“Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”

This is good advice as long as you don’t get so spread out that you are doing too many things but nothing with success. It’s important we understand the fine line between focusing on one niche without putting all your eggs in one basket, (so to speak).

To simplify the term real estate investing, there are really only three ways for investors to make money in real estate:

1. Real Estate Appreciation and Equity
2. Cash flow while you own it
3. Assignments: Payment when you flip a real estate contract without owning it.

So where do you start? Let’s try to answer this question on every aspiring real estate investors mind. Since real estate investing encompasses so many types of exit strategies or I like to call profit centers, it’s important to study and pick those you are most passionate about. In my Coaching U2 Profit Your Way training I thoroughly teach on over 24 profit centers, otherwise called exit strategies. The following is a summary of ten of the most popular real estate investment strategies with their advantages and disadvantages.

1. Rentals or Cash flow Investment Property: These types of investment properties are the ones which generate rental income. These are mainly apartment buildings and rental houses.
• Advantages: One of the easier ways to get started, and good long term return on investment while also earning monthly income.
• Disadvantages: Risk of not renting property leaving you with the mortgage payment and no income. Property management can be a challenge. You typically will wait awhile to sell your property so payoff is slow.
2. Lease Option. This is when you buy a property, then sell to someone else via a rent-to-own arrangement.
• Advantages: You get higher rent, and the buyer is usually responsible for maintenance. Cash flow can be good.
• Disadvantages: Most rent to own buyers don’t complete the purchase (this can be an advantage too, but it does mean more work for you). Bookkeeping must be done properly and can be complicated.
3. Fixer Upper Investment Property. These types of investment properties are the ones which are in ugly condition and need renovation. These properties can be acquired to flip after fixing-up quickly or held to rent out.
• Advantages: You can receive a quick return on your investment (months). You usually get below market value pricing on properties bringing you instant equity.
• Disadvantages: Higher risk. (Many unpredictable expenses come up in construction). You get taxed heavily on the gain when you sell in under a year.
4. Vacant Land. Many options including just holding while appreciating. You can also split it and sell it.
• Advantages: History has shown that land always appreciates in value (it’s the buildings on the land that go down. It is simpler than most real estate investments, with the possibility of great profits.
• Disadvantages: It can take a long time to increase in value. You have expenses, but no cash flow while you wait unless you sell the contract before closing.
5. Commercial Real Estate. These are any building containing 5 units or over and/or buildings sited for commercial use.
• Advantages: Long term triple-net leases mean little management and high returns. Lending is usually based on the value of the property vs. personal credit.
• Disadvantages: Commercial property valuation requires a more complex method, taking into account the income potential of the property. This is recommended for the more experienced investors as there is a lot more involved to set up and maintenance.
6. Buy property with Forced Appreciation. Buy in the path of growth and holding until values rise. For instance buying a lot in a residential development prior to roads being completed.
• Advantages: Can yield large profits, especially if you buy low to start.
• Disadvantages: Future price is not predictable – the market can turn, the developer can go out of business. You have expenses with no income while you’re waiting.
7. Preconstruction Investment Property: These types of investment properties are acquired directly from a developer before the construction or renovation is completed.
• Advantages: Low money out of pocket to tie up property while being built. If purchased in appreciating markets, you make money in equity at closing and can instantly re-sell at a profit.
• Disadvantages: You can’t always predict what a market is going to do. If market depreciates, you have lost money. Also higher tax rates in selling quickly.
8. Pre-Foreclosure Investment Property: These types of investment properties are the ones which you buy from sellers who are behind in their payments and may lose their property to the bank via foreclosure.
• Advantages: You have opportunities to buy properties at below value pricing – “Instant equity”.
• Disadvantages: Legal liabilities are higher. Finding these properties requires a lot research and footwork to find a deal that works. You can do all the work and still not have a deal with enough equity to profit after expenses to sell, (taxes, realtors, etc).
9. Assignments: This strategy has you get into a property at a discount, preferably with a known buyer in place before you commit to your purchase. After you are in contract to purchase a property, you would sell your contract for a fee to someone else. For example you get into purchase contract to buy a $120K property for $100K. You turn it to an investor for $110K and profit $10K cash without the cost and hassles of ever closing on the deal.
• Advantages: This is a great way to make quick cash with low or no upfront investment, low risk and fewer headaches from closing and ownership. This strategy creates a win win win outcome for everyone involved.
• Disadvantages: This will only work if the property you are buying has equity so that you may buy it a discount. In declining markets, this type of property is harder to find. Also when dealing with banks on REO’s or Short Sales you will find they will not allow you assign your contract. However, there are ways to get around this if you plan and handle the contract correctly up front.
  Do you want to know how I have managed to get around not being able to assign a contract? I have purchased properties in the name of an LLC set up exclusively to buy properties. I then sold the LLC to someone, making them the owner of the LLC, therefore making them responsible for closing on the purchase contract and end buyer of the property.
10. Flipping - Wikipedia defines Flipping as is a term used primarily in the United States to describe practice of buying an asset and quickly reselling (or “flipping”) it for profit ..

