Real Estate Investing LIES Unveiled

Let's get REAL about something - and quelch the LIES you have been told about Real Estate Investing!­

What I am going to reveal to you are some basic
truths about Real Estate investing - truths that may
totally affect the Real Estate investments you have
now - and certainly I intend to modify the way you
do Real Estate investing in the future.

Let's get right to it - and into the heart of the real
estate investing issue.

You have been programmed all your life to become
what you are today - from school, friends, relatives
and, yes, your parents.

Recent studies show that you are who you are now,
more from what you learned prior to age 8 than in
anything else you have learned since.

Now, that may surprise you, but it is true that what
you learned at the earliest ages affects the way you
make Real Estate investments today, and the type
of Real Estate investing success you will have going
forward!

Yes, that's a bit shocking.

You see, if you grew up in an environment where
you heard things like

"We can't afford it", "Be sure
you have saved enough and have the cash to buy it"
(i.e., never use credit), or numerous other phrases
that you now hear yourself saying (you know what
I'm talking about - those times you catch yourself
"becoming your parents"), it is because of your
early programming (from 0-8 years) and what you
were told about money, success, and life in general.

That is controlling your current income - and your
success - or lack of it...

The things you were told at that early, most
influential age, are now creeping out and affecting
how successful you are in business, in life and yes,
in your Real Estate investing.

THERE IS GOOD NEWS

The greatest thing about this fact - as horrible as it
seems - is that you can change the 'programming' -
you have the power to do it!

You can reprogram yourself in any way you want -
have anything you want - do anything you want.

All it takes is simply to 'reinstall' the right kind of
thinking.

And, it is easier than you might think!

One of the best ways to do that is to get a CD audio
set from someone you like to listen to - someone
that thinks positively and speaks of the life you want
to live. Many home study courses are available (yes,
including mine) that are designed to inspire and
motivate you, while they teach you the methods and
secrets of real estate investing.

Purchase one - listen to it, over and over - until you
hear yourself speaking that way, too.

You see, we are all simply creatures of habit and
environment - if we allow junk to get into our heads,
all we will ever say is junk coming out.

If all you listen to is the bad stuff in life (like the TV
news, most 'talk radio' shows, those TV 'real life'
shows that end up in fights - you know the ones.,
and even violent movies where the language is
nothing you'd ever expect to hear from your own
lips.), that is exactly what you will wind up sounding
like!

It is true - 'you are what you eat' - and that counts
just as much for what you put in your ears as it does
for what you put in your mouth!

If you spend your time around 'bar people', you'll
speak and act like them. Not that there's anything
wrong with that, as long as you made a conscious
thought that it is what you want, but I think you'd
be much more successful at Real Estate investing if
you were listening to a successful person teaching
you about Real Estate Investing!

Now, let's get right to the point about the various
methods and concepts you have learned about Real
Estate Investing.

You may call yourself a 'real estate investing expert',
but if you have to get up every morning and wonder
where your next check is coming from, you aren't
making real estate investments, you are being
employed in a Real Estate Investing JOB!

Yes, that's a hard-hitting statement.

You see, I want you to 'get real' with yourself and
simply admit it - Real Estate investing is when you
put money into a Real Estate investment and then
get some money out - 'real estate investing'
defined.

Yet, it seems that most people I meet want to
attend my real estate training or purchase my real
estate courses that have to do with 'No Money
Down' (NMD) real estate investing.

Now, that kind of talk just proves the point - you can
reprogram yourself to speak a different language -
even if it doesn't make sense!

A bunch of 'gurus' have told you over and over again
that 'No Money Down' is real estate investing - even
though you learned at an early age that 'invest'
means to put money into something and get money
out (see http://dictionary.reference.com/search?q=invest for other definitions - none of them say 'No
Money Down'...)

Now, it's not that 'NMD Real Estate investing' is all
bad - heck, my students and I make several
thousand dollars from these types of 'Real Estate
investing' transactions every year, too.

Just don't lie to yourself and say they are 'real
estate investments', we know very clearly that these
are simply 'earned income' from one portion of your
real estate investing business - the real estate 'job'
portion - earned while in transition from your
'corporate job' to your 'real estate investing job' and
on the road to true Real Estate Investing.

In other real estate investing articles, I cover some
of the methods and techniques you, too, can explore
while moving from your 'corporate job' to your 'real
estate investing job' and you'll learn some insider
secrets for taking that leap quickly.

What is Real Estate Investing?

The question, "What is real estate investing?" cannot be answered without considering first, it's textbook definition and then it's conceptual definition.

The Academic Definition

Real estate has been defined as land (or immovable property) along with anything permanently affixed to the land such as buildings, and investment is the act of using money to purchase property for the sole purpose of holding or leasing for income. It is safe to say then (combining both definitions) that real estate investing involves the acquisition of real estate (or investment in real estate) for purposes of generating income, making a profit, and acquiring wealth.

