There are several skills that need to be acquired in order to become a successful real estate investor, one of which is funding your real estate investments. This is a skill that needs to be learned early on. It should be practiced and perfected, so you can take advantage of any opportunity that comes your way. Real estate education is more than books and videos; some skills must be learned with a hands-on approach in order to develop and perfect them.

Learn By Doing While learning through book instruction is needed to learn the basics, locating funds is a skill better learned by doing it. There is an art to finding money; contacting people, and asking them to work with you. Many real estate investors fail because they do not have the skill set to locate money, and while they may be able to find every bargain under the sun, if they don’t have the financing to back them up, these bargains are useless to them. Locating Funds The first place to start is the obvious -- local banks, as many locally owned banks have programs for real estate investors. You will need to contact several banks and mortgage companies to inquire about their terms for investors. If you are turned down, move on to the next one. This may be discouraging in the beginning, but persistence will prevail in the end.

Are You Ready For A Loan? Before you even start applying for loans, you have to make sure that you have all of your ducks in a row. Check your credit score and make sure that there are no hidden surprises. When you apply, make certain that you have filled out the paperwork correctly and you have all the necessary documents in order. Sometimes the reason for being rejected is not your credit score, but incorrect document preparation.

Other Loan Sources When banks say no for whatever reason, you have to be creative and start thinking outside the box. Consider other possibilities such as bank lines of credit, owner financing, investor loans, Subject To, Hard Money, etc. Your goal should be to invest without spending your own money. Even if you get a loan from a financial institution that doesn’t cover the entire cost of your deal, don’t let that stop you, look for other sources to make up the difference.

They say practice makes perfect and once you start practicing, you will become an expert in finding funds for your projects. Your real estate education is a never ending process. The rules of the game change all the time and you have to be prepared to change with them if you want success in the real estate business. Money is always available, even now during these tough economic times; you just have to know where it is and how to get it.

Dominick Corey / www.CherryPickReos.com / Cherry Pick Reo's

Viewing infomercials on real estate can be quite exciting; seeing how individuals claim to have made millions in real estate; starting out with no money down, bad credit, no credit, and no experience. It makes you want to pick up the phone and order right away. Before you do, hold on a minute. The truth is, watching an infomercial is not real estate education and should not be seen as educational at all.

Those claiming to have secret formulas or insider information are simply attempting to entice you into buying their products. In fact, most information can be found by visiting your local courthouse or reading the daily newspaper. There are no secrets in real estate investing -- you find property, you purchase it and resell it, rent it, or hold onto it.

The real secret is finding the RIGHT property in the RIGHT location, at the RIGHT price. This information does not come from watching a television show, but from experience. While real estate classes can help you learn the basics, learning hands-on is truly the only way that you can learn real estate from the inside out.

It is essential that you start out learning the basics from a reliable source. This can be through schooling, a mentor/coach, online classes, or real estate agencies who offer training. If you participate in any type of accredited classes, they will tell you that the chances of finding a $300,000 home that you could purchase for $3,000 is simply not out there. Opportunities like this do not exist and if they did, people wouldn't be talking about it, they would be out there investing in them instead of trying to sell $500 information packets on HDTV.

Where Do You Begin to Learn Real Estate?
When it comes to learning the business of real estate, you have many options -- local and online classes are held frequently. Real estate mentors take on students and teach them from the ground up. The amount of education you require depends on what you need to pass the real estate licensing exam. If you have no knowledge, of course, you will need more instruction than someone who has worked in the field, or has more knowledge of how the real estate business works.

If you are an outgoing person who likes to talk and participate in discussions, local classes or online classes with Mastermind groups might be better for you. If you haven't come out of your social shell yet, online classes may be the way to go for you.

Regardless of how you choose to learn real estate, don't waste your money on get rich quick schemes -- they simply don't work no matter how inviting they may appear. You can be successful in the real estate market, but it takes time and work to achieve your goals. There is no magic CD or training course -- there are no insider secrets or undiscovered resources. It's all about knowing what to buy and when to buy it and you can't get that from an hour long infomercial.
__________________
Dominick Corey / Cherry Pick Reo's

Why group real estate investing? History has proven again and again that the people who thrive are the ones who work together. Have you ever considered the power of working together to invest in a group?

If you haven’t, I’m going to enlighten you as to a number of reasons why you should consider investing in a group, and explain a few of the many benefits of group investing.

Often, the kinds of deals that provide the BEST dollar-for-dollar return in real estate are multi-million dollar deals…so how does the average investor get some of that money? Without shouldering the huge debt service themselves? Well, it’s often possible when you invest with a group in real estate. Just watch out for these 8 key factors before you invest with a real estate group.

Group real estate investing can maximize financial leverage.

What do I mean by this?

Think about what happens when you put ten percent down, or $30,000 cash, on a single family house and you receive a loan for ninety percent of the purchase price of $300,000…in effect you just leveraged your money TEN times to control an asset worth (if you bought right that is) MORE than TEN times the money you used to control it.

