Thursday, November 23, 2017
Friday, March 25, 2011
How to Set Your Real Estate Investor Goals
Effective goals are the key to being successful in the real estate business. Without goals, it’s like you are that hamster on the wheel or a ship without a rudder. Let’s face it. If you are planning a long car trip, you wouldn’t do it without either bringing a GPS with you or plotting your trip on a map. If you don’t know where you are going, how are you going to get there? Once you know where you are going, you have got to have a plan.
I went through elementary school, high school, and some college, but they never really taught me how to set goals. They told me I needed to set them, but was never taught how to.
In my opinion, in order to lead a truly full life you should have lots of money, a wonderful relationship with God, a great family life, and you should be healthy. Though note that nobody is perfect, including me.
As far as business goals are, only you can tell yourself how to set your goals. Here is how I set up my own goals. I set my business goals in two different ways. Income, (how much money I want coming in on a weekly, monthly, and yearly basis), and deals (how many deals I do). I look at my results in two different ways. I look at how many deals, and the average dollar amount per deal.
As far as personal goals, they can be relationship goals, family goals. Maybe you want to spend more time with your kids. Maybe you want to lose some weight. Whatever it might be, there are both personal and business goals to contend with.
To make a goal effective, it really needs to be written down. There was a study done at The Harvard School of business that was started some time ago. They had three groups: a group that had no real goals, a group that had goals, and a group that had goals and wrote them down. The group that had goals, made 2 to 3 times more money per year than the group that had no specific goals. The group that wrote their goals down, they made 10 or 15 times more money than the group that had no goals. So, it’s critically important that you write your goals down.
I’ve even heard of stories about people that wrote down a five-year plan, stuck it in a drawer somewhere, and never looked at it again until later, and were shocked that they had hit every goal on their list. So, write those goals down. Statistically, you are much more likely to hit your goals if you write them down.
Go ahead and search online for a goal setting template, or even make your own document up for yourself. I suggest you print it out and write it out. There is something about actually writing your goals down, that ingrains it in your subconscious.
Note that there is a difference between dreams and goals. That’s really what the difference is with writing them down. If you just have dreams in which some day you want to do this and some day you want to do that, it’s not really a goal, it’s just a dream. That is why the next step is that you need to make your goals very, very specific.
You don’t want to just say, “I want to be rich”. How rich? You don’t just want to say “I want to get a new car in the next year or so”. What kind of car? Go ahead and look at the cars right now. Put it in your mind and subconscious that that car is happening. Instead of having a goal that you will get a car in the next year, make it specific, right down to the year, make, and model. Don’t just say, “I want to make a lot of money or do a lot of deals in the next 12 months”. Make your goal specific, as in how many deals you want to do a month or how much you want to bring in a month.
Goals have to be measurable. You have to be able to measure exactly where you are in conjunction with your goals. As you are tracking your goals, you need to be able to see exactly where you are.
Goals also have to be believable. It’s one thing to say, “I want to do 10 deals a month”. If you’ve only done 2 deals in the last 12 months, saying you are going to do 10 deals a month might not be doable. You might fall behind and then not be able to believe that you will ever meet those goals. Also, remember that you can’t make your goals so easy that there is no challenge either. They have to be enough of a challenge that you have to work hard to get them, plus something that you believe. But, if they are too hard, you are going to lose faith that you can hit them and it will take the wind out of your sails. So, make sure they are believable and that you are going to stretch to reach them.
They also need to have a deadline; however you set it up, per month or per quarter. Per year, I think is too long. State a specific time line with a deadline written down. Your goals need to be measurable, believable, written down, specific, and they need to make you stretch. Every month your goals need to be a bit bigger.
And be honest with yourself. Reassess yourself as you go. I set my goals by month, but every 3 months I go and I see exactly where I am. At the end of 3 months, if I’ve hit my goals and I’m way ahead, I will adjust accordingly.
Another thing that I think is really important is that you tell others what your goals are. It’s just like writing them down. It’s going to put it into your subconscious a little more, to give you more chances, statistically, to hit your goals, by reminding yourself. You are also going to lose face. If I tell my Wife what I’m doing the next few months, and I don’t get anywhere near it, I’m going to be embarrassed. So, I feel it’s important to tell people what I’m going to do, even if they never say anything to you, or don’t care, you know that you told the world what you are going to do. You can even join a Real Estate Mastermind Group and tell them all what your goals are. Then they can hold you to it, because that’s what Mastermind Groups do for each other.
A good example of this is what happened to me the first year I joined a Mastermind Group. I went to a 3 day Mastermind Event that Summer and sat in the audience and set my goal to be a speaker at the event the next year. And not only did I set my goal to be a speaker, but I went on to the companies’ website that hosts the event and I posted that I was going to be a speaker the following year. It was actually posted on their message forum, and every other time I posted on their forum, I put under my name, “Speaker, Next Year’s Convention”. And guess what? I did speak next year at that convention.
Then what you want to do, once you have all of these processes going on, you want to do something to remind yourself of your goals. Go back once in awhile and take a look at the goals that you wrote down. Post something on the refrigerator to remind you of your goals. Several years ago, I ran a sales company and we had a goal board in my office. All of the people were paid on commission, so the better they did, the more money they made. I always encouraged them to bring in pictures of what they want. Be it a car, a vacation, a bracelet or something. I told them to bring in a picture and put it on that goal board so that every day, when you are sitting at that desk, you see that picture. I have my own goals posted at my desk. So, do something to continually remind yourself of your goals.
In conclusion, your goals need to be written down, specific, measurable, believable, set up a deadline for yourself, reassess your goals on a regular basis, be honest with yourself, and tell other people what your goals are. You will for sure be much more likely to hit those goals!
I went through elementary school, high school, and some college, but they never really taught me how to set goals. They told me I needed to set them, but was never taught how to.