The Conceptual Definition

1. Leverage In contrast to stock investments (which usually require more equity from the investor), it is possible to leverage a real estate investment (heavily). With a real estate investment, you can use other people's money to magnify your rate of return and control a much larger investment otherwise not possible.
2. Tax Shelter Real estate investing provides tax benefits. There are yields on annual after-tax cash flows, equity buildup through appreciation of the asset, and cash flow after tax upon sale.
3. Non-Monetary Returns Real estate investment provides pride of ownership, the security that you control ownership, and portfolio diversification.

Real estate investing is not a bed of roses, though. Real estate investment does require capital, there are risks, and rental property can be management-intensive. On the other hand, the car you drive required capital, it involves risk driving, and it certainly requires management. The difference is that a car is not a source of wealth.

How to Become a Real Estate Investor

1. Develop a real estate investment goal. What do you want to achieve, and by when do you want to achieve it? What rate of return do you expect to want to receive on moneys you pull out of your home or bank account to purchase an investment property given the risk?
2. Learn what returns you should look for, and how to compute them. You cannot succeed in music unless you can read music. Invest in a good real estate investing course or real estate investment software where you can learn how to run the returns and compute the formulas.
3. Be wary of Get Rich schemes. There are many so-called gurus ready to teach you how to make millions with real estate investment property. But let logic be your guide; we believe that nobody who finds a gold mine publishes a map.
4. Create a relationship with a real estate professional that knows the local real estate market and understands rental property. It will not advance your investment objectives to spend time with the "agent of the year" unless that person knows about investment property and is adequately prepared to help you correctly procure it. Find an agent that understands real estate investing.

What is the conclusion? That real estate investing is a business about owning a piece of ground that, when researched and purchased sensibly by impartial numbers and careful management, and with reasonable goals and caution, will likely be more valuable tomorrow than it is today.

What You Can Learn When Taking a Real Estate Investing Program

Have you heard of a real estate investing program before? If you are looking into becoming a real estate investor, you may have come across real estate investing programs available both locally and online. Although real estate investing programs are a great resource for all hopeful investors, you may be wondering whether or not it would really be worth your time and money to take a course. To find the answer to your question, you are advised to examine the materials that most real estate investing programs cover.

Before examining what you may learn when taking a real estate investing program, it is important that you remember variance. Not all real estate investing programs are the same. Programs are designed for different levels investors and they are offered for different lengths of time. These factors may determine exactly what is taught in a real estate investing course. However, with that in mind, there are many common points that are covered in most real estate investing programs.

Many real estate investing programs introduce their students to real estate investing by providing background information on exactly what it is. Although you may already have a good idea what real estate investing is and what it is all about, this information may still prove useful to you. Unfortunately, many real estate investors get so wrapped up in making money that they often forget what real estate investing is all about. If you are relatively unfamiliar with real estate inventing, a real estate investing program can help to provide you with the information you need. If you are already familiar with real estate investing, the information learned can be used to help refresh your memory.

It is also common for a real estate investing program to cover investing in general, as well as apply it to real estate. Information on what properties you should target as a real estate investor, like properties that are in foreclosure or properties that are considered fixer uppers, may also be outlined. Detailed information on each of these properties, like what they are, as well as what to look for with them may be outlined as well.

Since a big part of real estate investing is being able to do something with the properties that you purchase, a real estate investing class should also cover this. For instance, many real estate investors fix up the properties they purchased and either try to resell them for a profit or become a landlord by renting out the property to tenants. A real estate investing program should give you information on each method, as well as tips on how to make each method work.

Perhaps, the most important thing that you could learn by taking a real estate investing course is what you shouldn't do. This information is important as it may prevent you from making many costly mistakes. Although many real estate investing programs are targeted towards beginners, there are some courses that are designed for more advanced or experienced investors. No matter what level you are currently at, you are advised to give a real estate investing program a serious look, as it may be worth your time and money, in more ways than one.

What Is A Real Estate Investment Trust?

A real estate investment trust is a device that permits you to invest in real estate and property but without the usually hassles associated with purchasing such property on your own. A real estate investment trust is a system where a group of investors collectively gather their funds into a legal trust and invest in various forms of real estate. If you've ever heard of other investment mechanisms such as mutual funds, you'll understand the way real estate investment trusts are supposed to work. A real estate investment trust may also be known as a REIT and a REIT invests in different types of property. The different types of property that are invested in may be residential or commercial or even for leisure purposes. Simple REITs may invest in property as a simple as an apartment block or as complex as a group of hotels and leisure parks. Some real estate investment trusts even own shopping centers and movie theatres and it all depends of the purposes of the people who initially set up the real estate investment trust.