That $270,000 loan, the other ninety percent of the money used to own the property, was OPM— or “other people’s money”. Maybe you got it from a bank, or a mortgage lender, maybe even from a private lender, or even the seller of the property itself gave you that loan as seller financing that you used to finance ninety percent of the purchase price.

Doesn’t matter, because no matter where the money came from you didn’t need to have the entire purchase price to get control of the property (and enjoy the benefits of investing and real estate ownership)…did you?

Regardless, it’s nice to own a small house with a value of more than 10 times what you had to invest cash in order to get that ownership.

And for most people, they feel comfortable being on the line for that 90% of the purchase price in the form of the debt against the property. After all, it’s considered “normal” to owe on a house, and a $270,000 mortgage doesn’t even buy close to as much of a house as it did 10 years ago in many places of the country. (though it buys more than it did 10 years ago in a few areas)

Besides, they think that since real estate goes up in value over time the fact that they’re personally guaranteeing the loan of $270,000 isn’t a huge concern for many people.

But what if you could do that on steroids?

What if you could gain ownership in a $3 million property or a $30 million property?

If the purchase price percentage  numbers were the same, would you want to personally guarantee a loan for 10 times that— or $2.7 Million? What about $27 Million?

What if you could you raise a down payment for these deals (just say we’re assuming the same 10% we used earlier)?

For many people, those last two loan examples are out of their comfort zone. Especially when you think of “personally guaranteeing” the loan.

Even if they had or could raise the amount of money required to control the property, even if it was a sweet deal worth twice the purchase price and it was controlled for a cash investment just a FRACTION of the value-- that idea of being on the hook for that amount of money in financing to do the deal just wouldn’t sit well with them.

It wouldn’t matter WHAT the property was worth, or how much more than $27 Million it was worth, signing on the dotted line for $27 Million is just not something they’d be comfortable doing.

And yet many of these million dollar deals—especially as it applies to commercial real estate, such as the deals my company looks to acquire for long-term buy and hold wealth building purposes-- are the kinds of deals that provide the BEST dollar-for-dollar returns…

So how does the average investor get some of that money?

Without shouldering the huge debt service themselves?

Well, it’s often possible when you invest in a group in real estate.

For example, you can leverage the resources of other people, other investors—not just banks and mortgage companies. This can be a major plus because now it is not you alone who is responsible for the entire purchase price or perhaps, not even be on the line for the debt attached to the purchase.

Investing in a group can give you access to investments that might be so large in scale as to be out of reach for you alone.  

Many millionaire fortunes have been built by investing with groups— not only in real estate.

But let’s stick to real estate for the purposes of this article. Group real estate investing, especially, has proven over time to be very lucrative.

There’s a lot of information you need before deciding to pursue investing with a group in real estate…whether you’re looking to invest with a group that’s already investing or whether you intend to start your own investing group— in which case the scope of this article is much, much too small to adequately prepare you either legally or logistically, but will point you in the right direction.

Here are some simple tips that will guide you in your decision-making before you invest with a real estate group or begin one of your own:

1. Know the entity/business structure the investing group uses, and make sure it’s conducive to a group

2. Transparency is key- financials should be disclosed to all investors in the group

3. Your money is only as protected as it says in the legal documents

4. Determine liquidity (can investors sell out, or transfer their piece of the investment?) before investing

5. Be aware of investing government regulations (especially SEC)

6. Learn the right questions to ask

7. Hire the right experts, professionals, and advisors— attorneys, accountants, managers

8. Don’t invest in a group unless you are comfortable with the risk/reward ratio

I hope these tips have empowered you to think about the benefits of investing in real estate with a group.  If so, you will have taken an important mental step into a brighter and more prosperous future.

In fact, the majority of all millionaires at one point formed an alliance with other people of the same vision to ensure their success.

Perhaps it is time you did, too?

HIS Real Estate Network is an alliance of everyday people with the vision for financial freedom. It is your complete connection to real estate experts, money making information and opportunities for financial wealth. We are a community of like minded investors focused on one goal – prosperity through real estate. Find out more now about our group of real estate investors, and the opportunities available for you to get involved today with extremely lucrative returns and very acceptable risks, right here:  http://www.hisrealestatenetwork.com

Did you ever buy a cheap real estate investing course? This makes me REALLY mad, real estate investors. I got myself all frustrated and angry today over nothing. I must have wasted a good two hours of productive time thinking about this, and I decided to see what you thought about cheap real estate investing courses.

Here’s why I’m so mad…I’m starting to see 5 dollar haircuts EVERYWHERE!

Oh wait, you don’t know what I mean by 5 dollar haircuts, do you? Well, listen to this quick story and I guarantee you’ll never forget this lesson.

Once upon a time, there was a very successful barber who had a thriving business. He was well-known and respected in his community. He was the “go to guy” to get your hair cut, and was loved by his customers because he gave top notch haircuts for only 10 dollars.

