Think Like a Millionaire: How to Invest in Real Estate

Many people fail to see that skills fade, but assets are forever.They don’t know their entire financial education in their lives is completely WRONG!Too many people believe that a good job, good skills, and a positive attitude will make them great wealth. The problem is that it just doesn’t work that way. People who make an hourly wage and an annual salary cannot build wealth. This is because their money doesn’t work for them, and instead they work for their money. This idea keeps them from understanding that the only way to build wealth is to invest in multiple sources of income that you don’t have to work for, but instead build yourself or purchase from someone else.Another misconception of multiple sources of income and passive income is that people assume government and financial institutions offerings such as the stock market, CD’s, and many other financial instruments are passive income. Most of the time however, unless it is a note or bond that pays you regular interest. It is not actually passive income or a stream of income. As a stream of income or passive income is income that you make every day, every month, and every year continuously as cashflow. Stocks and the like only make you money on the sale and never anything in the meantime. Meaning they don’t ever actually cashflow. For example, it is the same as purchasing a piece of fine art and hoping that it appreciates the longer you hold onto it. Which is risky and locks your money up from better uses.Real Estate as an InvestmentReal Estate is the King when it comes to creating wealth for people. No other offering has the traits and abilities like real estate does. It is constantly appreciating and gaining value. It is always in demand because people need a place to live. And most important of all, it is a real asset that isn’t going anywhere soon. Allowing you to borrow against it as collateral and even to write off all expenses and costs associated off on your taxes. Now let’s not wait a moment longer to get into Real Estate as an Investment.Real Estate You Can Buy as InvestmentsThere is so many ways to invest in real estate and the major differences comes to how much capital you will need to put down to purchase them. This could be as little as $40,000 -$50,000 to buy a condo outright, to only $10,000+ to purchase a $100,000 single family home, or to as much as $20,000-$30,000 to purchase a multifamily home (2-4 units). All of which are Residential and can be easily financed.Once you get past 4 units, small office buildings, and industrial properties. You’re going into commercial territory and have a lot more hoops to jump through as well as have to start working with commercial lending which can require sizable amounts of capital before they will lend. In the rear, is my personal favorite of mobile homes and parks. Which are hard to sell, but can cashflow in all sorts of amazing ways from lending on the mobiles themselves to charging them for renting the use of the land. All of which is taxed as land which is the cheapest tax rate you can have on property.· Condos/Flats – Condos and flats are some of the best to buy for cashflow as they give the best cap rates. The only issue comes on the resale as many can be hard to finance as an investment property, preventing a large portion of the population from being able to purchase them.· Single-Family Homes – Single-family homes are easy to rent, easy to sell, and easy to finance.· Duplexes/Triplexes/Quads – Small multifamily properties (2-4 units). These property types combine the financing and easy purchasing benefits of a single-family home with the cashflow benefits and less competition found in larger investments.· Small Apartments – Small apartment buildings are made up of between 5-50 units, they can make great cashflow, but can be very illiquid on the resale.· Small Commercial Office Space – Buying small commercial buildings and renting out office space to business professionals.· Industrial Properties- Manufacturing, warehouses, distribution centers, etc.· Mobile Homes – Inexpensive way to enter the world of real estate investing and can also experience significant cashflow.· Mobile Home Parks – The entire park in which mobile homes are situated on can also be bought and sold. Rent the individual lots to mobile home owners, and as well as have corporately owned and leased ones.Strategies in Finding Investment PropertiesJust as there are a million ways to skin a cat, there is a million ways to find properties for investment. Of the many ways to find the properties for investment. The most common ways are to find the owner directly and give them a cash offer, to find properties that are owned by a lender or bank that they want to get rid of at a discount, or purchase a lien on the property so you can foreclose on the property yourself.

Lease Options – Buying the property and “renting” it with the legal right to buy it later.

For Sale By Owners (FSBO) – Private owners sell their property themselves with a sign or newspaper advertisement, they may want to sell their properties at a discount to avoid paying a realtor

REO’s – Foreclosed Property owned by banks can be bought under market if the demand isn’t too high

Auction at the Courthouse Steps – During the process of foreclosure, a home is brought to the courthouse steps to be sold to the highest bidder.

Buying in Pre-foreclosure – Sellers on the brink of losing their home can be very motivated to sell their home and save their credit and their lives

Short Sales – A bank will often take less than the loan amount on a property to save from the hassle and costs of foreclosing and reselling.

Tax Liens – When homeowner’s refuse to pay their taxes, the government can foreclose and resell the property.