Different types of REIT's exist and some of these trusts are private in nature. A number of these real estate investment trusts are public and can be found on stock exchanges such as the NYSE and the London Stock Exchange. One form of real estate investment trust is the mortgage REIT, which provides a unique service in that it supplies new home owners with money in order to purchase new property. People may also invest in such devices in order to get loans and securities which are backed by these REITs and mortgages. As with any investment device, a certain form of risk is always involved and methods have been created to effectively handle these types of risk. The risks that are associated with a real estate investment trust will vary and can be dependent on a varied number of factors some of which include the location the investments are based in and other factors.

In recent times REITs have increased in popularity due to a different number of reasons. Some people prefer real estate investment trusts because they are associated with factors that they can easily understand. Some people prefer REITs because they are identified with development and growth. Others simply make investments for certain reasons which are often driven by emotional factors. Statistics have shown that some relations exist between the prices of stock and the prices of real estate and profitability of REITs may easily be determined by monitoring for such statistics and varying volatility of stock markets in a particular region.

If you want to invest in real estate but you have often been scared of the problems of tying down all your money in one particular investment, REITs make perfect sense for you. The increased popularity of these devices, the growth of demand for quality real estate on a global scale as well as the opening of new vistas for investment such as the economies of newer countries on the boom such as the UAE and the countries of the former Eastern Bloc of Europe show better times ahead for early investors.

Real Estate Investing Total Asset Protection - Real Estate Investing Total Asset Protection Guide

Despite soaring oil prices and the fact that many say the economy isn't so strong, real estate is hotter than ever. It seems like everyone is getting involved in real estate, and for many investing in real estate is a lucrative money-maker. But isn't real estate investing tricky? Can you have total asset protection when investing in real estate?

For many, real estate investing in a great way to make a great deal of money. With so many people buying and selling home, real estate investing is a lucrative business opportunity. Home renovations and home "flipping" are huge right now, and this is a vastly growing field for investors interested in real estate. But how to do you combine the risk of real estate with total asset protection?

Not every property sells as well or as quickly as investors might like. While real estate investing is big right now, it's still somewhat risky. New and inexperienced investors might lose more than they gain, depending on the property and the project. When it comes to real estate investing, it's hard to combine your investment with total asset protection.

Total asset protection is a tool that investors of all kinds use to protect themselves from losses. By protecting assets totally, investors will be unable to lose their initial investment. In most cases, it's hard to combine the risk of real estate with the safety of total asset protection. Buying property can rarely be fail safe, especially when profits depend on a sale. Not all sales go through, and not all properties sell for what they should. This means it's very hard to get the safety of total asset protection when considering real estate investing.

Buying real estate means making an investment, and not all real estate is created equal. Some properties may need work before they can be sold, and other properties may need a lot of work before a sale can happen. This makes real estate investing very, very important. Investors use their money toward the future of the property, and in most cases can't expect a payoff from their investment until after a sale has been made. Unless a pre-arranged contract is worked out between the investor and the agents involved with selling the property, real estate investing and total asset protection don't really mix. Often, total asset protection isn't part of the mix when dealing in real estate investing.

Real estate is a great investment opportunity, despite the risk. Before considering an investment in real estate, make sure you know about the property you're buying, and know what the risk is. How much could you stand to lose? Even if you don't have total asset protection, do you have any protection of assets? In other words, could you stand to get any of your initial investment back? All these things are important to consider before investing, but real estate is a great opportunity for anyone who wants to make money.

Real Estate Investing with No Cash and No Credit

Lots of folks think it can't be done.

How in the world can you buy a piece of real estate property without cash or credit? How is it possible to buy a $50,000 house or a $1 million dollar house if I don't have an abundance of cash or an excellent credit rating?

Nothing stops a would-be investor cold in his tracks like "no cash or credit." The prevailing perception is that "I can't start real estate investing" because (1) I sure don't have any money and (2) my credit is horrible!

The typical way real estate investing is accomplished is with an earnest money deposit to accompany the Purchase Contract and a down payment at closing. Many real estate investing tycoons, in wanting an offer accepted, make large earnest money deposits so the property seller will recognize the buyer as a serious investor. And because many real estate investing tycoons use real estate agents as their purchasing liaison, they provide sizable down payments out of which the sales commission will be paid.

Well, when I started my real estate investing career, I had neither cash nor credit. I had a serious business failure prior to my start in real estate investing, so I had to conjure up a way to succeed outside the traditional norm.

While I was well aware of the accepted procedures of earnest money deposits and down payments in real estate investing, I was forced by my situation to find alternatives. I did not realize at the time that commercial property is often purchased without any cash outlay at closing or even a credit check of the buyer.