He gave extraordinary value for a fair price, and was truly giving his customers MORE than they paid for. And they kept coming back, month in and month out— sometimes for years and years.

Well, to make a long story short…one day the barber got into a disagreement with one of his customers (who happened to be a pretty rich businessman). They disagreed over what was more important— price or quality.

The customer was SO mad that he decided to open up a brand-new barbershop RIGHT NEXT DOOR and to make every attempt to put this barber out of business. He bought the storefront and some barber chairs and hired some barbers.

He put up a HUGE sign in his window that said:

“We give 5 Dollar Haircuts”

Within a few short weeks, almost all of the barber’s customers were now going to his new competitor’s place of business in order to save money. There was no way he could charge only 5 dollars per haircut and still remain in business, but he was determined not to go out of business and to continue delivering the same value his customers had loved him for.

So he came up with a plan to fight back.

He decided that he would also put a big sign in his window that would counter what his ‘competitor’ was trying to do to him.

Within a SINGLE WEEK the barber had all of his customers back, getting their haircuts from him once again.

All because of that one sign he hung in the window.

Can you guess what the sign said?

“We FIX 5 Dollar Haircuts”

My friend, here’s how that relates to us here today on our quest to become ever more successful as real estate investors.

I see all sorts of websites and seminars and workshops popping up all over the place all selling cheap garbage products that are supposed to make you a successful investor in real estate overnight.

It almost seems like anyone who has bought one of those $39 infomercial courses on television can suddenly become an expert with just a thousand bucks in their pocket by hiring a ghostwriter to put together an Ebook or some worthless rehashed junk supposedly on how to invest in real estate.

The problem with all these cheap real estate investing courses isn’t the entrepreneurial spirit…the problem is that most of these ‘products’ usually don’t have any really valuable content. And even if they do you can get it at no cost with a little time just by combing through real estate investing forums online, or going to your free public library. For the most part, it’s all just generic fluff, or worse complete nonsense.

That’s what ticks me off. This stuff in the wrong hands can be DANGEROUS. How can someone who is just getting started in the business (or not even done one deal) tell you how to make money in real estate investing? That’s right, you’re much more likely to LOSE MONEY.

If you want to get more involved in real estate investing, then you might consider that you don’t need to buy cheap real estate investing courses. What you may need is to work with and learn from experts who know what they are doing, who have proven, high-caliber systems that actually make a difference in whether or not you succeed with your investments.

I’m just wondering…how do YOU feel about all these “cookie cutter” cheapo products out there? Do you believe as I do that they have little value? Honestly, the only value I see them having is that they make the people who really DO pour themselves into their system or product…look that MUCH BETTER.

                                                                                                                         If you want to see an example of a high-quality and “turnkey” investing system and real estate investing course combined that will enable you to learn from AND invest WITH individuals like the HIS Board of Advisors who have completed over 500,000,000.00 dollars in real estate deals, one that really teaches people something worth learning, then check out one of our presentations at www.hisrealestatenetwork.com/commercial

So you want to do some real estate investing research and evaluate whether investing in a particular geographic area is a good idea or not?

Successful investors understand that the real estate investing game is one of probabilities and not certainties. Therefore, when evaluating which real estate markets are ripe for investment, and which kinds of investments will work best at that time, you need to look for certain telltale probabilities converging before you buy in an area. Use these “how to research the real estate market” resources in this article to fine-tine your search so you can make money in every real estate market cycle.

Real estate investing research is so very important. Clarity in the real estate marketplace is power. Professional investors have it. Speculators and novices are always seeking for it. It’s why professional investors who understand the real estate market cycles and know how to research real estate markets can make more money in the longer term than speculators and ‘flippers’ can make in the short term.

Gaining this clarity in the real estate marketplace is a function of examining hard data and asking objective questions of it.

What do I mean by that?

While there’s no “crystal ball” that will tell you where to buy property and when to buy, and when to sell, there ARE certain economic and social indicators we can use to trigger our decision to invest or not invest (and even HOW to invest) in a given geographic area at any given point in time in the real estate marketplace.

Together, these indicators that drive the real estate market cycles can be uncovered with good real estate investing research.

It’s a lot easier to focus your investing efforts when you can do two things, which this article will teach you how to do:

1. Invest nationwide (or even worldwide), choosing markets that make sense for the current local real estate market cycle                            

2. Easily eliminate potential markets from contention that are less attractive than others right now

Please understand that these are macroeconomic factors, independent of where you live.

So you want to evaluate whether investing in a particular geographic area is a good idea or not. Successful investors understand that the real estate investing game is one of probabilities and not certainties.

Therefore, when evaluating which real estate markets are ripe for investment, and which kinds of investments will work best at that time, you need to look for certain telltale probabilities converging before you buy in an area.

Let’s say someone tells you that City XYZ is the “next big thing”.

Would you want to take their word for it and just go and buy property there? No, you’d want to confirm what they told you, quickly and easily, by doing your own simple due diligence.

