Archive for the 'Getting Started' Category
With real estate, people often don’t understand how an investor is paid. I mean, stocks historically provide an annual rate of return of about 10% and are low hassle. Comparatively, real estate values historically only return about 5% annual appreciation…and with more hassle! Right? So then how can real estate be a good investment? Once you know the answer to this question and act, wealth creation begins. I’ll start showing you how right now.
When I tell people that I am a real estate investor, or that I work at a real estate investing firm, one of the first questions they ask me is: “oh, do you flip houses?”
The question gets a little annoying after a while but I understand why people ask it – it’s because most people’s knowledge of real estate investing comes from what you see on television, and flipping shows are everywhere on TV.
So when I tell people what kind of investing I really do, I get a lot of blank stares as they try to fit what I do into their paradigm of “real estate investing”.
1. It’s not how much money you make that matters, it’s how much you keep.
2. Don’t let friends, family, or co-workers talk you out of real estate investing unless they have more money than they know what to do with. If that’s the case, do what they’re doing.
3. Free contracts are worth what you pay for them. Have your contracts approved by an attorney who will defend them in court. If you have to ask why, you’re new to the business.
Single-family homes have the widest market appeal.
In a softening marketplace, real estate that houses jobs (retail, office, etc.) will generally show rental weakness before the real estate that houses people (single family homes). Changes in job indicators give investors in single-family homes opportunities to re-position faster than investors in commercial property can.
A minister once gave a lecture titled “Acres of Diamonds.” He related the story of an Arab man who wanted to become rich. Informed by an old priest that he would find diamonds in “a river that runs through white sands, between high mountains,” the man sold his farm and set off on his quest to find diamonds.
Please read part 1 of A Balanced Life.
Most people are time wasters. They waste their own time, and they waste your time as well. To be successful and happy, you must discipline yourself to work all the time you work. The average employee works at about 50 percent of capacity. Fully 80 percent of people working today are underemployed in that their jobs do not really demand their full capacities. Only 5 percent of workers surveyed recently felt that they were working at the outside limits of their potentials.
I just returned from a long-overdue two-week family vacation in Thailand. It was amazing! I recommend adding it to your bucket list.
Being there gave me some time to think about life’s priorities and how to better balance my life. So this week I want to share something a little different with you in our newsletter…
When it comes to real estate clichés, “Location, location, location” has all other contenders (including “Not a drive-by!”; “Cash is king!”; “Is that your checkbook or are you just glad to see me?”; and “Worst house, best street”) beat by a mile.
Not only has it been in use since at least 1926 (according to the New York Times), but it’s utterly and in-arguably true.
Gold has been in demand for many years. It has been associated with affluence and is usually represented as ostentatious jewelry. And unlike other precious metals, gold remains assessed at a high value. A regular Apple Smart Watch will cost you $349 to $399. But an 18 karat gold edition Apple Smart Watch will set you back $10,000 (USD)!
Many people would probably say gold is the best investment in the market. Those who do are not aware that investing in real estate is better than investing in gold!
Once you learn how to analyze where your market is and the direction it’s probably going, then you can plan your investment attack.
Certain strategies work well in a rising market, others work better in a flat or falling market. Many strategies work in any market, as long as you know your market and adjust your investing accordingly.
Here are some of your options:
Archimedes made the comment, “Give me a lever long enough and a fulcrum strong enough, and I can move the world.” Leverage is a method that allows you to control properties with little cash.
Children learn by asking questions. Students learn by asking questions. Investors learn by asking questions. People who think that they know it all no longer ask questions – why should they?
The most successful people in life never stop asking questions because they know it’s the best way to gain deeper insights, solve problems, and achieve greater success.
When people ask, “Is it still a good idea to buy real estate now?”, there are often two underlying problems. First, is a loss of direction. Second, “The Stock Market Mentality.” Put simply, in the stock market, timing is all important. If you don’t sell today, tomorrow your stock may be worth 50% less. If you don’t buy today, tomorrow it may cost 50% more. Fun, adventure and excitement. Keep away from it.
Ever try typing your address into Zillow.com and wonder how the heck they value your home at $30,000 less than your neighbor’s that is smaller? Or type your address into Trulia.com and find it is $40,000 more than Zillow’s estimate?
The truth is, these sites are at best ballpark estimates and vary greatly depending on the market activity in your area of interest. These sites base their estimates on recently recorded sales from the county. What they do not take into account are things like condition, upgrades, and lot premiums paid for views or location. Within the same city there can also be value differences associated with the quality of schools, proximity to parks, recreation and shopping.
Regardless of where you choose to invest, there are two opposite ends of the investing spectrum when it comes to your involvement and required resources.
Do-it-yourself real estate investing puts all the risk and responsibility squarely on your shoulders. Typically that involves everything from sourcing the property, acquiring it, funding it, renovating it, managing it, selling it, and coordinating every other step in between.