So without any pocket change or a savings account, I began offering a $10 bill as my earnest money deposit! And I began offering no down payment at closing. My Purchase Contract offered simply the assumption of an existing loan! (In the 1980s when I started my real estate investing career, wrap mortgages were common, whereas today other legal instruments accomplish the same purpose.)

I don't have to tell you that real estate agents were not exactly fond of me. In fact, in my highest week of tendering offers, I submitted 235 offers on MLS houses, and got 235 rejections. I mean, the realtors and brokers were infuriated at my non-traditional offers! Most went to great pains in writing "REJECTED" across the entire length (even both sides) of the legal-size Purchase Agreement I had laboriously filled out for submission. The young man "running" my offers (and his broker) were verbally blasted out of the saddle! I got NO acceptances from my 235 offers. Yet, I still managed to buy two properties from the 100% (humiliating) rejection. Two property owners approached me later and said, "I can't accept your offer on that property I had listed with my real estate agent, but I have another house you can have on the same terms!"

That break-through began my trek into the Nothing-Down Wilderness that made me a multi-millionaire in three years. Once I realized it was persistence with a thimble-full of know-how, I forged on to discover motivated sellers who accepted my offers. I bought $1 million in properties that first year, another $1 million the second year, and $10 million by the 4th year.

It's a shame that even some real estate investing tycoons don't know how to buy with no cash and no credit. But the bottom line is that know-how still makes possible the impossible.

Buying property of any price is still achievable with no cash and no credit. It's done every day in residential and commercial property. And because it is achievable, anyone can enter the real estate investing arena, regardless of the size of his or her wallet.

What You Need to Know About Real Estate Investing

Are you interested in making a living as a real estate investor? If you are, your career and your financial future will rely heavily on your real estate investing skills, knowledge, and actions. If you have yet to quit your current job, to enter into real estate investing, you will want to continue reading on before doing so.

When it comes to real estate investing, there are many hopeful investors who think that it is easy to make money as a real estate investor. Yes, it can be easy, but it isn't always. Real estate investing is a risky business. Real estate markets, all across the country regularly change; therefore, you aren't given any guarantees. That is why it may be a good idea to start out small, by only purchasing one or two real estate properties first. This will give you the opportunity to determine if you can be successful with real estate investing and without having to go broke finding out that you can't.

Although real estate investing is considered a risky business, there are steps that you can take to improve your chances of making money with it. Perhaps, the most important thing that you can do is educate yourself about real estate investing. Be sure to focus on more than just real estate investing in general. Be sure to learn about foreclosure properties, fixer upper properties, becoming a landlord, and such. Unfortunately, too many hopeful investors mistakenly believe that real estate investing simply involves buying real estate, but it is more than that. To be a successful real estate investor, this is a fact that you must not forget.

When it comes to familiarizing yourself with the many components of real estate investing, you will see that you have a number of different options. For instance, there are a number of online websites that aim to provide internet users to free information on real estate investing. There are also printed resource guides or real estate investing books that can be purchased. For more detailed information with a professional spin, you can take a real estate investment training course or class, many of which are held by successful real estate investors.

As it was previously mentioned, to make a successful career out of real estate investing, you need to be able to do more than just buy and sell properties. When it comes to real estate investment properties many properties are repaired or updated and then rented out. Most commonly the landlord in charge of making all decisions is the property owner or the investor, which could be you. For you to make money in that aspect, you would need to make sure that all of your houses or apartments were filled with tenants. Do you know how you would go about doing so? Better yet, do you think that you could do so? If not, real estate investing may not be right for you.

The above mentioned points are points that you will want to take into consideration before quitting your current job and banking on the real estate market. Yes, real estate investing is a great way to make money, but it isn't for everyone. Your first step should involve determining whether or not it is right for you.

Real Estate Investing For Beginners - Part 2, Types Of Properties For New Real Estate Investors

Not all real estate property types may be appropriate for new real estate investors. There are many factors to consider when making the decision to add real estate to an investment portfolio.

When deciding on a residential real estate investment strategy, some options for new investors to consider include:

Rental units

Rental units can be considered both long term and short term investments. Types of properties that may be considered for this category would include:

• Detached single family homes


• Attached single family homes


• Multi-Unit properties


• Condos/Townhomes

Being a LandlordNot everyone has either the desire or inclination to be a landlord. Dealing with tenant and property issues can be very stressful and time consuming. One way to minimize the impact of being a landlord is to hire a professional property management company.

Hiring a professional property management company has several advantages:

• Allows owners of rental properties to be 'shielded' from dealing with tenant and property issues directly.


• Provides a buffer allowing the owners to maintain a hands off approach to managing their properties.


• May provide a less stressful experience


• Offers the ability to purchase real estate investments not immediately local to the investor.


