under option. The fact is, I have never advertised a real estate option per se instead, I have always advertised the property...

The Eighth Goal Category of the Millionaire Real Estate Agent Personal Education

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. Keeping goal categories is one of the areas that changed my life as a businessperson. Back in 1979, I attended a Lewis R. Timberlake seminar on goal setting. Timberlake advocated using goal categories, and before long I was scratching out notes on what should be the core goal categories for a highly successful real estate agent. These categories were originally tried and tested by none other than myself. Now, over the course of my career, they have withstood my personal scrutiny as well as the original doubts and skepticism of thousands of real estate agents who have consulted with me. While goal categories are...

The Hiring Path of the Millionaire Real Estate Agent

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,...

How Income from the Sale of Real Estate Options is Treated for Tax Purposes

Income earned from the sale of real estate options is taxed at the same rate as ordinary earned income. And for tax purposes, the IRS will consider you to be a real estate dealer versus an investor because you are buying options with the intent to resell and not as an investment. Real estate options are covered in Section 1234 of the Internal Revenue Code, which is provided for your convenience

Do You Need Money To Buy Real Estate

Yes, you will need money to buy real estate. The question is whether it needs to be your money. That's where financing comes into play. In general, though, you'll need to either provide money for a down payment, have time to design a creative real estate financing deal, or have excellent credit scores that will make a lender feel secure. If you don't have great credit and you don't have time to develop a creative real estate investment, then you will need to find money. But, it might be easier than you think

Winning Business from Expired and FSBO Listings

Converting expired listings into new listings for your business Securing for-sale-by-owner, or FSBO, listings Staying targeted, competitive, and resilient f you've been in the real estate business for any time at all, you've probably already sensed that many agents have a preconceived negative impression of expired listings and for-sale-by-owner listings, or FSBOs. These agents act as if these listings represent second-hand goods that aren't worthy of their interests and abilities. These same agents may also look down on fellow agents who work expired or FSBO listings. As a result, they turn their backs on tremendous revenue potential and literally thousands of annual listings. And that's great news for agents like you who can reap great success by converting expired and FSBO listings to new listings for your business. I honestly believe that agents who work, or have worked, expired and FSBO listings with successful outcomes are the best salespeople in the real estate industry. They...

Real Estate Agents

If classified advertisements and real estate magazines give you a huge pool of properties to consider and the occasional phenomenal bargain from publicly available sources, then real estate agents offer you an ongoing stream of good recommendations that are not always out in the open yet. A real estate agent worth his salt will know what you are looking for, and not waste your time with properties that you would turn down in a hurry. That brings us to the question of how you should go about choosing a real estate agent. Two Work with agents who are themselves investors. I know that sounds counterproductive, on the basis that if the agent were to stumble across a bargain, he or she is hardly likely to offer it to you. On the face of it that is true, but there is a limit to how many properties agents will buy (they have this constant dilemma between selling properties to earn a commission and buying them for the long haul). Most important, real estate agents who are themselves investors...

Introduction A Note from Robert Kiyosaki

First, there will always be a real estate market. In a civilized world, a roof over your head is as essential as food, clothing, energy, and water. Real estate investors are essential to keeping this vital human need available at a reasonable price. In countries where investing in real estate is limited or excessively controlled by the government, such as it was in former Communist Bloc countries, people suffer, and real estate deteriorates. Second, there are many different ways a person can participate and prosper with real estate. For most people, their only real estate investment is where they live. Their home is their biggest investment. During the real estate boom from 2000 to 2007, many amateurs got involved with flipping houses buying low and hoping to sell higher. As you know, many flippers flopped and lost everything. In true investor vocabulary, flipping is known as speculating or trading. Some people call it gambling. While flipping is one method of investing, there are...