In my opinion, in order to lead a truly full life you should have lots of money, a wonderful relationship with God, a great family life, and you should be healthy. Though note that nobody is perfect, including me.
As far as business goals are, only you can tell yourself how to set your goals. Here is how I set up my own goals. I set my business goals in two different ways. Income, (how much money I want coming in on a weekly, monthly, and yearly basis), and deals (how many deals I do). I look at my results in two different ways. I look at how many deals, and the average dollar amount per deal.
As far as personal goals, they can be relationship goals, family goals. Maybe you want to spend more time with your kids. Maybe you want to lose some weight. Whatever it might be, there are both personal and business goals to contend with.
To make a goal effective, it really needs to be written down. There was a study done at The Harvard School of business that was started some time ago. They had three groups: a group that had no real goals, a group that had goals, and a group that had goals and wrote them down. The group that had goals, made 2 to 3 times more money per year than the group that had no specific goals. The group that wrote their goals down, they made 10 or 15 times more money than the group that had no goals. So, it’s critically important that you write your goals down.
I’ve even heard of stories about people that wrote down a five-year plan, stuck it in a drawer somewhere, and never looked at it again until later, and were shocked that they had hit every goal on their list. So, write those goals down. Statistically, you are much more likely to hit your goals if you write them down.
Go ahead and search online for a goal setting template, or even make your own document up for yourself. I suggest you print it out and write it out. There is something about actually writing your goals down, that ingrains it in your subconscious.
Note that there is a difference between dreams and goals. That’s really what the difference is with writing them down. If you just have dreams in which some day you want to do this and some day you want to do that, it’s not really a goal, it’s just a dream. That is why the next step is that you need to make your goals very, very specific.
You don’t want to just say, “I want to be rich”. How rich? You don’t just want to say “I want to get a new car in the next year or so”. What kind of car? Go ahead and look at the cars right now. Put it in your mind and subconscious that that car is happening. Instead of having a goal that you will get a car in the next year, make it specific, right down to the year, make, and model. Don’t just say, “I want to make a lot of money or do a lot of deals in the next 12 months”. Make your goal specific, as in how many deals you want to do a month or how much you want to bring in a month.
Goals have to be measurable. You have to be able to measure exactly where you are in conjunction with your goals. As you are tracking your goals, you need to be able to see exactly where you are.
Goals also have to be believable. It’s one thing to say, “I want to do 10 deals a month”. If you’ve only done 2 deals in the last 12 months, saying you are going to do 10 deals a month might not be doable. You might fall behind and then not be able to believe that you will ever meet those goals. Also, remember that you can’t make your goals so easy that there is no challenge either. They have to be enough of a challenge that you have to work hard to get them, plus something that you believe. But, if they are too hard, you are going to lose faith that you can hit them and it will take the wind out of your sails. So, make sure they are believable and that you are going to stretch to reach them.
They also need to have a deadline; however you set it up, per month or per quarter. Per year, I think is too long. State a specific time line with a deadline written down. Your goals need to be measurable, believable, written down, specific, and they need to make you stretch. Every month your goals need to be a bit bigger.
And be honest with yourself. Reassess yourself as you go. I set my goals by month, but every 3 months I go and I see exactly where I am. At the end of 3 months, if I’ve hit my goals and I’m way ahead, I will adjust accordingly.
Another thing that I think is really important is that you tell others what your goals are. It’s just like writing them down. It’s going to put it into your subconscious a little more, to give you more chances, statistically, to hit your goals, by reminding yourself. You are also going to lose face. If I tell my Wife what I’m doing the next few months, and I don’t get anywhere near it, I’m going to be embarrassed. So, I feel it’s important to tell people what I’m going to do, even if they never say anything to you, or don’t care, you know that you told the world what you are going to do. You can even join a Real Estate Mastermind Group and tell them all what your goals are. Then they can hold you to it, because that’s what Mastermind Groups do for each other.
A good example of this is what happened to me the first year I joined a Mastermind Group. I went to a 3 day Mastermind Event that Summer and sat in the audience and set my goal to be a speaker at the event the next year. And not only did I set my goal to be a speaker, but I went on to the companies’ website that hosts the event and I posted that I was going to be a speaker the following year. It was actually posted on their message forum, and every other time I posted on their forum, I put under my name, “Speaker, Next Year’s Convention”. And guess what? I did speak next year at that convention.
Then what you want to do, once you have all of these processes going on, you want to do something to remind yourself of your goals. Go back once in awhile and take a look at the goals that you wrote down. Post something on the refrigerator to remind you of your goals. Several years ago, I ran a sales company and we had a goal board in my office. All of the people were paid on commission, so the better they did, the more money they made. I always encouraged them to bring in pictures of what they want. Be it a car, a vacation, a bracelet or something. I told them to bring in a picture and put it on that goal board so that every day, when you are sitting at that desk, you see that picture. I have my own goals posted at my desk. So, do something to continually remind yourself of your goals.
In conclusion, your goals need to be written down, specific, measurable, believable, set up a deadline for yourself, reassess your goals on a regular basis, be honest with yourself, and tell other people what your goals are. You will for sure be much more likely to hit those goals!
Thursday, October 21, 2010
Subject-To DOES NOT Mean Mortgage Payments and Repairs!
One of my viewers of the videos on my website sent me the following question and I’d like to address that here to share with everyone:
I live in Georgia and am moving to the Atlanta area to pursue that market as there are so many real estate opportunities there. I had a couple of questions and thought I would see what you said about them.
I have found several subject-to deals with TONS of equity. My long term strategy is buy and hold. I may do some flipping but I would probably reinvest the profits into buy and hold properties. If several of these subject to deals come through and they sign the papers all at once there will be no way for me to make all of the payments while making repairs or finding renters.
What would you do?