• Provides a single contact point for all issues regarding the investment property.

Professional property managers are well versed and prepared to manage tenant and property issues as they arise. They will typically take care of all issues relating to the property.Many offer their services at reasonable prices and rates while others can be quite expensive depending on additional services being offered. You may expect property managers to provide the following services:

• Advertise properties available


• Recieve applications for tenancy


• Perform Credit and Background checks for applicants


• Recommend rental pricing


• Pay maintenance and/or repair bills for the owner


• Send monthly statements and rental income (Less any outstanding bills. Typically these are deducted and itemized from the rental income and will appear on monthly statements)

Flipping or The Bane of New InvestorsOften times, new investors in real estate are overly anxious to 'flip' properties and make a significant profit. Rumors of how friends or acquaintances have made allot of money is often the incentive for 'flipping'.

The real estate market fluctuates greatly. Yesterdays great 'flipping' market may be (recent market trends as an example) tomorrows 'Hold on to it' market. While this is certainly a desirable quality of an investment property, it is and should not be the primary consideration for new real estate investors. The competition for this type of real estate investment is fierce and occupied by seasoned, experienced professional builders and investors

Property Types

Let's discuss the various property type which may be considered by new real estate investors.

The selectionof the type of real estate property for investment purposes may be based on several factors.

These factors include:

• Financial considerations - How much can you afford?


• Availability of properties - What types of properties are available?


• Location - You've heard this one a thousand times - Location...Location...Location...


• Income potential - Does the property in question match your real estate investment strategy?

Detached and attached single family homes
Single family homes whether attached or detached are oftenthe first real estate property type new investors seek. In many areas, they offer the most availability of any property type.Prices obviously vary greatly with these property types as well.

Multifamily Properties

Apartment units such as duplexes and triplexes should be considered as a viable option for new real estate investors.

Many investors and real estate professionals use apartment buildings as a point of entry to a portfolio of commercial real estate holdings and to build their equity before moving on to larger commercial real estate investments.

Duplexes, triplexes and fourplexes are two, three and four-unit buildings that may or may not be owner occupied.

Summary

Selecting an appropriate type of real estate property in which to invest is a primary consideration for all serious real estate investors.

Real estate investment strategies include the decision of whether or not to become actively involved in the management of the property. Professional property managers offer alternatives to assist in a "hands off" approach to owning residential income property.

Knowing there are options on the various types of properties to purchase as investment may provide new real estate investors the information needed to make that final decision to become a real estate investor.

End of Part 2

The continuing purpose of this article series is to assist new investors in making sound real estate investment decisions. Making sound real estate investment decisions initially may lead to the more lucrative opportunities of Commercial real estate investing

As a Keller Williams Success Realty real estate agent and REALTOR® working in Panama City Florida, my mission is to provide the public with quality Panama City Florida Real Estate services!

I believe the future of Real Estate sales will be maintained and driven by the online power of the consumer. I provide quality service for Panama City Real Estate investors, from Commericial income properties to 1031 Tax Exchanges.

Real Estate Investing - An Alternative To Traditional Stock Market Investment

From a historical perspective, investing in real estate is almost as old as the construction of property itself. Indeed many business owners who created their wealth through companies then went on to diversify into real estate investments. In fact, over the years real estate investments have produced similar returns to those found in the stock market. Let's take a look at some of the reasons:

First of all, and most obviously, the supply of building land around the world is limited, even when taking into account landfill opportunities. Since the world's population is growing and the demand for housing ever increasing, then there would seem to be a never-ending and increasing requirement for real estate of all types.

Now let's take a look at the mechanics of buying property. Here it can be seen that investing in real estate is quite different from most other traditional investments such as stocks. With real estate you can often borrow up to around 80 percent of the value of a property, sometimes even the full value and beyond under special circumstances. Thus a more modest investment of say 20 percent of the value can be used to buy and control the full value of the larger investment. Naturally, if the value of your investment increases, I.e. property prices rise, then the value of your real estate investment also increases. If so, then you are into profit, including that on the money you originally borrowed.

Naturally, there will be costs associated with real estate investing (such as legal fees and property maintenance, taxes, etc), but these are usually small in comparison with the potential gains.

Borrowing in order to invest in real estate makes real estate a type of leveraged investment. But if you know anything about leverage, you will realize that leveraged investments can also go against you. What, for example, if the property you purchased for $300,000 decreased in value to $240,000? Even though the value only dropped by 20 percent, you actually lose 100 percent of the original $60,000 investment. And if you have a mortgage on this property making up its full purchase price, you will actually need to pay money to the mortgage provider in order to cover the costs of selling the property. That's in addition to the loss of the whole of your initial investment.