Conventions Used in This Book

1 Throughout this book, I use the term real estate agent rather than Realtor unless I'm talking specifically about members of the National Association of Realtors (NAR). Realtor is a registered trademark owned by the NAR, which requires that the term appear either in all capital letters or with an initial capital R. For your information, all Realtors are real estate agents, but only those real estate agents who are members of and subscribe to the Association's strict code of ethics are Realtors. 1 The word agency describes the relationship that a real estate agent has with members of the public, or as they're sometimes called, clients. When clients list a home for sale, they enter a contractual relationship with the agent who will represent their interests. That agreement is called an agency relationship. Every state and province has a unique set of laws stipulating how consumers and real estate agents work in an agency relationship. These agency laws have been reworked and clarified...

Business Pmnciple No 2 Team

The best team members almost always come as a referral from someone you trust. But make sure the person referring is also a real estate investor and is knowledgeable about your situation and needs. A trusted advisor, such as an attorney, accountant, mentor or wealth coach, can be a good source of referrals. Before we leave the concept of a team, let me give you my personal experience with developing a real estate team. Anyone who knows me realizes that I spend most of my day growing my business. This doesn't leave me much time for real estate investing. But I love real estate investing and understand completely the importance of it in my wealth strategy. I estimate the time I spend each week on real estate to be no more than one hour. Yet, I make in excess of 100,000 per month through my real estate investing, all because I have developed a great team and applied the other business principles we are talking about in this chapter. This brings me to our next principle...

Discovering the Skills of a Successful Agent

Understanding the role and importance of a professional real estate agent Knowing the importance of customer creation and sales skills Choosing the right path to real estate success You're already on the road to real estate success, demonstrated by the fact that you've picked up this book to discover what it takes to become a great agent. This first chapter sets you on your way to success by providing an overview of the key skills that successful real estate agents pursue and possess.

Real Estate Attorneys View of Assembling and Managing Your Team

In 2003, Kim and I used Chuck to finalize one of our biggest real estate investments. It was a zero-down deal that would put more than 30,000 a month net income in our pockets. If not for Chuck, this deal could have been our biggest nightmare. He found irregularities that most people, including most lawyers, would have missed. On top of that, after the deal was closed, Chuck offered to give us a discount on some of his firm's legal fees since he felt his firm did not work as effectively as it could have. Needless to say, we told him to bill us in full and keep the money. He had more than earned it.

Avoiding the role of a home inventory access provider

Back in the days of the early 1990s, before the advances of the Internet, the consumer's only avenue to information about homes for sale was through a real estate agent. Every other week, agents received phonebook-sized periodicals presenting information on properties for sale, with each new entry accompanied by a small, grainy, black and white picture.

Sizing Up the Differences between Residential and Commercial Agents

When I decided to become a real estate agent in 1990, I didn't even consider residential real estate sales as a career path. I wanted to wear the nice suits, drive the fancy cars, and meet over power lunches with those who made the business world turn. I wanted to sell and lease commercial real estate.

Comparing commercial and residential real estate Its apples to oranges

1 Representing residential real estate investors who are looking to increase wealth through the ownership of homes, duplexes, triplexes, and fourplexes. Small-scale multiplexes are handled by residential rather than commercial agents for the following two reasons Commercial real estate agents are usually familiar with many of the commercial real estate areas, but they generally specialize in one of the following areas or disciplines

Exchange Intermediary

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. So what do you look for in a qualified intermediary Exchangors must feel confident that exchange funds will be safe and available for the successful conclusion of their exchange. It is best to hire a qualified intermediary that, first, comes highly recommended by other real estate investors. You should also do your own due diligence to determine how the intermediary is investing funds it has on hand. Recently, a large intermediary was unable to fulfill its funding obligations because it had invested the bulk...

The Way to Exotic Wealth

Wayne is really an alchemist, taking different disciplines such law, taxes, marketing, and design and transforming them into exceptional real estate investments. In other words, it is not the building or the raw land that is the investment. It is the ability to create value out of the elements and forces that surround real estate that gives Wayne his advantage. The beauty and power of real estate investing is found in the scope of creativity each property affords the investor. Whenever I am at a dead end, brain dead, and in need of a shot of creativity, Wayne is the person I call.