Is it possible to pull out equity from a property purchased subject to with say a HELOC or otherwise?
Sincerely,
Rich
This is what I would do:
One thing I DON’T do is sign a bunch of contracts and buy a bunch of houses sub-to and have all of these mortgage payments that I have to make. As a matter of fact, I rarely make any mortgage payments on sub-to’s while I’m waiting to find my tenant because I find my tenant BEFORE I close the deal.
I go into the sub-to deal saying, “Here’s what’s going to happen Mr. Seller, I’m confident that it’s going to work this way, but I’m not going to close until I find my sub-tenant, ready to move into the house.” Basically, it’s a standard sub-to contract. We go into the standard sub-to contract contingent upon us finding our buyer or tenant, or subject-to us finding our tenant or finding our buyer.
That way, I don’t make a single mortgage payment on that house until my guy has already paid me, has moved in, or is ready to move in. In a lot of cases, we get to keep the first mortgage payment and then the tenant starts making the second then third.
But in any case, put that contingency in your mortgage and the whole deal is contingent upon the buyer finding a suitable sub-tenant to occupy the property. That way, you get all of the paperwork done and you don’t close until you have the other guy ready to move in and you never have to make a mortgage payment while you are waiting to find your buyer.
Right now, the way the market is, you have a lot of buyers out there and lots of sub-to sellers out there. The sub-to sellers are desperate, and the sub-to buyers are plentiful. When I say “sub-to buyers”, don’t sell it to them sub-to, sell it to them lease with an option to purchase. That is the way I would do it, though note I am making a “Disclaimer” here. As you know there is more than one way to skin a house and more than one way to do this. Make sure you get the buyer lined up before you close the deal, if you can.
Now, if it’s a “home run” and it has $60,000 in equity, I’ll start making that mortgage payment yesterday to get my feet into that little house, because I know that house will make me a bundle. But, most sub-to houses don’t have as much equity as a retail flip.
Now, let me answer his question about repairs. I don’t make repairs on my subject-to houses. I let my tenants do it. Here is what I do. I ask my prospective tenants how much they have for an option fee or option deposit (which is similar to a deposit because it comes off of the price of the house) and whatever they say, here is what I say. If they have $6,000, I say: “You know, I was really looking for $12,000, but I can take the $6,000 as the option fee and get you into the house, if you are willing to take it without me putting in new carpet or paint and my fixing the bathtub. Because I was going to go in and fix that bathtub and put in new carpet and paint and I know I can get $12,000 up front from somebody else. But, if you are willing to take it in as-is condition, I’ll let you in with that $6,000”. And this works almost all of the time.
I have never had a house in which I had to do the repairs that I couldn’t fill otherwise. I have sold houses that looked really bad. Remember, these option people are so happy to get a house of their own, that they are willing to fix these things. And a lot of times, it’s not as bad in their eyes, compared to where they are coming from, as it might be in your eyes or a realtor.
So, make it contingent upon you finding your buyer, and now you don’t have to make any mortgage payments until they have taken over the house. Your buyer will come in, you’ll make your option fee, put it in your pocket, and you are off to the bank. Secondly, you won’t have to do the repairs because you are going to let your tenant do that.
Thirdly, as for asking if it’s possible to pull out equity from a property purchased subject- to, with say a home equity loan, or otherwise. I personally have never been able to put a home equity line on a subject-to house. I’ve never tried and I doubt I could do it.
Here’s what I do: Here is how I pull cash out of almost every subject-to house. I don’t want $5,000 or $6,000. I want to make $15,000 or $20,000. On almost every house I take subject-to, I borrow $10,000 from a private lender when I take over that house and I pay about 15% interest. I tell the lender that I just bought a house with a tenant in there. In a year or two from now, the tenant is going to buy the house from me. I would like to borrow $10,000 from you on that house and I will pay you 15% interest.
I know for some of you, it sounds like a huge amount. But, here is what I tell the lender. It’s a 15% flat interest per calendar year, no payments until I sell it off. So, he gives me $10,000 when I take that house subject-to. I now owe him $11,500. After one year, I’ll owe him $13,000. After two years, I owe him $14,500. I hope to cash it out before then, but I don’ really care. If it’s a good enough deal to take sub-to, and there’s enough equity in there, I don’t mind because I’d rather have that $10,000 up front and pay that $11,500 later or $13,000 later because I want that cash now.
Here’s what I suspect, Rich. I suspect that you are trying to borrow money off of these sub-to’s because you don’t have the money for the mortgage payments and make the repairs. If you follow the tips I’ve given you, you don’t need to borrow money on that sub-to house for mortgage payments and repairs! I hope this has helped you!
I live in Georgia and am moving to the Atlanta area to pursue that market as there are so many real estate opportunities there. I had a couple of questions and thought I would see what you said about them.
I have found several subject-to deals with TONS of equity. My long term strategy is buy and hold. I may do some flipping but I would probably reinvest the profits into buy and hold properties. If several of these subject to deals come through and they sign the papers all at once there will be no way for me to make all of the payments while making repairs or finding renters.
What would you do?
Is it possible to pull out equity from a property purchased subject to with say a HELOC or otherwise?
Sincerely,
Rich
This is what I would do:
One thing I DON’T do is sign a bunch of contracts and buy a bunch of houses sub-to and have all of these mortgage payments that I have to make. As a matter of fact, I rarely make any mortgage payments on sub-to’s while I’m waiting to find my tenant because I find my tenant BEFORE I close the deal.
I go into the sub-to deal saying, “Here’s what’s going to happen Mr. Seller, I’m confident that it’s going to work this way, but I’m not going to close until I find my sub-tenant, ready to move into the house.” Basically, it’s a standard sub-to contract. We go into the standard sub-to contract contingent upon us finding our buyer or tenant, or subject-to us finding our tenant or finding our buyer.