HUD Foreclosures – When a US government ensured loan is foreclosed on, it often becomes the property of the department of Housing and Urban Development.

VA Foreclosures – Similar to the HUD foreclosures, the US Department of Veteran’s Affairs sells their homes as well after foreclosing on one of their insured properties
Strategies in Buying, Renting, and Selling Properties:When you finally have the property in your grasp, there are many techniques you can use to maximize your return. Some properties are great for buy n’ holding. Meaning you buy them for cashflow, but are expecting to also make a sizable return on the resale due to appreciation. Next up is Fixing N’ Flip/Hold, which is finding properties undervalue and fixing them up to either hold onto for cashflow or to sell immediately for instant profit. Then there is Turn-key-Investing, this is where you find the property, turn it into a profitable cashflow and sell it as a source of income to a big fish investor. For Big Commercial, there is NNN leasing that entails having the company renting the property takes care of all the trimmings of the property and pays you for leasing the space. Another Buy N’ Hold strategy that can make decent money is to turn your Buy N’ Hold property into a Vacation Rental and charge 3x as much than a normal lease. Then there is hard money lending, where you finance others in their fix n’ flips, buy n’ holds, or primary residence.

Buy-N-Hold – Buy real estate, rent it, and hold it until the market is up and a great buyer comes along

Fix-N-Hold- Buy below market value, remodel to force appreciation, and held until the market improves and sell it

Fix-N-Flip – Buy well below market value, remodel to market prices, and sell it immediately to get your return.

Turn-Key-Investing – fix-and-flipper, but sells remodeled properties to out-of-town individuals seeking a good place to keep their money moving.

NNN Lease – Big Businesses rent the building and pay all costs associated with the building such as maintenance, taxes, insurance, and more. We can own these buildings for highly-passive income.

Vacation Rentals – Buying vacation property and renting it out off and on season (Snowbirds)

Cash Purchase, Sell on Contract – Buy properties and immediately re-sell them to buyers who may not be able to conventionally qualify for a mortgage. Collect a large down payment when using this method.
How to Finance:Financing is readily available to anyone who has a cash for a down payment. Below is the major ways you can finance your Real Estate Investments.

All Cash – Property with no mortgage attached is very stable and a safe return. May not be as great as when using leverage (like a mortgage)

Seller Financing – Seller owns a property free-and-clear (no mortgage), and can be negotiated with to find a finance deal

Unconventional Lending – There are many lenders who will lend on any deal you have as long as the number make sense, this can be anything from landlord loans, had money, and much more

Self-Directed IRA – If you have a 401(k), throw it out, it’s time to put that money in a self-directed IRA and make that money finally work for you than expecting some money manager who is just trying not to lose your money than make you any. You can use your money in your SD-IRA to do all the strategies in buying, selling, and renting.

20%-25% Down Conventional Investment Mortgage – buy a real estate investment through a bank. Come up with 20-25% down payment and have the bank finance the rest

10% HomePath Investment Mortgage- These loan types are only available on Fannie-Mae backed bank REOs, but can allow an investor to purchase the home for just 10% down payment with other benefits.

Home Equity Line of Credit (HELOC) – With significant equity in real estate, M&T can borrow a line of credit off M&T Real Estate equity.

Small Business Loans – Banks often will finance a line of credit or loan for small businesses- to include a real estate investment company
Conclusion:If you have the mind for real estate or want to hire someone who does. Then you should forego a large portion of your portfolio to invest in real estate. It easily as one of the highest returns than any other investment in the world, the only caveat, like anything else, is that you need to do it right to be successful.

