| Have you ever wondered why some real estate | | | | know exactly how you are going to make your |
| investors seem to make it all look so easy? We | | | | money from it. It could be as a rental for which |
| have all heard the stories about how one investor | | | | you should have a positive monthly cash flow. It |
| made over $100,000 in a week by flipping a | | | | could be as a rehab and flip for a profit. Or |
| house. Or maybe about how another one bought | | | | maybe you may offer it as a lease with an option |
| a multimillion dollar apartment complex and walked | | | | to buy. Or, it could be hold for the equity growth. |
| away with cash at closing. | | | | Run your numbers for each strategy. If the |
| So how do these people do it? And is it | | | | numbers don't work, don't do the deal no matter |
| something the average person off the street can | | | | how much you like the property! |
| learn to do? Well, those are some of the same | | | | 7. Treat Your Agents Like Gold |
| questions I had when I first started in the | | | | Real estate agents can make or break your |
| business. So I spent months of research and tens | | | | business and a good one is worth their weight in |
| of thousands of dollars to learn what strategies | | | | gold. They will do much of the legwork for you |
| these successful people use that the rest of us | | | | and bring you potential deals. They know their |
| do not. What follows is a brief summary of what | | | | areas inside and out and can steer you away |
| I learned. Some may surprise you, others may | | | | from potential problems. They will even find you |
| not. However, I found these to be common | | | | buyers for your properties as well as show it |
| words of wisdom from every successful investor. | | | | while you are out looking for more deals. And, |
| 1. Real Estate Investing is a Business, Not a | | | | they work only for commissions based on the |
| Hobby | | | | sales price of properties that sell. |
| Every successful real estate investor I know | | | | However, most real estate investors don't buy |
| operates their endeavors strictly as a business, | | | | and sometimes don't sell property at full market |
| even if it's just a part-time thing. This means | | | | prices. This could directly affect your agent's |
| setting up a Corporation, S-Corp, Limited Liability | | | | commission and their motivation to support what |
| Company, Limited Partnership, General Partnership, | | | | you want can diminish. I suggest paying your |
| or typically some combination of these entities. | | | | agents commissions based on market price |
| Notice I didn't mention Sole-proprietor? Talk to a | | | | regardless of the ultimate sales price. Yes, it may |
| knowledgeable real estate attorney in you area | | | | impact your profits some but you'll have a very |
| for a better idea of which ones are right for you | | | | loyal agent. And guess who gets the first phone |
| and your goals. Not only will the right entities | | | | call when hot property comes up! |
| protect you and your ASSets, but will allow you | | | | 8. Don't Be A Hog |
| to take advantage of certain tax advantages you | | | | The old saying goes, "Pigs get fat, and hogs get |
| would otherwise not have. If you stop reading | | | | slaughtered." The saying holds true in real estate |
| here and take no other advice from me please, | | | | investing as well. Many new investors make the |
| please do this one. | | | | mistake of trying to squeeze out the maximum |
| 2. Build A Team of Experts | | | | profit out of every deal and then wonder why |
| Few, if any, business owners succeed without a | | | | they can't find any buyers. Don't be afraid to |
| team of experts to guide them. These people can | | | | leave something on the table for the next guy, |
| save you a tremendous amount of time and | | | | especially if you're selling to other investors. It's |
| money and possibly even legal problems. Your | | | | better to make a lot of smaller profits over and |
| business team should consist of a good real | | | | over than it is to make one big profit. This |
| estate attorney who understands the state laws | | | | strategy should have potential buyers lining up at |
| and an accountant. I recommend finding an | | | | your door when you have a property to sell. |
| accountant who is also a real estate investor if | | | | 9. Give Away 10-15% of Everything You Make |
| possible. | | | | I can hear you now, "He said what?!" That's right, |
| You should also have a realtor in each area you | | | | give away 10-15% of everything you make. How |
| are considering investing in, an appraiser, a home | | | | you decide to do it is up to you, but I warn you, |
| inspector, an escrow company, a mortgage | | | | you may have to get creative. Steve, a mentor |
| broker, other investors, a general contractor, and | | | | of mine follows this rule like a religion. In fact, on |
| an insurance agent. There are other specialist | | | | his very first deal he made about $5,000 which he |