That way, I don’t make a single mortgage payment on that house until my guy has already paid me, has moved in, or is ready to move in. In a lot of cases, we get to keep the first mortgage payment and then the tenant starts making the second then third.
But in any case, put that contingency in your mortgage and the whole deal is contingent upon the buyer finding a suitable sub-tenant to occupy the property. That way, you get all of the paperwork done and you don’t close until you have the other guy ready to move in and you never have to make a mortgage payment while you are waiting to find your buyer.
Right now, the way the market is, you have a lot of buyers out there and lots of sub-to sellers out there. The sub-to sellers are desperate, and the sub-to buyers are plentiful. When I say “sub-to buyers”, don’t sell it to them sub-to, sell it to them lease with an option to purchase. That is the way I would do it, though note I am making a “Disclaimer” here. As you know there is more than one way to skin a house and more than one way to do this. Make sure you get the buyer lined up before you close the deal, if you can.
Now, if it’s a “home run” and it has $60,000 in equity, I’ll start making that mortgage payment yesterday to get my feet into that little house, because I know that house will make me a bundle. But, most sub-to houses don’t have as much equity as a retail flip.
Now, let me answer his question about repairs. I don’t make repairs on my subject-to houses. I let my tenants do it. Here is what I do. I ask my prospective tenants how much they have for an option fee or option deposit (which is similar to a deposit because it comes off of the price of the house) and whatever they say, here is what I say. If they have $6,000, I say: “You know, I was really looking for $12,000, but I can take the $6,000 as the option fee and get you into the house, if you are willing to take it without me putting in new carpet or paint and my fixing the bathtub. Because I was going to go in and fix that bathtub and put in new carpet and paint and I know I can get $12,000 up front from somebody else. But, if you are willing to take it in as-is condition, I’ll let you in with that $6,000”. And this works almost all of the time.
I have never had a house in which I had to do the repairs that I couldn’t fill otherwise. I have sold houses that looked really bad. Remember, these option people are so happy to get a house of their own, that they are willing to fix these things. And a lot of times, it’s not as bad in their eyes, compared to where they are coming from, as it might be in your eyes or a realtor.
So, make it contingent upon you finding your buyer, and now you don’t have to make any mortgage payments until they have taken over the house. Your buyer will come in, you’ll make your option fee, put it in your pocket, and you are off to the bank. Secondly, you won’t have to do the repairs because you are going to let your tenant do that.
Thirdly, as for asking if it’s possible to pull out equity from a property purchased subject- to, with say a home equity loan, or otherwise. I personally have never been able to put a home equity line on a subject-to house. I’ve never tried and I doubt I could do it.
Here’s what I do: Here is how I pull cash out of almost every subject-to house. I don’t want $5,000 or $6,000. I want to make $15,000 or $20,000. On almost every house I take subject-to, I borrow $10,000 from a private lender when I take over that house and I pay about 15% interest. I tell the lender that I just bought a house with a tenant in there. In a year or two from now, the tenant is going to buy the house from me. I would like to borrow $10,000 from you on that house and I will pay you 15% interest.
I know for some of you, it sounds like a huge amount. But, here is what I tell the lender. It’s a 15% flat interest per calendar year, no payments until I sell it off. So, he gives me $10,000 when I take that house subject-to. I now owe him $11,500. After one year, I’ll owe him $13,000. After two years, I owe him $14,500. I hope to cash it out before then, but I don’ really care. If it’s a good enough deal to take sub-to, and there’s enough equity in there, I don’t mind because I’d rather have that $10,000 up front and pay that $11,500 later or $13,000 later because I want that cash now.
Here’s what I suspect, Rich. I suspect that you are trying to borrow money off of these sub-to’s because you don’t have the money for the mortgage payments and make the repairs. If you follow the tips I’ve given you, you don’t need to borrow money on that sub-to house for mortgage payments and repairs! I hope this has helped you!
Friday, August 27, 2010
Persistence PAYS In Real Estate Investing
Let’s talk about persistence, you know, the ability to keep going when things keep holding you back? Sometimes both new investors and old need a check-up from the neck-up. This business can be tough at times !
That is what this business is like sometimes. You have to take one more smack, one more blow. I know that some of you feel like you have been knocked around out there. Be persistent. Stick to your guns. This business works! If you want to work for yourself and you don’t have a bunch of money or good credit to go around, this is the business for you! Think about if you want to open a McDonald’s or Subway, it could cost you a quarter to half a million dollars, and then it could take years to break even.
I don’t care what the guru’s tell you, this is not an easy business, though it’s simple sometimes. Once you do your first deal, it’s like the gates open and knowledge flows. The confidence from your first deal is what gets you going… but you need that confidence first.
Here’s a story I want to share with you about a miner:
Back in the gold rush days, there was a guy who wanted to be a gold miner, but didn’t want to do it alone. He wanted to hire a company and do it BIG TIME. He went out and got a loan, borrowed all kinds of money, put his life savings in it, hired some guys to go out there with picks and shovels, did tons of research to figure out where the gold is… and things got tough.
Days went on, and they dug and dug and dug and dug. They didn’t find any gold and things were looking gloomy and glum. Then, the guy got out. He backed out because he didn’t have any more money to pay his people and he couldn’t take it anymore. He finally said, “there’s no gold here!” and sold out. (I bet some of you are thinking the same thing right now in your real estate business)
He sold his business to in order to pay off his loans. Now, ANOTHER guy comes in who had a little bit more education and knowledge about the business. He put HIS guys to work, and literally, 3 feet away from where the other team stopped digging, they found one of the largest gold veins in California. This guy became mega-wealthy. Go ahead and look this up online and in the history books. It’s true!