In point of fact, if you’re like me—because your time is valuable, you’d want a simple “litmus test” of how to research real estate markets and evaluate potential possibilities.

I promise you, no one is too busy for these simple tips you can use to gain a clear understanding of how the market trends work, see how to maximize your returns, find markets where the current real estate cycle fits the type and time-frame of investment you’re looking to make, and even how to avoid investing in certain areas right now.

So…What about “City XYZ”…to invest or not to invest?

What elements and probabilities do you base your decision on?

1. You look for an area of strong demographic growth
2. You look for a strong, growing, and diverse economy
3. You look for an area of growing retirement and/or first-time homebuyer population
4. You look for new and substantial infrastructure changes
5. You only move into undervalued markets
6. You look to acquire a property with strong potential for appreciation
7. You look for contracting vacancy trends

If you buy property in an area that meets these criteria, looking to invest with a longer term exit strategy in mind, are observant of where you are in the local real estate market cycles, and you always provide the rental type that renters prefer in that area…you’re set.

All of this sounds like common sense, doesn’t it?

Unfortunately, as someone once said: “common sense ain’t common”.

In a small article like this I can’t tell you where to get all the real estate investing research data you need, and nor can I explain the fundamentals of real estate market cycles (something economists are much better qualified for) but here’s a great resource you can use from now on. This is just ONE of the insider sources real estate pros use to determine market trends (and when and where to invest).

Click the link below and look for the “Housing Price Index” which will show you the most recent report by the United States Office of Fair Housing Enterprise Oversight, comparing how much and how fast your house appreciates and goes up in value, compared with houses in all the other major metro markets in the United States:

http://www.ofheo.gov

Where does your city rank?

I must tell you that while real estate investing research is INCREDIBLY important, as is an understanding of how to position your efforts investing using knowledge of the current real estate market cycle your area in question is currently in, simply taking action as an investor is the most important step in the drive to success in real estate investing.

It can also be the most difficult, because we are predisposed sometimes to want to see that all the lights are green ahead of us before we put our foot on the gas.

Of course, while knowing while that would make it that much easier to make a decision, it isn’t always that straightforward even when you understand how to research real estate markets and have a good handle on real estate investing research…this is because your own PERSONAL investment criteria, goals, and resources will determine what you can DO with what the market IS.

That’s why it’s SO key to know your own investment criteria, resources and goals.

Because if you add THAT to a fundamental understanding of the marketplace and the trends of RIGHT NOW…that is a powerful combination.

With those two pieces to the investing puzzle it’s that much easier to take a look at a deal and decide to invest. Or if the probabilities aren’t there and/or the deal doesn’t fit in with your goals, you don’t pull the trigger.

It’s that simple.

 

As the editor of a free real estate investing newsletter, it’s no wonder that I receive a lot of requests from beginning and experienced real estate investors both on where to go on the web for free information on real estate investing. While researching on the internet, visiting real estate forums, and reading articles written by experts can be a great use of your time, I’ve gotten tons of value over the years subscribing to a number of free real estate investing newsletters.

 There’s a lot of junk out there though, and it’s easy to get overwhelmed. Here’s the first key for me: finding just a couple sources that bring you solid information you can trust. Here’s the second key for me: kill the interruption addiction of email by using time-blocking and maybe even email filtering so that you read and study the emailed materials you receive only at specific times you’ve set aside.

Before you do ANYTHING ELSE, it’s important that you create a special folder to store the landslide of free information on real estate investing and real estate investing tips you’re about to receive. Open a new folder in your email program and title it: ‘!Real Estate Investing Newsletters’.

(Special tip: Make sure to put ‘!’ before the ‘R’ so it’s at the top of your folder list—where it belongs!)

This way, once all the free information on real estate investing begins to flow into your email inbox you can sort it and access it later and more importantly find it when you need to apply it! If you use Gmail or Outlook you can even set up ‘filters’ or ‘rules’ in your email program so that when messages come in from specific senders you can count on your email program accessing that message, labeling it or putting it into a folder for easy retrieval, and then archiving it out of your sight. That way, you’re not interrupted when it comes in, and can read it – and the many messages from the same sender you receive and those from similar senders you’ve tagged in your email program-- later at a time you have set aside for your studying and staying abreast of the market.

If you’re anything like the millions of people each day trying to find these answers you’ve likely searched – in frustration-- quite some time to find powerful strategies to help you and your family get to the next level financially...and I understand if you’re likely unhappy with the ‘solutions’ that you’ve discovered thus far.

If so, you’re part of a large and growing group of people who are looking for answers to very common financial challenges.

They say…

“I’m looking to retire faster, easier, and with more income…”

“I’m looking to take control of my financial future…”

“I’m looking to save money for a new home or child’s future education…”

“I’m looking to leverage my existing assets to create more passive income…”

“I’m looking to get better returns on my investments by investing in real estate…”

“I’m looking to build wealth for my family, as hands-off as possible…”

Do you, too, ask these questions of yourself?