Collecting marketplace information from key sources

The most challenging aspect of gaining market knowledge is determining what facts to collect and where to find the information you need. Fortunately, a number of readily accessible resources are available to real estate agents. All you have to do is contact the right people and ask the right questions. The following sections help you on your data quest. Before I became a real estate agent, in my early twenties, I was a racquetball professional. I played hundreds of tournaments over my sports career, and always my best games were at my home club. There, we had a court with floor-to-ceiling glass on the right side and back wall, making it particularly difficult to see in the back right-hand corner where the two walls of glass converged.

Profits from the Ground Up

There are three primary reasons why our investments with Ross do so well. The first reason is that he is a builder. He understands the ins and outs of the construction industry. Second, he is a property manager. This is important because the key to long-term investing in real estate is professional property management. And third, Ross is exceptional at finance by managing the ratios between debt, equity, and expenses. When it comes to real estate investing, he is the complete package. On top of that, he is a great guy. He is fair and honest. Perhaps you've already read and maybe even re-read Rich Dad Poor Dad by Robert Kiyosaki, as well as my partner Ken McElroy's book, The Advanced Guide to Real Estate Investing, and now you are ready to take the plunge and invest in real estate on your own. That's probably why you bought this book written by real estate professionals, each of whom have been earning their livings in real estate for decades. For me, development from the ground up is...

Prospecting for listings

Listing leads come from past clients, those in your sphere of influence, expired listings, FSBO conversions, open houses, lead cultivation, and door knocking, but they rarely come without some effort, and here's why The tendency when people send you referrals is to send you prospective buyers. The public's perception is that real estate agents sell houses by putting people in their cars and driving them around to look for a home to buy. 1 Gather up expired and FSBO listings. To achieve a greater listing inventory and develop a specialty as a listing agent, cultivate listing prospects by working with expired and FSBO listings (flip to Chapter 7 for the full rundown on how to excel in this area).

Master Your Universe Get the Lay of the Land

Commercial real estate is very different from residential real estate. Craig Coppola is recognized as one of the best commercial real estate brokers in the United States. That is why he is my partner in commercial real estate investments, and we have done extremely well financially. When Kim and I began our transition from residential to commercial real estate, the first thing we had to do was let go of a residential real estate investor's mindset. We had to see real estate investing through a different set of eyes. If not for Craig's experience, Kim and I might have lost a lot of money paying for our commercial real estate education. Craig is great because he is a tremendous teacher and takes the time to explain what we fail to see. That included mastering our universe and knowing the lay of the land. What teams were we going to be up against What were their strengths and their weaknesses How could we exploit those weaknesses and overcome their strengths What do we do in a...

TIP Recommendation No 3 Do the homework it takes to fully understand where the market is going not just where it is at

Happened to many real estate investors. The town of Fountain Hills, Arizona, was started by a real estate speculator in the 1970s. He built the world's highest fountain, which is powered by jet engines and shoots a huge plume of water 560 feet into the air. His goal was to attract curious people to the new community that at the time was out in the middle of nowhere. People came and marveled at the fountain, but not enough bought real estate. It took decades for the real estate in Fountain Hills to really take off. Today it is a thriving community, but it took almost thirty years for that to happen.

Commercial Asset Class Options

One of the most important decisions you as a real estate investor will have to make is in which area of the business you want to specialize. If reading this book tells you anything, it should tell you that there are a lot of ways to make and lose money in the world of real estate. Even within the commercial real estate sector, there are a number of different asset class options. You'll soon discover that they are each quite specialized with plenty of their own nuances and requirements. I believe it's important to see the commercial real estate sector in its entirety so that you get an accurate picture of how it is all interconnected because, even though the different asset classes are unique, they all do work together to create an environment within an area of a city or town. Here are the asset classes complete with descriptions and the risks and the rewards.