So, as you see, investing in real estate is something to be taken very seriously and should not be done with money which you might need for other things in the near future. Investment in property is more secure as a long-term investment. In the above example, if you could have held onto the property and not sold it, the loss would purely have been 'on paper'. In all likelihood, over time the value of the property, unless grossly overpriced when you originally bought it, will rise and you will likely not only recover the full value of the initial investment, but also possibly make a nice profit when you do come to sell.

Another reason that real estate is a popular investment is that there are profits to be made from it whilst you are the owner. In addition to the tax-saving benefits (in that any tax due on the property's increase in value doesn't become due until it is eventually sold), you can also make additional money from renting out the property. This can often cover all your running costs of the property, plus providing a profit on top.

Unless you make a large down payment, early on during your ownership the monthly operating profit from your property business is likely to be small or non-existent. But over time this profit will increase as the amount of rent you can charge increases at a higher rate than the running costs. Naturally these profits will be subject to normal income tax rules.

A further benefit of investing in property is that you might be able to purchase cheaply a run-down or 'distressed' property and fix it up or develop it further. Properties like this can still be found if you look around carefully. Naturally, investing in this type of real estate can still produce large gains. This is something you certainly can't do with traditional stock market investments.

However, returning to the initial question about whether real estate investing is still a viable option when current prices seem to be nearing their peak: yes, it can still be so, but you might need to be more creative and prepare to be in for the long haul. Property 'flipping' methods that worked extremely successfully yesterday, might not work at all well tomorrow.

You might also consider diversifying into overseas real estate markets. Whilst this will require greater study and analysis, and there are many more legal issues to consider, seeking out what appear to be undervalued international real estate opportunities has the potential to be highly profitable if handled correctly.

Naturally, you should always seek the advice of professionals, both financial and legal, before investing in properties of any description, particularly when considering investing overseas. There might be major implications to your overall taxation. Risks can also be substantially higher when you are not there to oversee your investment in person.

Five Key Principles to Real Estate Investment Riches

Real Estate Investing is the craze today with people involved in the Carlton Sheets program spending money on courses to find out how they can make money in no money down real estate investing. This article hopes to help you create some sort of mental picture of five key principles that can help you make more money with real estate today.

Principle #1- The money is made in the purchase

Real estate investing is like value investing in stocks and you want to purchase the real estate during a period of a real estate slump. The reason for this is so that you can get a huge capital appreciation when the real estate market heats up again.

Spending time doing real estate valuation is critical since if you cannot satisfy yourself on the maths that is a viable proposition, there is no way that your real estate investment would be a good one.

Principle #2- Monitor Cash flow

Real Estate investment typically have a monthly rental income which then is used to pay for mortgage instalments and other problems with the building like a roof leak. You would thus have to keep a close watch on interest rate hikes since they can potentially erode any calculated return on investment quite quickly. Once you have enough cash coming in, it is suggested that you then keep some of it in a rainy day fund in case some of the rental tenants do not renew their property and then take the rest and consider investing in another real estate investment property.

Principle #3- Leverage on other people's time

Remember that no one can do everything, so the key is to focus on what you do best. If your strength is in negotiating deals, spend time looking for property and then get professionals and contractors to handle all the rest of the deal for you. Similarly, if you are good at decorating property, then find deals and focus on the interior design of the property. By focusing on what you do best and getting other people to do the rest of the work, you are leveraging on their time and you can then make more money from each new real estate investment that you undertake. Spend your time to build your team of advisors and employees who work for you and you will see your profits start going up. Remember that by rewarding them financially, you will get a group of dedicated people helping you make more money from your real estate investment.

Principle #4- Learn how to use leverage with a good rainy day cash balance

Did you know that many real estate investors started off with very little money to invest? Even large real estate developers like Donald Trump have learnt the power of leverage when investing in property deals. You want to leverage as much as you can so that you can control property worth many times more than what you own. Remember however to keep a rainy day fund containing a portion of the rental payments so that you can hedge yourself against a possible period where unit occupancy of your real estate investment is low. Leverage when used well can make you lots of money but if managed badly, will bankrupt you. Thus planning your cash flow and learning how to use debt is critical before you start serious real estate investment.

Principle #5- Spend time networking with real estate professionals

Do you want the latest real estate investment deals? The best way to learn of them is to break into the local real estate professional group and make friends with them. Learn some real estate investment lingo and spend time making friends with them because they are your eyes and ears on the ground and they can tell you about recent developments and changes in rental, property and infrastructure of their geographical location. Having the first player advantage is what many large real estate investors have and by spending time to network with real estate brokers, you will substantially close the gap.

In conclusion, spend time looking at these five principles and determine how they can be applied to your real estate investment and you might start seeing an increase in your real estate income.