The truth is…

 

How we spend our time directly affects our quality of living. This article I wanted to encourage you to do something extremely important: invest time to read the best free real estate investing newsletters out there.

You CAN find free information on real estate investing!

Here’s how you find the best free real estate investing newsletters to subscribe to, so that your valuable time isn’t wasted, and you can get the information you need.

Go to your favorite search engine right now and search for “free real estate investing newsletter”.

You’ll find quite a few results!

As of writing this article, there were 134,000,000 results just from www.Google.com alone.

Here’s a few tips to help you sift through a lot of the stuff that won’t help you, is too difficult, is too costly in what they recommend, or is too commercialized (i.e. they’re only trying to sell you).

Look for free real estate investing newsletters that:

1. Key in on specific techniques or areas of real estate you’re most interested in

                (i.e. commercial real estate, beginning real estate investing, foreclosure real estate investing, etc)

2. Give case studies of specific successes and how you can duplicate them (look for their archives, or their blog where archived email alerts, newsletters or lessons sent out to subscribers often end up later)

  Connect you not only with the provider of the newsletter but also other readers

                (networking is a powerful tool in real estate investing)

 4. Is produced by someone that sells something but doesn’t require you to buy it

(if you live in a capitalist system you understand that you often get the most value from something that is free when the people providing it have something they sell for you to look at in exchange)

 5. Offer differing perspectives and articles from different experts and students both

(while I’ve learned a lot from free real estate investing newsletters produced by one-man bands, there’s often a limit to what one person can teach you!)

 6. Are connected to a website with additional resources or offline resources besides the newsletter

 Once you subscribe to a few free real estate investing newsletters, you’ll find out pretty quickly which ones are for you, and which ones aren’t.

 I sincerely believe that the more you read the best free real estate investing newsletters out there, and the more you apply what you learn from this great source of free information on real estate investing, the more you’ll begin to see the answers to your financial questions and realize the accomplishment of your investment goals.

 And the more you and your family will be prepared to create the life and the lifestyle you deserve with this wonderful vehicle we call real estate investment.

Best,
Danny Welsh
Partner, Commercial Real Estate Buying Group
CMO, America's #1 Real Estate Network
http://www.RealDealCommunity.com

For every 50 who applies, 1 is chosen. Become OUR next apprentice: http://www.MMMChallenge.com

Invest Passively with our Company for Solid Returns (50K and Up, For Qualified Investors Only): http://www.hisrealestatenetwork.com

Most people are familiar with P.T. Barnum’s circus, the “Greatest Show on Earth”.  He was called the “The Greatest Showman in the History of the Universe”.  However, the fact that Barnum was one of the richest men of his time and taught success principles is not as known.  Barnum’s, “Art of Money Getting”, is chock full of very relevant insight for any time.  He gives 20 “rules” that a “money-getter” must live by in order to be successful.  Barnum begins with noting the importance of mind set in being able to define, plan for, and then accomplish what one sets out to do.

 

Barnum noted “even though it easy to make money, it is much harder to keep it”.  Simply put, to make money, expend less than you earn.  Even though you might think this simple, he says, “perhaps more cases of failure arise from mistakes on this point than almost any other.”  People only think they understand the economy and they don’t.  “Economy is not meanness”, true economy is making income exceed the outgo.  Cutting corners in a miserly way, and then splurging on the frivolous will not make one a success.

 

“Forego consumerism for consumerism sake”, stated Barnum; live more simply, consume less.  Save pennies and dollars, accumulate interest, and save for a rainy day.  If you have more month than money, he suggests a ‘cure for extravagance’.  Barnum’s exercise will help assess spending habits, necessaries/comforts versus luxuries.  Let go of the need to keep up appearances, unnecessary to prove self-worth.  Vanity and envy lead to false standards of perfection, and just keeps one poor.

 

Barnum’s premises around making money, saving, and the economy rang so true.  Taking a look at what is going on world-wide with economic issues, debt, and consumerism, it is clear that sound principles, basic truths, of living/business have oft been discarded.   

 

Good health is wealth, according to Barnum.  He called it the foundation of success, the basis of happiness.  Being aware of the laws of nature, and staying close to them is key, as is avoiding alcohol and tobacco so as not to dull the mind and get in the way of clear business decisions.

 

Don’t mistake your vocation - be clear on what you are setting out to do, and then focus.  Select the right location, look at the competition, and avoid debt, as debt will rob you of your self-respect.  Debt means that your money works against you.  “Money is in some respects like fire; it is an excellent servant but a terrible master.”

 

The “rules” that Barnum set forth are certainly worth reviewing for one’s self-inventory.  Persevere; what ever you do, do it with all your might; depend upon your own personal exertions; use the best tools; don’t get above your business (borrowed money can be suicide); let your business be one of service and excellence; learn something useful; let hope predominate, but be not too visionary; be systematic; be versed in world affairs; diversify but don’t invest in that which you don’t know, or you’ll lose.