You might be “this close” to your first deal. It takes only one deal to change your life! If you could do one deal tomorrow that could make you $20,000 to $30,000… or even $5,000… how much would it change YOUR life? It only takes one deal to make a difference. Now, you couldn’t retire after one deal, but it would allow you to pay off some of your bills, maybe take a nice vacation with your family. But, you have to be persistent!
I don’t know how many of you have been in jail swinging sledgehammers breaking those big boulders. (I wouldn’t want to try it) But, from what I have read, to break them, you have to hit them hundreds of times, without seeing as much as a tiny crack first. Then, all of a sudden, with one blow, it would crumble into many little pieces because it had been weakened from the inside out.
Business is Like Sometimes. You Have to take one more smack, one more blow
That is what this business is like sometimes. You have to take one more smack, one more blow. I know that some of you feel like you have been knocked around out there. Be persistent. Stick to your guns. This business works! If you want to work for yourself and you don’t have a bunch of money or good credit to go around, this is the business for you! Think about if you want to open a McDonald’s or Subway, it could cost you a quarter to half a million dollars, and then it could take years to break even.
To get into a business on your own, this is an easy business to get into. You don’t pay for it out of your pocket, but you do pay with stress and nerves at times. I know where you are at, I’ve been there. Rome wasn’t built in a day. But once you “get” this business, you’re able to do it over and over again. But… you have to have “stickability”!
In this business, you won’t get any worse with practice. If you’ve been in the business for a few months and have made a few offers, started your education, put out a few signs, or run some ads, you are not getting dumber or less smart in this business. Every time you fail, you take a step forward. (of course the shortest path to success is getting help and training)
I’ve known guys that have done deals for hundreds of thousands of dollars. Once you have the knowledge, the only difference is the amount of zeros on the paycheck. You do the same amount of work on a million dollar house as a $100,000 house. If you spend some money on training or bought a program or two, and put a lot of hours in it, and nothing has panned out, the only way it can go to waste is if you quit. Like I said before, it’s “stickability” and having the right attitude.
Let’s look at people who make big money. Real estate investors make big money. Athletes make big money. Actors make big money. Musicians make big money. Most of these actors and rock stars worked for $200 a week waitressing, cleaning, doing anything they had to do to put food on the table. Most of these actors and rock stars are “old” and that’s because they did gigs for $100 a night for ten years, before they became famous and successful. Most of them put years in first, while they whacked away at that stone, before they got that big break.
It’s the same thing in this business. Once you get that first deal, they are going to fall like bowling pins. That’s your big break… but don’t give up. Don’t be afraid to spend a little money to get some training. You have to be trained and have some support. You have to have someone you can go to for help. Go to your REIA, meet some people, and network. I do deals now that 4 or 5 years ago would fall apart, because when there was a problem, I didn’t know how to solve it. I learned that by “doing”!
I want to share a story with you:
In 1831, a man lost his job. In 1832, he was defeated in his run for Illinois State Legislator. He opened a business after that. A year later, in 1833, he failed and lost his business. In 1835, his sweetheart died. In 1836 he had a nervous breakdown. In 1838 he was defeated in another run for Illinois House Speaker. In 1843 he was defeated for the U.S. Congress. In 1846 he was elected to Congress, finally. In 1848 he lost. He was out. In 1849 he tried to become a Land Officer, he lost. In 1854 he tried to run for Senate and lost. In 1856 someone wanted him to be his Vice President, and he lost. In 1858, he again lost. Then, in 1860 Abraham Lincoln became President! This is Abraham Lincoln we are talking about. How many times did he whack away at that boulder to get where he wanted to go?
I too had to adapt recently. It’s all about education, learning, being persistent, and just keep going!
Did you know that Thomas Edison had about 1,000 ways that he failed while trying to get the light bulb to work? He always said he had 1,000 ways to make a light bulb. He only needed 1 way to make it work. But he was persistent. What if he didn’t keep on going?
So, be persistent! This business does work, and you can do it! Oh… and you can begin that training I talked about earlier by going to www.RealEstateInvestorOnline.com/vip .
Nick
Sunday, July 4, 2010
How Do I Get Into Commercial Real Estate Investing?
Know the Real Score of Commercial Real Estate Investing
First of all, commercial investing is not as hard as people think. There seems to be a stigma surrounding commercial investing. People think it's the big glass 100 million dollar buildings downtown. Sure, it is, but it's not always that. There are many different kinds of commercial investing that you can get into. You can start small and work your way up. It's not as hard as people think. It's not as hard to get funded, to find deals, and sometimes not as much work, once you have the deals.
Everyone that owns commercial properties are not like Donald Trump. They don't all have their own TV shows, aren't in the news, aren't in the casinos, own sports teams, and don't have the perfect woman on their arm. It's just real people that own most of the commercial properties out there. People like you and me. It's the guy next store. The guy that owns a few Dunkin Donuts stores. There are all types of commercial properties.
The Basic Facts About Commercial Investing
Let's talk about the basics. First off, what is commercial investing? When it houses a business, it's a commercial investment. Business parks, where it's one level, and there are many different buildings, those are commercial rented condos or business offices. It consists of office buildings in office parks. There are also industrial parks which look like office parks, but they are mostly blue collar businesses like manufacturers, warehouses, and storage places. This also includes strip malls where there are Starbucks, Dunkin Donuts, UPS stores, etc. It's one building, one- story tall that's broken off into many different stores. Then we have our indoor malls where there are hundreds of stores inside, which include an anchor store, which is the main store, like a Sears or Kohls to get your attention. There are also office condos which house doctors, offices too. Also, we have warehouses, and even apartment houses. These are considered recession-proof properties. Assisted living facilities are commercial properties as well. Let's not forget about land. People are buying land and putting a cell tower or antennae on the land and making money.
Best Things About Commercial Investing
One of the things about commercial investing is that once you own the property, it's easier to maintain it because most of the time, you will let the pros handle it.