This description pretty much explains property flipping, with there being a slight difference from that description of flipping assets. In real estate you can get into an agreement to flip a contract you have gotten into before you even buy it. This can be done with ease when you know exactly what your buyers want and with no money out of your pocket utilizing transactional funding. Flipping can also mean closing and quickly reselling your property, sometimes even doing both transactions the same day – this being subcategorized a “double closing”.

• Advantages: My favorite strategy. You work the deal backwards. You create relationships with buyers who can close quickly with cash, (I mentioned earlier there is a system that does this for you at www.CashBuyers4Flips.com ). Then you find a property meeting the needs of your buyers. This strategy allows you to profit literally from no money down, with lower risk and very little of your own time.
• Disadvantages: The law requires you to disclose your intent to resell quickly to sellers. When dealing with banks, this can sometimes cause your offer to be rejected. You must buy properties in the name of an LLC in order to utilize transactional funding. Setting up and maintaining an LLC will cost you money. Though the intent of a buyer might be to close on the transaction, sometimes “life happens” and something causes the buyer to be unable to follow through. You may have to walk away from earnest money if you cannot find another buyer quickly

Now that you that you have learned strategies to consider, you will need to consider the type of properties you want to go after, developing a marketing strategy to find motivated sellers of those deals. Over the next months I will be sharing steps and strategies on how to profit investing in real estate 12 different ways.

Please leave a comment if you have anything you would like add to what I have written here with the heart to support fellow real estate investors. (Any solicitations for business will not be published) I appreciate the feedback!

(I would like to know your ideas and feedback.
Click the “Leave Your Comments” link to the right)

“It isn’t just what you know, and it isn’t just who you know.
It’s actually who you know, who knows you, and what you do for a living.” Bob Burg

Do I have to Network to succeed in Real Estate?

Yes!  I know you may have wanted a different answer, but this is the honest truth. Networking is such an important part of your business. You must introduce yourself and let others know what you are doing. Everyone can be a referral resource for you… and you for them.  The best book I’ve read to help me to become more comfortable with the idea of networking is called ‘How to Win Friends and Influence People’ by Dale Carnegie. It’s a great book that helps you to understand why you need to network with others as well as teaching you exactly how and what to say when you meet with new contacts.

Throughout my own 30 years of owning several businesses, (W0W – Am I that old?!), I can honestly say personal networking has been the most effective … and the most fun way to market myself!  Of course, my belief in the power of networking is reflected as I founded a networking group called Women’s Success Group, (a nonprofit networking group benefiting our Women’s Center since 1998), and now putting together the Investor Community of Central Valley.

How to  Network Your Way to REI Success

As a real estate investor, where can I reach out to network my business

1)      Search Real Estate Investor Clubs in Your Area.

2)      Check meetings and trainings for local Real Estate Associations.

3)      Check meetings and trainings at local Title Companies.

4)      Check on handyman, builders and contractor associations in your area.

5)      Ask everyone you talk to for referrals for networking events that have worked for them.

6)      Of course chamber events and networking clubs that meet at breakfast and lunch are a general source to get to know the general public.

What do I say?
Just remember the acronym F.R.I.E.N.D.S.