How-To Guide - Is Real Estate Investing Right For You?

If I knew then what I know now, I never would have voted for the war.
Ken Lucas

For me the greatest source of income is still movies. Nothing - stocks, financial speculation, real estate speculation or businesses - makes more money for me than making movies.
Jackie Chan

I have 1900 units, why do I need a 401K?
Robert Kiyosaki, recent interview Time Magazine

To thine own self be true, and it must follow, as the night the day, thou canst not then be false to any man.
William Shakespeare

From Robert Kiyosaki to Donald Trump, from Robert Allen Carleton Sheets, from Dolf de Roos to Diane Kennedy, investing in real estate is touted as a way for average people with time, money and patience to build wealth.

But is investing in real estate right wealth vehicle for everyone? If this were a one-size fits-all-world the answer would be yes. But, then, stocks would be the perfect investment vehicle for everyone and the discussion would end there. I have had investment real estate since 1994. I have had tenants attempt to squat in my properties, I have been sued, I have had a unit vandalized, someone drove into one of my buildings and I gave gone through my fair share of property managers.

If I knew then, what I know now, would I have bought my first property? The answer is yes. Real estate has done more for me than the stock market has with less overall financial risk despite the headaches and they have been many.

Five Ways to Know if Real Estate Investing is Right for You.

1. Are you a good manager of your personal resources or do you have significant amounts of short term debt? If the answers are no and yes, in that order, do not invest in real estate until you address these issues. Real estate is illiquid. Once purchased, the hold time on your new property may be significantly longer than you anticipate. This means that your potential exposure to unplanned expenses on your property may be longer than anticipated. Significant amounts of short term debt or the inability to plan your finances in anticipation of expenses may turn your real estate investment into a financial nightmare.

2. Are you a team player and can you captain that team? Investing in real estate means partnering with others to ensure your success and recognizing that your partners may know more than you. You will encounter brokers, property managers, attorneys, handy men, plumbers, electricians, contractors, roofers, inspectors, mortgage brokers and appraisers. If you are a control freak, prefer to work alone or cannot be direct in your communication when working with people, real estate investing may not be right for you.

3. Do you understand the kind of investing you will be doing? Will you be investing for cashflow or speculating for appreciation? Do you have the analytical tools necessary to help you work up a pro-forma for the property you will be buying?

4. Do you truly understand that wealth-building in real estate occurs over many years and that you have to "survive" your first couple of properties to build wealth? Over 20 years ago I started baking bread. The guide book I bought featured a "loaf for learning", a basic loaf that I could practice kneading, mixing and still turn out an edible product. Your first properties will be "buildings for learning". As you move beyond the initial learning curve, you will move on to create wealth. In certain markets, real-estate can produce appreciation returns beyond expectations and create the illusion that real estate produces instant cash. In my life I have seen two such markets. Frankly I would not want my future financial well-being to rest on my ability to time markets. Sophisticated investors have as their core investments, cashflow properties, properties that perform during hot or cold markets.

5. How do you react to unpleasant business news? Is your overall reaction anger that dissipates into a sense of helplessness or do you become a problem solver? Being able to solve problems is the key to having a successful business and investing in real-estate is a business. Real-estate is also a people business, by this I mean your tenants are people and the service personnel who will work on and market your properties are people. If the failings of others afflicts you with moral indignation and heartache, real estate investing is not for you. Tenants will fail to pay the rent and you will have to evict them, your property manager will charge you market or above market for repairs and will fail to market your properties properly in order to keep them full.

While real estate investing is a great way to build wealth, investing in real estate isn't for everyone. It is easy to "catch the fever" and jump without looking, the first step is to make sure that you know yourself; these five points of consideration will assist you to that end.

The next step is to educate yourself about your local market, financing options, price and rents. You can start by finding a local Cashflow or real estate investing club. If you join a local real estate investing club make sure some of the members actually own investment property. That way the club won't just be a club of "wannabes".

Next assemble your team of property managers, accountants, brokers and agents. You will do this by interviewing prospects. Once you decide on a team, you will still have to trade the members out from time to time.

The Importance Of Adding To Your Real Estate Investment Group

But teacher, the computer gremlins ate my homework!!!!! Unfortunately, that is what happened to my well crafted article for last week, right before I left to teach classes at the Learning Annex in New York.

The good news is that after being in NYC, I can now give a really strong example about today's topic which covers what to do once you have found ( or created) a great real estate investment group. What MOST people do from human is exactly opposite of what it takes to be a part of a real estate investment group that yields outstanding investments time after time.

It is human nature to believe that if you have something good, you don't share it with others for fear of not having enough to go around. Psychologists call this a "SCARCITY" model were people believe that there is only a finite supply of anything worthwhile. Coming from a very conservative background, where I grew up the son of a college professor, I was cursed with this scarcity belief.