Real Estate Leads 101 – Are You Copping Out of Following Up

Working with a lead generation company has given me interesting insight into both real estate leads and agents. I dealt with both ends: the consumer and the agents themselves, and my job was to make them both happy. Yeah right. Easier said than done.The consumer side is easy – real estate leads want a home value, they want information on the market, they want a real estate agent and we get them that. The real estate agents? Well that’s another story – they pretty much wanted everything under the sun when it comes to real estate leads. They wanted to be handed people ready to list their homes with them asap, with no work involved on the agent’s part. They want listings, not real estate leads.Well, if I could provide that consistently, all the time, I’d either have a multi-million dollar company, or I’d be doing real estate full time myself. Get this through your heads agents: there is no magic service out there that will hand you listings for a low fee. Instead, these services provide you with real estate leads and it is YOUR job to turn them into clients. Got that? Real estate leads + you = clients!YOU went to the classes, YOU studied up on sales and marketing techniques and YOU printed up all kinds of trinkets with your name and logo on them for your real estate leads. Ergo, YOU must convince your real estate leads to work with you. And if you’re not converting them, maybe you need to take a look at your own methods, rather than immediately blame the source of the real estate leads.By now, I’ve probably heard every excuse under the sun as to why online real estate leads are bad or bogus. And that’s all it is, an excuse, a cop out to make you feel better about not being able to turn your real estate leads into listings. That being said, here are the top 5 cop-outs I’ve heard over the years about following up with real estate leads and my responses to them.1. I’m a new agent and no one wants to use a new agent.Well, how do they know you’re a new agent? Did you announce it the second you spoke with your real estate leads? You don’t need to tell all your real estate leads that you’re new. If they ask, tell them, and be honest, but don’t just volunteer the information. And how to you know “no one” wants to use a new agent – sounds like a gross generalization to me. You won’t know until you get out there and try – convince your real estate leads that to be new means you’re cutting edge, the best thing out there right now, show them what an expert you’ve become, even if you’re new to the business. Just TRY to convert them. Assuming from the start your real estate leads won’t want to use you because you’re new doesn’t even give you a chance.2. Some real estate leads are on the Do Not Call Registry.So? There’s no such thing as a Do Not Knock list. If your real estate leads are on the DNC Registry and you feel THAT uncomfortable risking a call, you should have your butt in the car, directions in your hand and preparing yourself mentally for your introduction once you knock at their door. And actually, as per the basic rules of the Do Not Call Registry, if a consumer on the lists makes an inquiry (which is what online real estate leads are!), you can contact them for up to 3 months after the inquiry. So you’ve got 3 months to get them on the phone, after that, there’s still always that door! Don’t use the DNC as a cop-out method with real estate leads. It’s a flimsy excuse.3. It’s unprofessional to go knock on someone’s door.This is the line I usually got after suggesting stopping by the property. My thing is, who said so? Who told you it is unprofessional to go visit your real estate leads’ homes and drop off the information they requested? That is a matter of opinion and as long as your real estate leads don’t think it’s unprofessional, you’re good. And by showing initiative and going out of your way to meet your real estate leads, you may have just earned a client for life.4. These real estate leads are too far from my area, or it’s in a very bad part of town.This is probably my favorite cop out, because it just sounds ridiculous to me. If your real estate leads are too far, why did you sign up for that area? Or, if you are getting some real estate leads out of your area, how far? Most of the time, agents complain about having to drive 30 minutes away. To me, 30 minutes of my time is DEFINITELY worth the fat commission check I could get. And if some real estate leads are too far, haven’t you EVER heard of a REFERRAL COMMISSION? Find an great agent in the lead’s area and send it on over. That way you’ll still get a portion of the commission AND you’ve saved 30 precious minutes of your time.When real estate leads are in a bad part of town, it usually means it’s a very low-value home and is located in either a ghetto or backwater somewhere. It pisses me off when real estate agents say that the home isn’t worth their time. Guess what buddy? When you got your license, you gained knowledge that others don’t have, but will need at some point. You should be willing and open to share this with your real estate leads, no matter what the economic status of their home and income is. If you don’t want to help them, no one can force you, but you are a BAD agent if you’re not at least willing to find someone who will your real estate leads.5. If they wanted to be contacted, they would have given all their correct contact information.This is a tough one, because on one level I do agree with this SOMEWHAT. Real estate leads who give a good name, number, address and email seems to be more approachable than real estate leads that have fake names, or fake numbers, etc. But again, this statement is really a matter of opinion. You have NO idea what’s going through the consumer’s head when they filled out their information. Maybe they’re not technologically savvy and thought if they put their phone number over the Web, everybody would get it. Maybe they mistyped something. Maybe they don’t want to be hassled daily by telemarketer calls but DO still want the information. Until you actually touch base with your real estate leads, you have no idea where their head is at. What would hurt worse, getting a phone slammed in your ear, or missing out on a $15,000 commission because you THOUGHT they didn’t need anything since they gave a wrong phone number?These 5 objections are really just cop-outs and excuses in disguise for not following up with your real estate leads. And pretty flimsy ones at that. If these are your objections to your real estate leads, you need to stop sitting around thinking up objections and just get out there and GO. Start contacting those real estate leads, start making phone calls and sending postcards. You may not convert them all, but I guarantee if you put your all into following up with every single one of your real estate leads no matter what objections you may have, you will see a HUGE increase in your conversion rate. You just have to get in there and TRY.