 

Barnum also said don’t endorse without security, or you’ll lose.  I’m aware of a number of investors who have lost millions during the recent real estate downturn as they hadn’t secured their loans, a tough lesson to learn, the hard way.   

 

Advertise your business, be polite and kind to your customers, be charitable, hold your business secrets close to the vest, and preserve your integrity, were other ‘rules’ Barnum espoused.  Although this might seem to be a list of the obvious; it is obvious, that it isn’t obvious. 

 

“The inordinate love of money is the “root of all evil”.  Money, when properly used, blesses, enabling expansion of the scope of human happiness and influence.  Wealth, requires responsibly, and using it as a friend to humanity, not to hoard or be greedy. 

 

The history of getting money is the history of civilization; and, whenever there was the right use of money there has been proliferation of art, higher learning, cultural and educational institutions, and science advancements.  The money-getters are the benefactors of our race.  Today, the pendulum appears to have swung too far one way and is painfully finding its way back to Barnum’s “true economy”.

 

Barnum’s work was inspiring and affirming, providing principles for success that never change.  Personally, I’ll be keeping a list of these rules in my business plan for periodic review.  Though always striving for excellence, it is essential to make sure it is built into the business plan, while holding employees, or joint venture partners, to these standards. His call for focus and immersion were strong as well, so necessary when building a business.    

 

P.T. Barnum’s wisdom and inspiration is strong, a must read for anyone who is in business, and seeking success.  When writing, or reviewing, your business plan or manifesto for living, inculcate the “rules” that Barnum so adeptly set forth.  Use them as a benchmark for your business, and life, and see where you might have strayed or failed to put some rule into place.  I certainly plan to do so.  To our continued success!

 

 

 

 

As you are getting started in commercial real estate investing, or residential flipping, ask yourself, “Do I run a house-flipping business?  Or, is it a real estate business that flips houses?”  Are you working for tips? Let these commercial real estate investing tips help focus your approach to investing.

There are a few  key tips for you to consider as you are getting started in commercial real estate investing, or residential flipping.  Ask yourself as you begin, “Do I run a house-flipping business?”  Or, “Am I running a real estate business that flips houses?”  Do you see the difference? I can teach you how to do one deal, but what is that going to do for you? You just make one deal, right?  Let the following real estate investing tips help focus your approach to investing.   

 Create a Business with Systems:

 HIS Real Estate Network teaches creating a business that has a “system” that will generate residual income for you. That’s the difference. What I want you to start thinking about, the need for you to see residential and/or commercial real estate investing as a business. That’s what this is. You are not flipping houses; you’re in the residential and/or commercial real estate business.

 If you operate your real estate investing like a business, guess what happens? You don’t do just one deal a year or one deal a quarter; you do a lot of deals consistently. Why? You’re running it like a business. That’s the difference.

 Whether you are involved in residential flipping or commercial investing, it is important to know that you are running a business.  And, if you are focused on residential, you may want to look at the viability of adding or shifting to commercial ventures.

Determine your income needs to meet your obligations, reach financial freedom?

 Now I don’t know what your income stream is right now, if you make $4,000, $5,000, $6,000, $7,000, $8,000, $9,000, $12,000 or $20,000 a month in payments so that you can live. In other words, what amount of income do you need to come in every month so that you can pay your bills, and be free?

 If you just did a couple of deals and every month they were paying your bills, even if it was just $6,000 a month, would that be financial freedom? Financial freedom might mean you could just roll out of bed and be like well, “Today I don’t feel like working. It’s okay because my mortgage is paid, my kids have food, we’re going shopping and we’re going to Disney.” That makes a big difference.

 A residential business with solid systems can do a portion of that to a degree, which is one way to maximize the returns quickly because that’s what the vehicle is there for.  But, what we really want to do is take that money that we’re repeatedly making on the residential flips, and take a portion of that, right now, and put it to work for us long term.

Ask yourself if you are “working for tips?”

 Does anybody know why commercial is so sexy to us?  Money for trailing dollars… Passive income. Residual income. Commercial market crash. That’s definitely a door for it right?

 We used to just be residential and we had it down pat to a science. We could do a webinar and flip 20 properties in that webinar. It was good. We had the system down and I was bragging about it to some older guys who couldn’t stop laughing at me. 

I’m offended. I’m literally offended because I’m doing deals so I’m a player, and these guys are laughing at me. I asked, “Why are you laughing?” And, one said “Because you’re working for tips.” Think about that concept for just a moment. I’m working for tips. I’m making money, right? Yes, but the moment you stop working that business, guess what happens? You stop making money.

Then he said something that really hit me. “When was the last time you flipped a house and the house deal paid you every month after that?” I had no comeback for that. I just had to bow out, put my tail between my legs and say “okay”.

 Well, what happened was I saw the light.  I bought one commercial deal, I made money when I bought the deal, and I’ve been making money for the last 11 years as a result of that one deal.  You can’t compete with that. Do you follow? So the rate return may not be your 30 or 40% on a flip, but at the end of the day it’s an infinite return that’s paying every single month.  Do you follow that?  Every single month!