I know the biggest fear and reason many people don’t attend networking events is they don’t know how to approach or what to say to others when first meeting them. I am going to give you a script that will be easy for you to memorize…

For every person you come in contact with at any type of networking meeting, your conversation might go something like this:  Just remember the acronym FRIENDS:

F F is for Forthright. Be forthright in reaching out and saying hi.  Don’t wait for others to come to you.

• “Hi there, my name’s __________.  What’s your name?”

R R is for Remember.  You need to first always remember to ask them their name.

• Ask for their card – and them hand them yours.

I I is for Income.  Ask them what they do for a living? How do they make their income?

• “Say their name, and ask “What is it that you do?”

E E is for Everyone. Everyone likes to talk about themselves.

• Ask questions like, “How long have you been doing this?”  or “What do you like most about what you do?”

N N is for New Business. No matter if the person you are talking to has an occupation that is real estate related or not, you will want to find ways you both can support each other .

• Ask : “What sort of clientele could I refer to bring you additional new business?

D D is for Determine.  After listening for possible ways to support each other, Determine where to take this relationship from this point.

S S is for SUMMARIZE: When the time comes to share what you do, be prepared! Have a 30 second summary of what it is you could say to leave an impression on your new friend.

1)      Hand everyone you network with your card.

2)      Summarize your business in 30 seconds or less.  This is where spending time writing down how you want to market you and your business is important. You want to be concise and clear in describing what you do and what types of referrals would be most helpful.  Try to incorporate something that differentiates you from the rest?

SAMPLE: REI 30 Second Commercials

When Networking
ALWAYS REMEMBER these 6 things…

1. The important thing is that you are interested in what they do for a living.
2. Don’t talk about yourself until asked or the timing is right.
3. Ask them questions about their occupation and how you can be of support to them in their line of work.
4. If this person is a potential power team member for you, ask if you could contact them in the future. (You would be able to follow your list of questions for power team members and take notes when you called them back)
5. Make sure to collect a card from everyone you meet
6. Make sure you have their email address, fax, cell, and correct spelling of first and last name. (Write on the back of the card if any of this information is missing – it shows your interested!)

Questions To Ask When You Meet Real Estate Investors

• “Do you buy, fix and sell or do you buy and hold?”

• “How many properties do you own and/or have you sold?”

• “What part of town do you invest in?”

• “Really, why that area?”

• “What do properties cost in that area?

• “Do you pay cash for them or what banks do you use that are investor friendly?”
• “What title company do you enjoy using the most?”

• “Do you know any of the other people here?”

• “Who are the big investors in this area?”

• “If you ever come across some good deals and you don’t want them let me know.”

• “By the way, do you have any property you want to sell?”
• “We sometimes have properties for sale as well, if you’re looking to increase your inventory.”
• “Well, Mr. /Ms. Investor based on what you told me and where you prefer to buy; if anything comes along I’ll make sure to call you first”.

Final Important Points To Maximize Your Networking

Always write notes on the back of business cards you collect, helping you remember the next steps you will want to take with this contact in the future.  Often times, just a “nice meeting you” card in the mail or email can be seen as a memorable gesture encouraging future communication to support each other’s business needs.

Networking should be a part of everyone’s marketing plan.
ATTEND, JOIN, PARTICPATE, etc…
Whatever you want to call it…

…the important thing is to have fun

… as you get in front of people and

NETWORK YOUR WAY TO REI SUCCESS!

www.investorcommunityofcentralvalley.com

Article written by Tamera Aragon www.tameraaragon.com

Originally posted 2010-01-22 17:18:45. Republished by Blog Post Promoter

Read this article from The New York Times
and let me know what you think!

DALLAS – When Congress passed an $8,000 tax credit for first-time home buyers last winter, it was intended as a dose of shock therapy during a crisis. Now the question is becoming whether the housing market can function without it.

As many as 40 percent of all home buyers this year will qualify for the credit. It is on track to cost the government $15 billion, more than twice the amount that was projected when Congress passed the stimulus bill in February.

In the view of the real estate industry and some economists, all that money is well spent. They contend the credit is doing what it was meant to do, encouraging a recovery in the housing market that is gathering steam. Analysts say the credit is directly responsible for several hundred thousand home sales.