The Last WorD on Mastect

Well, now you know how critical the lay of the land in terms of neighborhood, asset class, and the real estate cycle is to the success of your real estate investment career. But just like in baseball, there's a huge gap between knowing how to hit a home run and hitting a home run. That gap, of course, is technique, practice, and unfortunately, failure. Becoming master of your real estate universe will take all of those, too. It did for me. I've lived in Phoenix for more than twenty years, and I still drive around the market with real estate eyes. Things are always changing, and I need to keep up with those changes. I develop new systems to make me more efficient as I analyze properties and deals. And I'm not ashamed to say on my first deal I lost 15,000 and didn't even end up with the property It never closed. These kinds of things happen to everyone, and they are what separate the serious investors from the novices.

Rule No 1 Insurance Is Never a Complete Asset Protection Strategy

At Rich Dad events around the country I am always confronted by the person who asserts that his insurance agent has assured him that asset protection is a hoax and that all that is needed is a good insurance policy. I have to laugh because there are so many instances of insurance companies failing to cover real estate investors and others on their coverage policies, that there is a whole area of law named after the situation. It is called Bad Faith Litigation, as in the bad faith that occurs when insurance companies say they will cover you, collect your premiums, and then, heaven forbid, a claim arises and they find reasons not to cover you.

Helping people send you the type of referrals you seek

I Your interest in helping people sell their homes. The standard consumer view of real estate agents is that they put people into their cars, drive them around, and sell them houses. If you don't expand this initial impression, most of your referrals will be for people seeking to buy rather than sell homes. Buyers are great clients and important sources of revenue, but the best agents build their businesses through listings. By cultivating referrals for those clients thinking about selling their homes, you'll put your business on a faster track to growth.

Rule No 2 The Two Most Common Ways of Taking Title to Your Real Estate Do Not Provide Asset Protection

The problem for real estate investors is twofold. First, joint tenancies offer no asset protection. Suppose Peter, Paul, and Coco own a sixplex as joint tenants. If Paul gets sued, his creditor can reach Paul's joint tenancy interest. Peter and Coco now have a new partner in the sixplex, most likely someone, who after suing their friend and barging their way in, they don't like right off the bat. As well, this new partner can bring a partition lawsuit to force a sale of the property. It can get expensive in legal fees and messy in court.

Treating expired listings as highprobability leads

Working probable leads is much more efficient for a real estate agent, and it's difficult to find a more probable lead than the owner of a home with an expired listing. The owner has demonstrated the desire or need to sell and shows the existence of a problem you can help solve. The problem, of course, is that after waiting out the entire listing period, the owner's home didn't sell. However, the problem, in most owners' eyes, is that the previous agent didn't perform well. In more than 90 percent of the cases, though, the real reason the home didn't sell is because it was overpriced. More than half of the time, these homes go right back on the market with a different agent why not you

Or Beware of promoters telling you otherwise

Jane calculated that fifteen people had signed up for all this and figured the promoter must have cleared a total of 150,000 at the one asset protection event. She was furious and sickened by what had happened. She vowed never to invest in real estate. I tried to counsel her but could not. She had gone through a horrible experience and was adamant that her decision was final.

Organizing your plan of attack

Confine your efforts to a concise geographic area that allows you to stop by the FSBOs and see the owners as regularly as once every two weeks. When it comes time for them to convert to an agent listing, they'll find it harder to reject you or choose not to interview you if they've met you and know you personally. If you work a large geographic area and are unable to whittle it down to a more concise area, expect to encounter a great many FSBOs. The easiest way to organize the opportunities is to track each home by the owners' phone numbers. Owners will change their ads and their asking prices, but they'll rarely change their phone numbers, and so by filing each home under its phone number you'll eliminate the risk of duplications. I kept a lead sheet for each FSBO prospect and attached clippings of all ads the owner had run. Whenever possible, I called the sellers and talked with them about their ads, making suggestions about how they could improve effectiveness. Then I'd watch for...