One of the things about commercial investing is that once you own the property, it's easier to maintain it because most of the time, you will let the pros handle it. You will have a management team to handle the payments, as well as attorneys and accountants handling the day to day work. There will be less day to day work once you own that commercial property, versus a residential property. Let's face it. If you own one piece of property with tenants in there, you know how much work that is. If you have a few properties, it's even more work dealing with tenants not paying, collections, disappearing tenants, and cleaning it out and finding new tenants. It's a lot of work! Virtually, you can pretty much have the pros do it for you. You can hire a management team, attorney, and accountant. Properties generally throw off enough monthly cash flow so that you can have it all taken care of for you.
Anything you do with residential properties, you can do with commercial properties! You can buy and hold a house and rent it out, as well as a commercial property. You can wholesale it, get a contract on it, find someone to pay more, flip it, and step out of the deal. You never owned it. You get your finders' fee or spread, but instead of making $3,000 or $8,000, you can start making $50,000 to $200,000 just by flipping commercial deals. Just add another zero or two! Don't let it intimidate you!
Don't Let Commercial Investing Intimidate You
You can also lease commercial properties with the option to buy and make the big bucks!
All of the same techniques you can use with houses, you can use with commercial properties. Note that one of the main differences is how you get the value. For houses, we run comps. For commercial properties, we appraise it on how much cash it's throwing off. You can have two apartment buildings across the street from each other or in the same complex, and both apartment buildings can be identical. But, if one is 30% occupied and one is 70% occupied, and the first one is worth $700,000 and the next one worth 3 or 4 million, the only difference is how much it's occupied. How do you make big money fast in commercial investing? You find the one that is 30% occupied, find 5 or 6 tenants and bring it up to 70% occupied, and then you sell, get out of it, and make the spread. You can double or quadruple the cost or equity of commercial property by controlling it, filling it, and then getting out of it. It's a beautiful thing!
Don't let commercial investing intimidate you. Add a couple of zero's to the profit! Consider opening your mind about commercial investing. Start thinking big!
First of all, commercial investing is not as hard as people think. There seems to be a stigma surrounding commercial investing. People think it's the big glass 100 million dollar buildings downtown. Sure, it is, but it's not always that. There are many different kinds of commercial investing that you can get into. You can start small and work your way up. It's not as hard as people think. It's not as hard to get funded, to find deals, and sometimes not as much work, once you have the deals.
Everyone that owns commercial properties are not like Donald Trump. They don't all have their own TV shows, aren't in the news, aren't in the casinos, own sports teams, and don't have the perfect woman on their arm. It's just real people that own most of the commercial properties out there. People like you and me. It's the guy next store. The guy that owns a few Dunkin Donuts stores. There are all types of commercial properties.
The Basic Facts About Commercial Investing
Let's talk about the basics. First off, what is commercial investing? When it houses a business, it's a commercial investment. Business parks, where it's one level, and there are many different buildings, those are commercial rented condos or business offices. It consists of office buildings in office parks. There are also industrial parks which look like office parks, but they are mostly blue collar businesses like manufacturers, warehouses, and storage places. This also includes strip malls where there are Starbucks, Dunkin Donuts, UPS stores, etc. It's one building, one- story tall that's broken off into many different stores. Then we have our indoor malls where there are hundreds of stores inside, which include an anchor store, which is the main store, like a Sears or Kohls to get your attention. There are also office condos which house doctors, offices too. Also, we have warehouses, and even apartment houses. These are considered recession-proof properties. Assisted living facilities are commercial properties as well. Let's not forget about land. People are buying land and putting a cell tower or antennae on the land and making money.
Best Things About Commercial Investing
One of the things about commercial investing is that once you own the property, it's easier to maintain it because most of the time, you will let the pros handle it.
One of the things about commercial investing is that once you own the property, it's easier to maintain it because most of the time, you will let the pros handle it. You will have a management team to handle the payments, as well as attorneys and accountants handling the day to day work. There will be less day to day work once you own that commercial property, versus a residential property. Let's face it. If you own one piece of property with tenants in there, you know how much work that is. If you have a few properties, it's even more work dealing with tenants not paying, collections, disappearing tenants, and cleaning it out and finding new tenants. It's a lot of work! Virtually, you can pretty much have the pros do it for you. You can hire a management team, attorney, and accountant. Properties generally throw off enough monthly cash flow so that you can have it all taken care of for you.
Anything you do with residential properties, you can do with commercial properties! You can buy and hold a house and rent it out, as well as a commercial property. You can wholesale it, get a contract on it, find someone to pay more, flip it, and step out of the deal. You never owned it. You get your finders' fee or spread, but instead of making $3,000 or $8,000, you can start making $50,000 to $200,000 just by flipping commercial deals. Just add another zero or two! Don't let it intimidate you!
Don't Let Commercial Investing Intimidate You
You can also lease commercial properties with the option to buy and make the big bucks!
All of the same techniques you can use with houses, you can use with commercial properties. Note that one of the main differences is how you get the value. For houses, we run comps. For commercial properties, we appraise it on how much cash it's throwing off. You can have two apartment buildings across the street from each other or in the same complex, and both apartment buildings can be identical. But, if one is 30% occupied and one is 70% occupied, and the first one is worth $700,000 and the next one worth 3 or 4 million, the only difference is how much it's occupied. How do you make big money fast in commercial investing? You find the one that is 30% occupied, find 5 or 6 tenants and bring it up to 70% occupied, and then you sell, get out of it, and make the spread. You can double or quadruple the cost or equity of commercial property by controlling it, filling it, and then getting out of it. It's a beautiful thing!
Don't let commercial investing intimidate you. Add a couple of zero's to the profit! Consider opening your mind about commercial investing. Start thinking big!