Now we are getting that residential income flow every single month. It only takes two or three deals before all the sudden you’re like hey, I can be picky now. I can relax because every month there’s a check coming in the mail. How many of you would like to do that? Absolutely! Me too!

So as you are getting started in commercial real estate investing, or residential flipping, be sure to run your investing as a business with systems, know how much income you need to generate from your system to reach financial freedom, and stop working for “tips” as you transition to commercial real estate investing, if you’re not already there.

Rick Melero

  P.S. If you’re serious about making money NOW in commercial real estate, while building long-term wealth, all by learning how to re-position yourself to achieve INFINITE returns then you must attend our next live educational online webinar with America’s #1 Real Estate Network™. Register here, right now as a guest of Rick Melero and unlock the secrets to 6-figure paydays and awesome monthly cash flow per deal:

http://www.hisrealestatenetwork.com/383

 

 

HOW MUCH WILL YOU KEEP FOR RETIREMENT?

THING’S TO KNOW ABOUT IRA’S

 

 

Choosing IRA investments & the myriad ways to minimize taxes w/in these accounts will go a long way in determining how prepared you are for retirement.  According to the Investment Company Institute $4.7 trillion was held in individual retirement accounts in 2010, which accounts for approximately 25% of all retirement assets in the U.S. That number continues to rise as more & more move their funds to a Roth IRA.  This is not a promotion for Roth; however, it is time you take your retirement plans into your own hands.  Of course, you should seek the guidance of a certified financial planner or IRA specialist to discuss & create your plan.  In the meantime, let’s get the ball rolling & prepare you for your visit.  Remember, diversification & flexibility in your portfolio are keys to long term success.  It could very well determine if you are on the beach, travelling abroad or spending your twilight years as a greeter @ Wal Mart. 

 

The following will provide you with general knowledge, merely scratching the surface of the intricacies involved.

 

·        Traditional IRA’s allow you to defer paying taxes on up to $5k of savings if you are younger than 50 or $6k for 50 & older.  Upon withdrawal regular income tax is due on savings & interest vs. Roth IRA’s which are made w/after tax dollars & withdrawals in retirement from accounts @ least 5yrs old including the earnings are tax free.

·        Older age for retirement withdrawals:  Workers who leave their job @ 55 or later can take penalty free 401(K) withdrawals.  If you roll that money into an IRA you will have to wait til 59 ½ to avoid penalty; however there are a few items you may withdraw funds for & not be penalized the 10% tax. 1) non-reimbursed medical expenses that equal more than 7.5 % of your adjusted gross income.2) pay for health insurance after losing your job..3) Pay for higher education expenses..4) You may use up to $10k for a first home purchase (your spouse could do it as well)   

·        As an IRA owner you are now responsible for selecting (can you say real estate) & shifting your investments

·        No dollar amount limits for converting a traditional IRA to a Roth, however, retirement savers must pay income tax on the converted amount.  You future withdrawals will be tax free though, as you are basically paying up front removing the uncertainty of what future taxes will do to your savings.

·        Withdrawals are required within a traditional IRA.  Distributions are required after age 70 ½.  Should you fail to withdraw the correct amount you must pay a 50% EXCISE tax on the amount not distributed as required.

·        Costs vary & matter.  Sometimes IRA savers pay higher fees than 401(K) holders mainly because they do not have the “group” bargaining power to obtain lower cost investment products. Bottom line here is to pay attention to costs & fees & switch into low cost investments whenever possible. 

 

Sam Ally currently serves as Executive Director of the Investor Alliance Asset Management Group a division of the HIS Real Estate Network.  Utilizing time tested & proven strategies Sam presents innovative real-estate based investment solutions to his clientele that intelligently and ethically leverage the current economic crisis into high annualized returns with low risk.                

 

About a month ago to the day, I finally got my first deal under contract. I found the seller through a bandit sign and boy was he motivated! He owned a rental property that he had paid cash for and couldn’t afford maintain it any longer. His personal residence was going through foreclosure and he had a ton of credit card debt that he racked up through a failed business venture. This guy was hurting!

So needless to say I rushed and got the property under contract for $17,500 and I promised I would close within 30 days. I hadn’t realized that once I got it under contract, I was about to be schooled in the School of Wholesaling-For Hardknocks. Unfortunately I didn’t close the deal, but here are the valuable lessons I learned through the process.

Lessons Learned

1)      LOCATION LOCATION LOCATION! Focus within your immiediate area when starting off! DUH!!

The house was located 1.5 hours away from where I live. Correction: it was 1.5 hours away on a good day, with minimal traffic. On a regular weekday it would take me 2+ hours to get there. Once it took me 3 hours 45 mins to get there!! Yes-traffic was terrible that day and I encountered 2 fatal car accidents on the way there, one of which a medical helicopter had to be called in to pick up one of the victims. God bless them. My daughters were in the back seat and they were not happy that day, which leads me to lesson 2!

