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10 Rules of Successful Real Estate Investing

10-Rules-Successful-Real-Estate-Investing

I came up with the following rules of successful real estate investing over my many years of successes and failures. These are the same rules I follow today and share with our clients at Norada Real Estate Investments.

1. Educate Yourself

Knowledge is the new currency. Without it you are doomed to follow other people’s advice without knowing if it’s good or bad. Knowledge will also help take you from being a “good” investor to becoming a great investor, and that knowledge will help provide a passive stream of income for you or your family.

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Top 10 Real Estate Investing Books

There are literally thousands of books on real estate investing.  I myself have one of the largest collections of them known to mankind!  But seriously now, I do own a rather large bookshelf jammed full of real estate books, tapes, CDs and DVDs.

So I thought I would share my top 10 real estate investing books with you.  That’s not to say that I only have 10 favorites, because I could easily add another 10.  But for those of you looking for some good book recommendations they are:

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Inflation, Low Rates, and Home Appreciation

The combination of inflation and low mortgage rates usually leads to much higher compounded rates of home appreciation.  For owners of property, high rates of inflation and appreciation are welcomed and appreciated.  For buyers or tenants, however, the skyrocketing purchase and rental prices are not liked much at all.

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Demographic Strategies for Real Estate Investors

Sweeping changes in the nation’s demographic makeup will have profound effects on the nation’s housing industry, according to “Big Shifts Ahead: Demographic Clarity for Businesses,” a new book by authors John Burns and Chris Porter.

They argue that broad demographic shifts will reshape housing in America in the next decade, creating new opportunities for businesses of all kinds.  Rising numbers of female executives, affluent immigrants, growing numbers of younger and older workers and a ballooning retiree population will have a profound influence on residential real estate in the U.S. over the next 10 years, according to Burns and Porter.

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17 Things Very Successful People Never Stop Doing

Think about the most successful people you know.  Here are 17 things I’ll bet they’re constantly doing.

Think of the most successful person you know.  Maybe we’re talking about a work colleague or a mentor.  Maybe this is someone you knew growing up or in school — and you can’t believe how much he or she has achieved since then.

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The Greatest Real Estate Advantage

Ignoring the fact that stocks, bonds, mutual funds, and other investments are either over-valued or providing negative real returns, real estate has almost always been the best use of capital specifically because of your ability to leverage your investment.

If used properly, leverage will significantly enhance your return on investment.  This is easy to do if you invest in income-producing real estate but much more difficult, if not impossible, if you’re investing in stocks or mutual funds.

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The Secret of Financially Happy Couples

We are all too familiar with the sobering statistics on marriage.  Around 50% of marriages end in divorce, and oftentimes the root of all that unhappiness is money.

But there’s some good news on the horizon.  According to a recent study by Ameriprise, “a remarkable 77% of American couples report they are on the same page with their finances.”

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The Four Profit Centers That Make Real Estate The Most Powerful Investment

The Four Profit Centers That Make Real Estate The Most Powerful Investment

You’ll often hear people say that they don’t like real estate because if you look at the long-term returns of the stock market, it seems to have a better return over the long-term.

Of course, when they say this, they are leaving a few key things out.

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How to Choose the Best Market for Your Real Estate Investment

How to Choose the Best Market for Your Real Estate InvestmentSuccessful real estate investing relies on several factors, but as the old adage goes, “location, location, location” is top of the list.  But “location” is a broad term, and evaluating the right place to invest your dollars in real estate means identifying the right market in both the macro and micro senses.

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You May Be A More Important Real Estate Investor Than You Think

Small is Big!

If you own one investment property you are a significant investor and contributor to the American economy.  The engaged (as opposed to “aspiring,”) real estate investor population is estimated to be at 11.1 million individuals and companies.  Together this tier of investors owns $3.1 trillion in single-family residential (SFR) asset value representing 13.3 million homes.

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Personality Types and Real Estate Investing

A few years ago, I was chatting about financial freedom with a close friend.  My friend was very interested in becoming financially independent, and really wanted to discuss how she could increase her wealth.

However, when I shared my journey to financial independence, she had a lot of reservations.

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How Trump’s Presidency Could Impact Real Estate

How will the real estate market be impacted by Donald Trump’s victory and Republicans controlling both chambers of Congress?

Though Mr. Trump is a real estate man, his policy platform has been largely vague on real estate proposals.  Here are my thoughts on how certain real estate issues may play out under President Trump and of their potential impact to consumers.

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Myths and Fallacies That Limit Financial Liberation

Financial liberation is beyond most people’s reach because of the following four myths and destructive mind-sets:

1. The Retirement Myth
2. The Financial Freedom Myth
3. The Entitlement Mentality
4. The Fallacy of “Someday”

The Retirement Myth

The retirement myth is the idea that the purpose of life is to work for thirty years, save enough money, and then stop working and live off one’s savings. This destructive myth causes many people to stay in jobs they don’t like and that don’t allow them full expression of their best talents. It makes us sell our “birthright” for a “mess of pottage” in the form of golden handcuffs and benefits. It often leads to small lives built around limited dreams.

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Understanding the Checkbook IRA and Its Benefits

When it comes to retirement savings, we all do wish for the same amount of investment freedom that we usually get with our other investments.  Traditionally, most of the financial institutions offer limited investment options, starting with stocks and bonds to mutual funds and CDs only.

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Owning Property “Free and Clear”

For some investors, the goal is to own properties “free and clear,” that is, with no mortgage debt.  While this is a worthy goal, it does not necessarily make financial sense.

For example, consider a $100,000 property that brings in $9,600 per year in net income (net means gross rents collected, less expenses, such as property taxes, insurance, maintenance, and property management).  The $100,000 in equity thus yields a 9.6 percent annual return on investment ($9,600, the annual net cash flow, divided by $100,000, the cash invested).

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1031 Exchange Rules Every Real Estate Investor Should Know

Taxes rarely make for exciting reading material, but if you own an investment property, there’s at least one set of IRS regulations you absolutely will want to understand: 1031 exchange rules. Why? Because normally when you sell an investment property for more than what you paid for it, you’d have to pay a hefty capital gains tax.

But with a 1031 exchange, you get to defer paying those taxes if you reinvest the proceeds in a new property, making an “exchange” rather than a sale. It’s just that this transaction is subject to some strict regulations, so you’ll need to follow the 1031 exchange rules to the letter.

Here’s what you need to know to pull it off.

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Are Low Appraisals Back?

Three things you can take to the bank:

  • Politicians will bend with the wind,
  • Property taxes will never decline, and
  • Rising home prices will increase low appraisals.

It’s no surprise that complaints that appraisals are once again killing too many sales are once again on the rise this summer.

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