Thursday, May 27, 2010
Don't Quit
I want to share something that you "old-timers" might remember. Remember the old Timex watches? When we were kids, the big campaign was "Takes A Lickin, But Keeps on Tickin".
It's a good time to be in real estate, as long as you change your tactics. There are a lot of investors getting out of investing right now because they are trying to invest using old methods. They are doing what was taught 5 years ago, in the heyday when it was so easy to sell a house, find a buyer, and get people financed. It's not like that anymore!
Sometimes you see successful people and they are so successful and you wonder, "What makes me different from him? Why is he doing 6 deals a month? Why is he making the big money, when I've been out here struggling?" It took me a year before I got my first deal closed. There is only a little teeny tiny difference between successful and non-successful people. The difference is that the successful people don't quit and they keep on going. Think about it. If you put a successful and non-successful guy right next to each other, they look pretty much the same. We have the same amount of hours in a week. We have brown hair or we are bald, we're short or we're tall, we're fat or we're thin. There's really not much difference between successful people and unsuccessful people, except successful people have oodles of money, they have the big bucks!
It's a good time to be in real estate, as long as you change your tactics. There are a lot of investors getting out of investing right now because they are trying to invest using old methods. They are doing what was taught 5 years ago, in the heyday when it was so easy to sell a house, find a buyer, and get people financed. It's not like that anymore!
Sometimes you see successful people and they are so successful and you wonder, "What makes me different from him? Why is he doing 6 deals a month? Why is he making the big money, when I've been out here struggling?" It took me a year before I got my first deal closed. There is only a little teeny tiny difference between successful and non-successful people. The difference is that the successful people don't quit and they keep on going. Think about it. If you put a successful and non-successful guy right next to each other, they look pretty much the same. We have the same amount of hours in a week. We have brown hair or we are bald, we're short or we're tall, we're fat or we're thin. There's really not much difference between successful people and unsuccessful people, except successful people have oodles of money, they have the big bucks!
The Only Time you Fail in this Business is When you Quit.
You wonder why. It's because they kept on going when things got tough. They didn't listen to people that were telling them that they can't do it. They didn't listen to people that told them it didn't work. Think about it. When you first decided to get into investing, I bet you that half or more of the people you told, especially the people you are close to, told you it wouldn't work, and that you should get a real job. Everybody "knows" someone who lost their butt in real estate, right? You hear the stories and I heard the stories too, from relatives. Don't listen to outside people.
Look at the people that are successful and keep on going. The ones that make it work just a little bit harder, maybe they did just a little bit more, that extra 2%, that extra 5%, that extra 10%. If you don't give up on yourself, it will make you rich. That's the difference. Don't give up on yourself.
Almost all investors struggle. We all do. I was in the business close to a year before I got a deal done. I just refused to give up. My Wife and other people told me to give up. It made perfect sense to give up, but I wouldn't. The difference is, is that I was too stubborn to quit. The only time you fail in this business is when you quit.
Look at the people that are successful and keep on going. The ones that make it work just a little bit harder, maybe they did just a little bit more, that extra 2%, that extra 5%, that extra 10%. If you don't give up on yourself, it will make you rich. That's the difference. Don't give up on yourself.
Almost all investors struggle. We all do. I was in the business close to a year before I got a deal done. I just refused to give up. My Wife and other people told me to give up. It made perfect sense to give up, but I wouldn't. The difference is, is that I was too stubborn to quit. The only time you fail in this business is when you quit.
Real Estate A Good Place to Invest
I want to tell you about someone I know. He grew up in an average neighborhood in a lower-middle class family. He lost both of his parents due to cancer when he was young and essentially became an orphan. He dropped out of college because he was broke and had no money left to pay for his education, and found himself sleeping on the streets and living in $50 a week hooker and drug hotels. He finally got a job and went out and learned how to do something. He went into sales, opened his first business after copying what he learned in his first job, soon went out of business and lost his house to foreclosure and was then $150,000 in debt. He went out, got another job, got back on his feet, paid off his debts, quit his job, and opened another business because he didn't want to work for anybody else. He was soon after that hit by a truck and suffered severe injuries! He was prescribed Vicodin and as his pain got worse, and his tolerance got higher, the doctor prescribed him more Vicodin. He found himself terribly addicted to pain meds and found a way to buy them online. He soon had a 40-50 pill per day, $2,000 a week habit. He found a doctor that literally saved his life, and got him off of the Vicodin. Because of all of that, he lost the second business that he had opened and was now almost $200,000 in debt. He got a job back in the original industry that he was in 15 years earlier, discovered real estate investing, and is now a successful investor and coach! That's me folks!
Keep on Making Offers. Don't Quit!
You know, the successful people, you don't hear about them. They don't tell you all about their trials and tribulations. You look at them driving those fancy cars, living in those big houses, and traveling all over the world. They didn't just get there by magic. They worked for it, and they didn't quit.
What's the alternative? Work for 40 years for 40 hours a week and retire with a Kool-Aid party sometime in the future? Don't quit folks. I don't care how tough it's been or how much money you've spent. Keep on plugging. And if you are doing this business smart, you shouldn't be spending a lot of money! You should be putting in your time, but you don't have to spend a lot of money to do this business right. If you think you have spent too much money, you have been trained by the wrong people. So, if you are investing, keep on making offers. Don't Quit!
What's the alternative? Work for 40 years for 40 hours a week and retire with a Kool-Aid party sometime in the future? Don't quit folks. I don't care how tough it's been or how much money you've spent. Keep on plugging. And if you are doing this business smart, you shouldn't be spending a lot of money! You should be putting in your time, but you don't have to spend a lot of money to do this business right. If you think you have spent too much money, you have been trained by the wrong people. So, if you are investing, keep on making offers. Don't Quit!