2)      When meeting a seller: Leave the kids at home!

I had to bring my daughters with me a few times (ages 5 and 2) to meet the seller and see the property, and although I love spending time with them- I found myself fussing with them and trying to keep them under control when speaking to the seller. I felt this was very unprofessional on my part but it may have helped the seller feel more comfortable with me and view me as a family man. I’m not sure. But I learned, it’s best to keep business time and family time separated when conducting business. Some people may consider it unprofessional and rude when your kids are playing loudly , screaming and running around their problem property.

3)      Due Diligence! Know ALL the FACTS before making an offer!

After finding the ARV, market rent, annual taxes, HOA fees and other factors that are pertinent to the deal, I made my offer. “I’ll take it for $17,500!” , I said to the seller when I called him with my offer. But I under-estimated one thing: actual REPAIR COSTS. As a matter of fact, the word “under-estimated” is in itself an “under-statement” in this case. On this deal I estimated, in my own little mind, that repair costs would be about $1,000 or less. That would consist on a new interior paint job, and replacing a few bathroom fixtures. Yeah, this house is GOLD I thought and I made my offer. Ooopsie!

            After getting the house under contract and getting a copy of the key, I called in a contractor (contractor lesson learned is to follow) and we went and walked through the house. The contractor pointed out many OBVIOUS repairs that I had overlooked because of my initial excitement. Bathroom floor tile needs to be bleached or re-grouted, shower tiles were missing or falling, the bathtub had rust and holes in it and so water was leaking through onto the floor underneath, the ceiling throughout the house had become loose and was about to cave in (the 3^rd bedroom was BAD) so it needed to be reinforced, the roof in the back was rotten and obviously leaking so roofers were going to have to be brought in to repair it, windows were cracked and needed replacing. In total, it would cost well over $7000 to make these repairs. Take the time to gather all the RIGHT information before making your offer and negotiating! I'm not a contractor and I know almost nothing about contruction so I should have contacted a contractor from the start before making the offer.

4)      Contractors! Grrr…..!

The contractor I met with was one tough cookie. As soon as he saw me, he knew exactly what I had called him in for and he was determined not to help. This guy refused to give me a number to go by as far as repair costs were concerned.

After walking through the house and taking notes, I asked “So given all the repairs we need to make, how much would it cost me for materials and labor?” He replied, “Oh, I can’t give you a number."

I asked, "Oh? Why not?" and he answered, "Well a lot of people ask me that only so they can see how much their going to profit on the deal and give the job to another contractor. It's a big waste of my time. I just can’t tell you.”

I was HEATED after that! “What a waste of time driving 2 hours all the way out here for this estimate only turn up empty handed!” I thought. After pushing him a little more he was kind enough to say it would cost a lot more than $7000 but that he couldn’t tell me any more or give me a breakdown of the costs and, then he left. Somehow I felt cheated after that. LOL

Anyway, find a contractor you can trust and explain to them BEFORE you meet with them at the property that you will need a solid estimate by the end of the walkthrough so they know what you expect and what they can expect as an outcome of the meeting. Tell them if their estimate seems the most reasonable then they will get the job once you close on the deal or you will highly recommend them to the end buyer to do the job. It wouldn’t hurt to actually get multiple estimates either. I just went with the one, another mistake. 

5)      Re-Negotiate!

After finding that the repair costs were going to be higher than previously thought, I recalculated all my numbers and found that I was going to have a harder time selling it at the price I planned on offering it at and I would make less profit as well. But me being the shy introvert that I am, I refused to call the seller to re-negotiate for a lower price.

6)      Marketing! Let the world know dammit!

Once I recalculated everything, I was ready to market the property to the world. But I didn’t. For reasons yet unknown to even myself, I only listed the property on Craigslist, Kijiji, and Oodle. Why? Good question. Maybe because these sites were free. Although I could have afforded to buy a few bandit signs to post around the neighborhood, or maybe even a classified in the local paper, I simply chose not too. Perhaps I was over-confident that the property would sell itself through the ads I posted onine. Either way,  I am more than convinced that THIS is a major reason as to why the house did not sell. Next time, once I get a house under contract I’ll make sure to spread the word like wildfire and tell everyone and their momma about it!

7)      BUILD A BUYERS LIST!!

This should be at the top of this list as it may be the single more important key to wholesaling. Always have a buyer’s list available. Now although I did have a buyer’s list of about 30 investors, neither of them were “serious” cash buyers and they especially were not looking to buy investment properties 2-3 hours away. Now, I am on a mission to find SERIOUS cash buyers that can close at a moments notice. I’ve learned the hard way how important this really is.

These are a few of the lessons I learned from my first deal...which never closed. Many of these mistakes seem like common-sense but for some reason or another I missed the clues. All of you beginners out there, take a moment to learn from my mistakes. All you veterans, just have a laugh why dontcha! Heck, why let you have all the fun?  I’m laughing about these myself now.  :)