Skeptics argue that most of the money is going to people who would have bought a home anyway. And they contend that unless it is allowed to expire on schedule in late November, the tax credit is likely to become one more expensive government program that refuses to die.

The real estate industry, including the powerful 1.1 million-member National Association of Realtors, wants Congress to extend the credit at least through next summer. The group hopes to expand the program to $15,000 and to allow all buyers, not just those who have been out of the market for at least three years, to qualify. The price tag on that plan: $50 billion to $100 billion.

‘A no-brainer’

Joseph and Chassity Myers are among the two million buyers eligible for the credit this year. The newlyweds heard they could get money from the government for something they were tempted to do anyway.

“It was a no-brainer,” said Mr. Myers, a commercial underwriter. “Owning something is the American family dream.”

The couple bought a two-bedroom condominium here in the spring for $171,000 and amended their 2008 taxes immediately, receiving their windfall by direct deposit a few weeks later.

Their home is now a monument to the government’s generosity. They bought a leather couch, a kitchen table, a bed, television stand, china cabinet, kitchen table, coffee table, grill and patio set.

“We did exactly what the government wanted us to do,” said Ms. Myers, a third grade teacher. “We stimulated the economy.”

Expiration of credit looms
Mortgage applications increased nearly 10 percent for the week ending Sept. 3 from late August, the largest gain since early April and the latest of many signs of life in real estate. The upturn can be attributed to several factors: the return of confidence, very low mortgage rates, and prices in some markets that are at decade-low levels.

But the looming expiration of the tax credit on Nov. 30 seems to be playing a role too, particularly in relatively low-cost markets like Phoenix, Las Vegas and Dallas.

The 50-year-old complex that the Myerses live in, grandly named the Lawn at Bluffview, provides a snapshot of the credit’s influence — and limitations. Two years ago, the buildings were converted from apartments to condominiums by their owner, a local developer. In January, before the credit, only 30 of the 70 units had sold.

Since then, another seven units have sold, including the one bought by the Myerses. Brian Denbow, who works for a subprime auto financing firm, also was spurred to action by the credit. He too intends to use the money for furniture. Five of the buyers did not qualify for the credit for various reasons.

The Lawn at Bluffview remains nowhere near full. Potential buyers “just want a deal,” said the sales agent, Beverly Bell. Two weeks ago, the price of the unsold units was cut 10 percent.

The National Association of Realtors estimates that about 350,000 sales this year would not have happened without the lure of the tax credit. Moody’s Economy.com used computer modeling to put the number at 400,000.

The government’s efforts to directly reward home buyers began more than a year ago with a $7,500 tax credit that had to be repaid over 15 years. Last winter, amid fears of another Great Depression, the Senate came up with a much sweeter $15,000 package as part of the stimulus bill. That measure was ultimately reduced to the $8,000 credit.

Now the sponsor of the original Senate bill, Johnny Isakson, Republican of Georgia, is back with a new bill that would give a maximum $15,000 credit to any buyer who stays in a home for at least two years.

“The problem now is not first-time buyers, it’s the move-up market — the guy transferred from Chicago to Atlanta who can’t sell his house,” said Mr. Isakson, a former real estate agent.

Without a new and more generous credit, he warned, there would be a downward spiral of home sales and more foreclosures, provoking a second recession.

The real estate industry is lobbying heavily for the bill, but acknowledges that in an atmosphere that is less crisis-driven than last winter it will almost certainly have to settle for less.

“There will be a lot of water under the bridge, a lot of compromise, between now” and a final bill, said Richard A. Smith, chairman of the Business Roundtable’s Housing Working Group.

Divided
Economists are sharply split on the merits of another round of government help.

Mark Zandi, chief economist of Moody’s Economy.com, favors expanding the credit to all home buyers, even investors, into next summer. “The risks of not doing something like this are too great,” he said. “I don’t think the coast is clear.”

James Glassman of JPMorgan Chase echoed those views but said he favored continuing to restrict the credit to first-time buyers.

On the other side of the issue is the Tax Policy Center, a joint venture of the Brookings Institution and the Urban Institute. It labeled the original credit as one of the worst provisions of the stimulus package, on the grounds that the money is a bonus for people who would buy a house anyway. The center has an even dimmer view of extending the credit to all buyers.