Keep Hanging
Keep hanging in there because the alternative is working for someone else for the rest of your life. You are either working for yourself and making yourself rich or happy, and coming and going as you please. Or, you are working for someone else and making them rich. There are very few industries where you can write your own ticket. It works if you are a famous actor, a great athlete, or writer. There are niches that you can work for someone else and make a boatload, but there's not a lot. Now, when I say "boatload", I don't mean to get a good job and make $80,000 or $90,000 a year. I mean $100,000 a MONTH money. You are not going to make that working for someone else. It's not going to happen! Don't Quit!
Saturday, March 20, 2010
Overcoming Fear In Real Estate Investing
This is for anyone who has ever had a little bit of fear keeping them from doing deals. Fear and faith are really the opposite and I want to delve into the psychology of investing and overcoming your fears so that you can take the steps forward that you need to. Nothing great is never easy and it always takes a leap of faith to accomplish something.So, you investors out there who have never done a deal, this is for you. For those of you who know you know this business and have the tools and education to do this, this will help you too. Everybody has been there.
I sat next to a woman not too long ago at a real estate investing seminar and she told me that she had spent over $40,000 on her investing education. She had almost every book and tape available to her. She knew so much, she could teach ME the business! I asked her many questions and she knew her stuff. I asked her why she hadn’t bought a house and she told me it’s because she never had the opportunity. I asked her why she never put an ad in the paper, and her response was, “I was afraid that someone might call”. I said that that’s what we do, don’t let fear stop you! I told her she could write herself a script and if they call, she could follow the script, and she might end up buying a house. Her exact words then were, “I was afraid if I bought a house, I wouldn’t know how to get rid of it!”
If you have the education and you really want to do this business, but haven’t pulled the trigger, read on. Fear and faith are the opposites of one another. If you’ve got the faith that you are going to achieve with the fear that you won’t, it will always overlap. Deep down in your heart, you do believe you can do this, don’t you? If you didn’t believe you can do this, you wouldn’t be receiving this Newsletter, right? Would you spend the time learning about this business if you didn’t truly believe that you could do it?
Here are some tips to overcome fear:
Have a mentor. You don’t have to join a high-price coaching program to mentor you. Your mentor can be a real estate investor at your local real estate investor club that you struck a good chord with. Ask them if they mind if you give them a call once in awhile with a question or two. They probably won’t mind if you call them once a week and talk for 10 minutes.
Another way to handle it is through meeting someone in your area who is doing deals. Just let them know that you get deals coming across your desk, and you are not sure if they are good. Let them know that you are looking to do your first deal. Ask them if they mind if you give them a call to run it by them and maybe you can do the deal together and split it? Let them know you will do the work but you just need someone to run it by. A lot of investors will take you up on it and will even tell you they don’t need your money.
It could be a realtor that works with investors or even a landlord that owns a handful of houses or apartment buildings that has been around awhile. It could be a mortgage lender. Funding is a huge part of this business. Nobody knows the mortgage business more than a mortgage lender. The key is to get out there. Don’t sit in your office or sit in your living room thinking about all of the problems that could go wrong. You’ve got to network. If it wasn’t for networking, I wouldn’t be in the business. I went to as many real estate investment clubs as I could and I got to meet people, and slowly over time I all of a sudden knew the business. And you are always learning. You can’t be afraid to get out there, reach out, shake someone’s hand, and get to know them and ask some questions.
Another idea is a mastermind group with other members. There is nothing that has helped me more in my business is a mastermind group and talking to other investors. Sometimes you just need a pat on the back or a kick in the butt to get going so you are not so afraid. Don’t let fear overwhelm you!
The types of deals you can begin with are wholesale deals, bird-dogging, or option deals. There are no risks with these. With an option deal, you find a pretty house at a good price and get an option to buy it. You tell the Seller up front that you may never buy this house. Let them know you are getting an option on it so you can buy it if you want. Tell them the truth. Let them know that you are going to try to find someone else to buy it for a little bit more. Let them know that when you go to bed at night, that you are thinking about their house, and when you wake up in the morning, you’ll be thinking about their house. And you will also be thinking about their house in all of that awake time in between, looking for someone to buy your house from me when the time comes. Tell them not to get their hopes up too much. What is your risk? Maybe you will give them $50 or $100 as an option deposit. Again, what is your risk? Nothing! And you haven’t risked your integrity, because you told him up front that you might never buy the house. Same thing goes with a wholesale deal. If you are wholesaling, (typically we don’t tell the seller we are going to find someone else to buy it from us), but you could if you are afraid to go back to the seller and tell them you are not buying it. If you are dealing with the right sellers, they don’t care WHAT you told them, as long as you are trying to help them out with their problem. With wholesaling, what risk do you take? If you don’t find somebody to buy the house, you walk away from the deal.
What are you afraid of? Sometimes, “the only thing to fear is fear itself”. I know it’s an old adage, but it’s the truth. There is nothing to be afraid of.
Even with short sales, you have nothing to be afraid of. You are telling the seller up front that you are going to try to work with the bank to get it cheap enough so we can buy. Let them know up front that you can’t buy it if the bank doesn’t work with you. So, what have you got to lose? Don’t let that fear overwhelm you.
Do wholesale deals, option deals, short sales (which are a lot of work), or even bird-dog for other people. Be up front with people if you find a good deal.
Remember, everyone in this business got some help when they first started. One deal turns into two, two deals turn into three. But, you have to do that first one. Concentrate just on one type of deal then. I suggest not doing a sub-to or a rehab for your first deal, if you are nervous. Pick a wholesale or an option deal for your first one.
You can do this business! If I can do this, as well as a thousand other people, so can you! Turn your fear into faith. Wake up every morning and say, “Yes, I can!”.
To Learn more about real estate, watch videos, get free reports and more, go to: www.RealEstateInvestorPlus.com.
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