Targeting your prospects

In targeting FSBOs for conversion, use the following selection criteria i Owners who don't have a best friend or relative that is a real estate agent The best approach to target FSBOs for conversion is to create a Top 10, Top 20, or even Top 30 list. If you try to work much beyond 30 FSBOs, excellent service becomes a very difficult proposition. If you pursue the best 30 FSBOs, knowing that 80 percent or 24 of the 30 are likely to list in the next 60 days, then you have 24 solid prospects, or about 12 a month.

Making the initial contact

Making initial contact with owners of FSBO homes is the toughest step for most agents, so I recommend that you make calls as soon as you see a FSBO come onto the market. I've had coaching clients who would buy the Sunday paper on Saturday afternoon just to get the FSBO classifieds. By doing this, they could call owners of new listings to have a professional conversation before the onslaught of calls from other agents began to come through. Another benefit to calling FSBO owners early on Saturday or Sunday is that you leave your afternoons free to drop in on some FSBO open houses. Meeting owners face to face in their own homes presents an effective way to establish contact. The owners are sure to be home, they're expecting visitors, and they're ready to make contact and discuss the sale of their home. Due to the four-to-five week sales cycle involved in converting FSBOs to listings, you can use mailers more effectively with them than you can when dealing with expired listings. By...

Of Marbles and Capital

This book is called The Real Book of Real Estate because the people I chose to be a part of it are real-life real estate investors. They are not people who just teach real estate and make their money teaching. Wayne like the others who I asked to be part of this book, makes his money doing what he teaches. He is one of the best real estate investors and one of the best finance guys I know. He is, like all of the advisors in this book, doing his own deals while teaching others how to be rich using the same methods and formulas he uses himself. I am always leery of people who give advice and say, Trust me. Then they don't do what they are telling me to do. Those are not the kind of teachers I want around me. And they are not the kind of teachers who are in this book. This book is real people and reallife real estate strategies that they use to build wealth.

Overcoming rejection and staying resilient

FSBO sellers will reject you because they would prefer not to use your services. But if you maintain a steady, professional relationship, offering help and staying in contact for four to five weeks, you'll usually be able to win an interview. From there, if you have excellent presentation skills, a listing follows. 1 Limit the number of FSBOs you cultivate. Focus only on the best The reason that agents who pursue expired listings and FSBOs are so effective in securing listings is because most agents either don't attempt to compete or, if they do, they compete on a haphazard basis, usually quitting long before the sale is made. If prospects always said yes, real estate agents wouldn't be salespeople. Instead they would be called order takers. They would just take someone's order, confirm its accuracy, and fulfill it as if they're working the counter at the local McDonald's, with no selling involved. Beyond that, if prospects always said yes, our income or payment for services would...

Building relationships

FSBO relationships are built over time. By introducing yourself to the owners the first weekend their FSBO is announced, before the masses start calling on Monday, you create a good connection. By sending them tools, educational materials, free reports, and forms, you become an ally. By taking a personal interest in them and their situation, you create a solid connection that, in many cases, pays off when the owners decide to go with an agent they know and trust preferably you. Over the course of building a relationship with the owners, you'll be able to get them to understand that in every real estate transaction a commission is paid. In the end, FSBO sellers don't save the commission. Rather, they try to earn the commission by doing an agent's job. In doing so, they spend a great deal of their money and time to perform, as best they can, the duties of an agent. Those duties include exposing the home through marketing, presenting the home to buyers, building a sense of buyer urgency...

Why Host an Open House

Open houses aren't the best vehicles for selling homes. So why do real estate agents bother with them For the following reason Open houses are a great means for prospecting. An open house provides a real estate agent with a neighborhood store front from which to do business for a day. Each time you host an open house, you set up shop in a client home and open the doors to the opportunity to meet prospects, establish relationships, and expand your real estate clientele. Think of the open house as the real estate agent's equivalent to the retailer's loss leader, which is something that creates the initial opening for a sale. In the same way that a grocery store manager offers milk at a discounted price to draw shoppers into the store, a real estate agent invests time and money in an open house to build traffic, attract prospects, hand out business cards, and cultivate sales of other products. When I was selling real estate, I wasn't a big fan of open houses. I wanted to keep Fridays,...