“Is this the best way to spend money we don’t have?” asked senior fellow Roberton Williams.

Dean Baker of the Center for Economic and Policy Research called the credit “a questionable redistributive policy” from renters to home buyers, but said that he used it himself when he bought a house.

He wrote on his blog: “Thank you very much, suckers!”

This article, “Fight Looms in Congress on Tax Break for Home Buyers,” first appeared in The New York Times.

Tamera Aragon
REI Success Trainer and Coach

www.CoachingU2Profits.com

Originally posted 2009-09-16 13:28:07. Republished by Blog Post Promoter

If there are people you know who act on and talk about and assume certain things about you that are not in line with who you want to be … and what you want to accomplish – whatever they are – then you might be feeling like you are walking through life in quicksand. You are fighting to hold your head high but feeling pulled down.

Now imagine what it would be like if you turned it around and began hanging out with people who already have what you want and have the success traits that you aspire to duplicate?

Imagine….

Do you feel that load being lifted? Do feel that feeling of self – empowerment?

I have found that surrounding myself with giving, caring, supportive, successful, positive, happy and motivated people has been the number one reason for the contentment and peace and yes…success… in my life.  The fact is some people make you feel better, lift you up, inform and entertain, while others seem to be on a mission to depress, annoy, and enrage. Sorting the edifying from the toxic is a habit to get into early and often!

Here are a few tips to Build a Positive Circle of Friends and Associates:

• Read and follow people who inspire or motivate you
• Surround yourself with positive influences rather than people who bring you down
• Do not get drawn into protracted debates or arguments
• Block people who routinely aggravate you
• Avoid scenarios where you get drawn into negativity
• Seek out people who are succeeding at what you want to do and observe how they behave and think
• Find the learning opportunity in every interaction

“Your choice of people to associate with, both personally and business-wise, is one of the most important choices you make. If you associate with turkeys, you will never fly with the eagles.”
Brian Tracy

What You Can Do?
Ask yourself; are there any turkeys in your life?  Ready- Aim – Set them free…..

There are 3 things you can begin doing immediately to help in this area:

1. Take a look at your current relationships and determine whether they are supportive and enriching or toxic and destructive. A clue here is to examine how you feel about yourself when around various people.

2. If you identified any relationships which are not mutually supportive and do not empower you, or that drain your energy and make you feel bad about yourself, take steps to distance yourself from the people involved – FAST! This is a stumbling block for many people – the crossing of the bridge between what they know, and what they say they want. It’s not easy to leave familiar things behind, especially people, and this is a real sticking point. It may not be comfortable at first, but neither is hanging out with “turkeys”.

3. Make a plan to change yourself. Become the giving, positive, motivated, success focused person you want others to be and concentrate on developing only relationships which are enriching, supportive and empowering of this side of you!

4. Join groups, clubs, classes etc where the people who have your interests are most likely to be. Be pro-active in sending out invites to new people to get to know them.

5. Take a super successful person to lunch once a month. Tell them you are looking to get to know eagles and you see them as someone you would like to get to know. At lunch, ask that person what they think are the key(s) to their success.  Get to know them. And most importantly, ask if there is anything you can do to support their goals.

6. Be a Giver of acceptance, affirmative words, encouragement and avoid dragging others down with negative words and your own bad attitude.  You will have more people wanting to be in your circle than you have enough hours in the day for.

“The only way to have a friend is to be one.”
– Source Unknown

The bottom line is this – if there are people in your life that drain your energy, make you feel badly about yourself or hold you back, then you must take appropriate action… and quickly!  I’m not saying the transition will be easy for you. However, in the big picture this change will impact your life more dramatically than any other.

Another one of my favorite inspirational quotes is from Charles DuBois, who said:

“The important thing is this: To be able to sacrifice what we are for what we could become.”

By Tamera Aragon

Fly with the eagles and be free!

Originally posted 2010-06-24 09:00:59. Republished by Blog Post Promoter

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Watch this movie House Wars: The Investor Strikes Back!

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Reserve your Webinar seat now at:

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Originally posted 2009-10-16 13:56:15. Republished by Blog Post Promoter