| would should also consider for special cases such | | | | need desperately, since he had recently lost his |
| as an architect, a surveyor, environmental | | | | job. He was nearly bankrupt but still decided to |
| company, etc. | | | | give away some of his profits. He decided to buy |
| 3. Have a Plan | | | | his pastor a new suit, something he had never |
| Develop a business plan for your real estate | | | | had in his life. Even though Steve was excited |
| investing venture even if you are not new to it. | | | | about making the money, the look on his pastor's |
| After all, this is a business and few really reach | | | | face when he wore it for the first time made him |
| their potential without a good plan. I promise you, | | | | feel ten times better. By the way, word got |
| spending a few hours putting it down on paper will | | | | around very quickly and before you know it, he |
| be well worth it. And it's always good to revisit | | | | had three more deals in the works that profited |
| your plan often to keep you on target. | | | | much, much more. |
| 4. Network, Network, Network | | | | 10. Offers, Offers, Offers! |
| Real estate is people business. If you haven't | | | | You'll never make any money if you don't first |
| done so already, get good at smoozing. Now I | | | | start with an offer. But for some reason, this |
| don't mean the used car salesman type where | | | | seems to be the biggest hurdle for most new |
| you do all the fast talking. Join your local real | | | | investors. I like to use the "Fire, Aim, Ready" |
| estate investment club, become a member of a | | | | approach to making an offer. Don't spend a lot of |
| church if you aren't already, volunteer with Habitat | | | | time trying to figure out what the perfect offer |
| For Humanity, just get involved! Get to | | | | will be, just make one. Most of my offers are |
| understand what the seller's or buyer's needs are. | | | | made without ever having seen the property. |
| This means listening! Get to know what other | | | | Remember, if the first offer doesn't embarrass |
| investors are looking for and who the local | | | | you, it's too high. I know of a very successful real |
| "players" are. You may be able to do a | | | | estate investor in the Tampa area who once |
| partnership on a deal or refer them to a deal that | | | | offered $1 for a $14 million golf course! Okay, so |
| may not be exactly what you're looking for. | | | | he eventually bought it for a little over $2 million |
| Above all, treat everyone you meet with respect | | | | and the resold it a couple of weeks later for a |
| whether they're your team, sellers, or buyers and | | | | tiddy profit. It's only after you have the property |
| they will respect you. If you do these things, | | | | under contract that you should spend the time to |
| more deals will come your way than you can | | | | determine if the price is right or not. Most |
| possibly handle. I can think of a lot worse | | | | successful investors will make 25 or more offers |
| problems to have! | | | | a week of which maybe only two or three may |
| 5. Know Your Market | | | | eventually end being accepted. Of those, maybe |
| Spend some time getting to know the areas | | | | one will make it to closing. But let's see, one deal a |
| where you plan to invest. Go to some open | | | | week, $5-10,000 profit each....you get the picture. |
| houses and talk to the agents. Drive the | | | | 11. Have Fun |
| neighborhood and look for the "For Sale By | | | | Like any business, real estate investing has its |
| Owner" signs otherwise known as FSBOs. Look | | | | challenges. Sometimes deals fall through at the |
| for homes that appear vacant or in disrepair. | | | | last minute, renters can be a real pain, or you find |
| Learn how much homes go for in the area and | | | | out about the sewer line collapsing at one of your |
| what the local trends are. Talk to some the local | | | | properties that needs $15,000 in unexpected |
| residents and learn what the community is like. Is | | | | expenses to fix it. There will always be obstacles |
| there crime in the area, how good are the | | | | to overcome but the rewards can be well worth |
| schools, is the area growing, what are the local | | | | it. So have fun with it! If you truly enjoy it, it will |
| demographics? This information will serve you well | | | | show on you and suddenly the problems don't |
| when it comes time to invest. | | | | seem like such a big deal anymore. |
| 6. Never Buy A Property Without At Least One | | | | There are many more tricks to the trade |
| Solid Exit Strategy | | | | depending upon which niche you decide to invest |
| In real estate, you make your money when you | | | | in. But the basics are the same across the board. |
| buy, not when you sell. So what am I trying to | | | | Apply these secrets and you too can become the |
| say here? For each offer you make, you should | | | | next multimillionaire! |