A chance to meet potential clients face to face

The explosion of online real estate marketing and shopping has led to a dramatic drop in the number of phone-to-phone and face-to-face meetings between real estate agents and their prospects. The open house provides a proven way to gain clear and easy real-time access to prospects that are ready to buy or sell homes.

A means of catering to the doityourselfers homebuying needs

1 They aggressively shop the swelled ranks of homes for sale by owner, which are also known as FSBOs. Real estate agents always seek a magic formula that defines how many open houses to host and when to host them. I hate to disappoint you, but I haven't found a pat answer. However, here are a few good guidelines to follow

A hightouch opportunity in a hightech world

One of the big challenges facing real estate agents in today's wired world is learning the identities of their prospective clients. Home shoppers cruise and click their way around hundreds of real estate Web sites, requesting information via e-mail from scores of agents without ever revealing more than an e-mail address.

Wallflower or social butterfly Meeting and greeting during the open house

Successful buyer interviews conclude with a prospect commitment, which takes the form of a signed buyer-agency agreement. This agreement is a contract to exclusively represent the buyer. At its core, the buyer-agency agreement is like a listing agreement where your compensation is guaranteed if the buyer buys. If the buyer buys any home (one that is listed and on the MLS or that is an FSBO) you'll be compensated for your time, effort, and energy. The single best way to obtain a buyer interview is to convince the prospect when you're face to face at the open house that you're the best real estate resource based on

Qualifying Your Prospects

Many salespeople, especially in real estate sales, think they'll offend the customer if they ask questions. Here's an analogy that should put your mind at ease Imagine you're sick and you schedule a doctor's appointment. You arrive, the doctor enters the examining room, and you look up and say, Guess what sickness I have today From across the room, the doctor is supposed assess your symptoms, diagnose your ailment, and prescribe a cure without checking your ears and throat, listening to your lungs and heart, and, most importantly, asking you questions about what's wrong and about how you feel. It sounds ridiculous, but it's what real estate agents do when they try to serve clients without first asking questions to qualify their wants, needs, and expectations.

Dealing with Sales Objections

Sales objections are part of selling. For most people in sales, objections present an immovable object in the road to your success. Real estate agents often freeze when presented with a sales objection. They don't know what to do or say in the face of this perceived danger.

Its All About Adding Value

I once accused Curtis of going where white men fear to tread. He laughed out loud and said, That's true. He went on to say, I have basketball star Magic Johnson's philosophy of going into urban areas and bringing in development and businesses that lift the area up. Curtis then added, Regardless of race, too many investors just suck the cash out of a neighborhood but never reinvest to improve it. I invest to reinvest and improve a neighborhood. This is why Curtis and his wife, Diana, are respected friends as well as fellow real estate investors. As a successful real estate agent, investor, and developer, I've shared a stage as a presenter with Robert Kiyosaki, who is a personal mentor to me. His ideas and guidance have been instrumental in much of my success. I have presented seminars with Donald Trump, as well as coauthored with him an audio CD entitled Three Master Secrets of Real Estate Success. At this writing, my wife and I are renovating a multimillion-dollar home in an exclusive...

Finding the Right Properties

Now we've come to the exciting part, right Right Finding the right properties to invest in is obviously at the heart of long-term and sustained guaranteed success in real estate investing. It's the area that will tap all of your knowledge and creativity, and where over time you'll build experience and expertise. You'll come to rely on this time and time again. Finding the right properties is equal parts knowledge and your ability to creatively see a property's potential. In short, here's where we marry your brain with your intuition to achieve a complete solution (wholeness). If you are just starting out investing in real estate, I suggest that you begin by purchasing a two-or four-unit property. This way, you can begin small, leverage your way into a property, learn all you can, and then move up to a larger property when you have experience and a positive cash flow.

Property Criteria and Analysis

TIP Cash-on-Cash Return defined This is the amount of cash you receive from a property investment in a specified time period as a percentage of your initial investment in that property. TIP Gross Rent Multiplier is the ratio of the price of a real estate investment to its annual rental income. The lower the ratio, the better. S.W.O.T. stands for Strengths, Weaknesses, Opportunities, and Threats. A common business evaluation tool, S.W.O.T. also applies to investment real estate simply because each property will have its own unique strengths, weaknesses, opportunities, and threats. The savvy real estate investor the one seeking guaranteed success will put each property through a detailed S.W.O.T. analysis.

Real Estate Due Diligence

Today Scott is one of the three mortgage bankers I call when I need the straight story about real estate financing. It was Scott who, years ago, warned me of the real estate bubble being formed by the sub-prime mortgage fiasco. It was because of Scott that my wife, Kim, and I became more conservative in our real estate investments while others became real estate gamblers. When you as a real estate investor have identified a property that you want to purchase, you have come to the conclusion to buy it based on a series of somewhat superficial facts. You have usually seen the property, and generally have reviewed some of the financial information that the seller or broker has provided you. And based on this information and your belief that the property fits your business plan, you make an offer to purchase. Once the seller has accepted your offer, your work or should I say your team's work has just begun

Third Party Reports Review

Depending on how sophisticated a real estate investor you are, you may not think you need an appraisal. My advice is almost always to get one. If you are financing your project, you will need one anyway, and why not be sure that the property is valued where you believe it to be It validates your own assessments, or in some cases refutes them. Either way, the knowledge is good to have.

Accounting and Tax Review

One of the great benefits of being in the mortgage brokerage business is that I get to see amazing real estate projects and have the privilege of helping very creative entrepreneurs put those real estate projects together. I have learned much more from their good practices and bad decisions than I ever did in school or in my own real estate investment career.

Counseling Clients on Home Improvements

I First and foremost, never counsel before you're hired. Counseling happens after a client-relationship is established. Attorneys don't offer legal advice before their services have been officially retained. Doctors don't diagnose without assurance of compensation. Real estate agents should follow suit. Wait until the listing agreement is signed. After it's signed, begin giving counsel regarding how the owner can achieve a quicker sale or higher price by making recommended home improvements and implementing staging advice.

Real Life Story Its All About Experience

Recently my real estate agent, Joanne Callaway, related a staging success story to me. She had been trying for months to sell a seemingly marketable home. The only problem area was the dining room. It had one red wall to match the homeowners' linens. I was surprised that this was the problem area as I often paint dining rooms red. Nevertheless, Joanne called upon the services of her favorite stager who immediately had the wall painted, changed the linens, added cushions to the dining chairs, and the house sold in one week

What stuff to keep and what to remove

The point in showing a home is to allow prospective buyers to mentally move in and assess how well the home fits with their lives and possessions. Real estate agents know to listen and watch for buying signals, and one of the clearest and best signs is when buyers discuss how their own belongings may fit in various rooms.

Being Born with a Silver Paint Brush in Hand

That all changed when my father, Douglas McPherson, who was a successful real estate investor and owner of a prominent commercial real estate brokerage firm, sat me down and said, Look, you think you know a lot about real estate, but it has only been from textbooks with no practical experience. If you really want to get in the business, you need to step up and buy something My father and I went to lunch, and he proceeded to tell me what a great deal this was. He pointed out that the properties were below replacement costs, and were in good rental neighborhoods. My problem was I could see these homes only as places for me to live and not as a real estate investment The other benefit of this deal was that the seller would carry her own paper or mortgage back because of the property's condition. I had no idea what this meant at that time, but I quickly learned that it was the key to becoming a real estate investor. I bought the property for 15,000 with 1,000 down, and the seller carried...

Three Basic Steps to Understanding and Obtaining Financing

In my business, it is a pleasure to come to work and see very creative real estate transactions and hear the sponsor's or developer's vision. I can tell in the first fifteen minutes of our discussions if this person is really someone we can finance and is truly a real estate investor. I have a policy that we promote internally in my office that if we (being the mortgage broker) are steering or making too many of the decisions for the borrowers, it is time to rethink their abilities.

Real Life Story Two Properties The Financing Was Not Created Equal

You need to ask yourself how much risk you are willing to take. Ask some tough questions of your personal finances and lifestyle. If you are a financially capable, sophisticated real estate investor then leverage and debt can be your best friend. If you are not in that category, be honest with yourself and borrow less or spread your equity risk by bringing in a partner. TIP One of the strongest traits that I see in my business is that successful real estate investors know their risk tolerance levels.

Develop Multiple Exit Strategies

When I look at any real estate investment, I always start by asking how am I going to get out of the deal. You may have the greatest idea in the world for buying, building, or converting something, but with no clear way to get your capital along with a lender's capital back, you will never attract anyone to the deal TIP When I look at any real estate investment, I always start by asking how am I going to get out of the deal.

How Do I Obtain Access to These Lenders

If you are an experienced real estate investor, you may have some access to these types of lenders already. Unfortunately, if you are not on top of these lenders on a daily basis they may be out of the market when you need them. Financing for real estate investors is really a blending of using good common sense and surrounding yourself with the best talent possible. I started with one

Lease It and Keep It Leased

Craig has a lot of designations after his name, but I don't need them to know that he knows what he's talking about when it comes to commercial real estate investing, leasing, and brokering. His track record and his guidance speak loud enough. He has shown us that commercial real estate takes a different set of eyes than the ones we have as investors in multifamily residential properties. Whenever Kim and I see a commercial building that we think looks interesting, we call Craig. No they won't On both counts. As much as you may like to think that everyone will be as excited about your real estate investment as you are, this simply is not the case. In most markets, there are several buildings for rent and lots of choices for business owners regardless of whether they are looking for a Class A high-rise for their 500 per hour law firm partners, or a master carpenter looking for multiuse workshop space to create custom furnishings, and everything in between. Choices abound, as they say.

An Outsiders Perspective

Just like you, I didn't begin my career as a successful real estate investor. I have people like Robert and the Rich Dad team to thank for opening my eyes more fully to the immense wealth-building potential that real estate investing affords. Well before I began investing in real estate, I made my living by managing other people's assets. In the process, I've built some of the largest and most well-known property management companies in the southwestern United States. John's first problem was that his group purchased a large multifamily building with very little research, which is commonly called due diligence, and they had little knowledge of the local real estate market since they were based in Colorado.

Ways to Learn More

The ABC's of Real Estate Investing, by Ken McElroy The Advanced Guide to Real Estate Investing, by Ken McElroy How to Increase the Income from your Real Estate Investments (audio book), by 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.

Getting from A to B Without Paying Taxes

Today the average person is paying more than 50 percent on income taxes and hidden taxes. One of the beauties of real estate investing, when compared with investing in stocks and mutual funds, is the ability to pay nothing in taxes, legally. As far as I know, this real estate loophole is the biggest and best legal tax loophole remaining, and that is why Gary Gorman is my friend and advisor. Gary has both saved and made Kim and me a lot of money.

Investors Are Always Interested in Real Estate

People seem to have no problem putting money into the stock market. However, it can be risky and difficult to figure out exactly what to invest in. For example, when you buy a piece of rental property, you can reasonably anticipate what the future rents and expenses will be. But if you buy a stock, the value of the stock could drop in half almost overnight, and its dividend could be totally eliminated Real estate, by contrast, is a much safer investment. Moreover, you will find that investing in real estate becomes easier and easier as you acquire more properties. In fact, once your friends and acquaintances see how you're amassing properties, they'll often ask if they can get in on your next deal. When investors don't have the time, but do have the cash, they will frequently loan money to you at a good rate of return, or perhaps even agree to share in a portion of the profit upon resale of the property.

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Discover the Jealously Guarded Insights of Real Estate Tycoons and Hot Dealers! Back in the days of the wild, Wild West, when easterners traveled across this vast country looking for opportunity in the newly opened territories, they were often referred to as a ‘tenderfoot’.

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