As I started to gain more and more success, the more I realized that many successful people believed exactly the opposite of me: that is, they believed that by working together and sharing, you could produce an INFINITE supply of whatever was wanted. This is what experts refer to as an ABUNDANCE model.

So how does that apply to us? Let me give you the example from the Learning Annex. During our last night, we had a person in attendance that has been with our group for some time and has participated in multiple projects. This person is a full time real estate investor, is very savvy in her choices, and it's a big believer in the power of real estate investment groups.

Afterwards, we got talking about how she might be interested in purchasing multiple units in our N. Tampa project and probably would also know others that were interested. To her credit, she did not want to "hog" too many units for either herself or others outside of the GetPreconstructionDeals.com real estate investment group.

In my opinion, this person could SUBSTANTIALLY INCREASE the ability of others in our real estate investment group by telling others now. Yes, we may run out on "this project" but now let's look complete the chain of events:

1. Some people cannot get into the project because it is sold out;

2. Because it is sold out, several developers take notice and want to offer special incentives to the real estate investment group;

3. Another good project is offered and because of more people are around, a substantial number of properties are consumed, some of them by people who could not get in last time.

4. In turn, this continued activity attracts even better opportunities by developers

5. Because the opportunities are continuing to flow, more and more people are attracted to the real estate investment group;

6. The process simply continues providing an ABUNDANCE of opportunities for all.

Now, suppose you do the opposite and individuals decide that it is a bad idea to grow the real estate investment group. Now what happens?

1. First project, everybody gets to participate and is very happy;

2. Developer's notice what occurred and want to work with the real estate investment group;

3. Next project is offered but VERY FEW people participate because they are personally tapped out since many in the group only want about 1 investment per year;

4. The real estate investment group now has difficulties getting good projects in the future since developer's don't know if it will work.

Let's do a real life, current day example. Right now, we are in discussions with a mid-size developer for getting access to about 40 units of a project that we think will truly be awesome. But what this developer NEEDS our real estate investment group to do is take 40 units VERY QUICKLY to greatly assist in their financing program.

For our real estate investment group, if we can solve the developer's problem and get good investments for ourselves, they have another 160 units coming several months behind this project; i.e., increasing opportunity for EVERYONE. It is our personal stance that by feeding the below cycle, EVERYBODY in the real estate investment group wins over the long term.

For this reason, regardless of if you have your own real estate investment group or if you are a GetPreconstructionDeals.com member, we hope you will keep growing your group by telling people what you do and how they can participate.

This is the last in our series about real estate investment groups and how to get the most out of them. In March, we start our next series talking about the a number of real estate investments and how we see them fare in 2006 and beyond.

Real Estate Investing - FSBOs vs. Agent Listings?

Many would-be real estate investing professionals face discouragement because of the assumption that acquisitions require deep-pockets. Some even believe the myth that nothing-down purchases are impossible.

The early 1980s era in real estate investing known as the Zero Down Real Estate Movement was initiated by Robert Allen with his best-seller, "Nothing Down." After observing how commercial properties were acquired with no money down, Allen applied 50 techniques from the commercial real estate industry to the residential property marketplace. He was reportedly paid $1 million advance royalties for his publication, and began holding real estate investing conventions across the country.

The Nothing Down era was a startling eye-opener to the public. Very few were aware of Allen's predecessors, like Nick Nickerson, Al Lowry and Mark Haroldsen who wrote books on real estate investing requiring no money. Allen popularized the notion, and it was a strong public draw for his real estate investing seminars.

However, some of Allen's convention speakers were ultimately revealed as "con men," and some bellied up. Robert Allen himself went bankrupt in 1996. The public generally concluded that Allen was probably a fraud, and that real estate investing was impossible without deep-pockets.

The Wall St.Journal got wind of the Nothing Down Real Estate Investing Movement, and interviewed many investors who were using "Zero Money Down" techniques. The business editor of the Wall St.Journal interviewed me repeatedly (and others who knew of my real estate investing), and featured me in an editorial as one of the most successful investors in the nation who had purchased millions of dollars in rental property without any money.

These previous unfolding events are pertinent to the conclusion of how to buy real estate properties with limited funds.

I proved that properties could be acquired without cash (or credit) to the tune of $10 million in real estate investments during my first 4 years. I used a $10 bill in the acquisition of many of my properties.

Purchases from FSBOs (For Sale By Owners) were possible through negotiations with motivated sellers. I bought millions of dollars in real estate properties without cash or credit by learning acquisition skills that required no money down.

On the other hand, real estate properties listed by real estate agents minimally require a down payment that covers the agent's listing fee. These listed properties were no more valuable than the FSBO properties, but the agent fees demanded cash upon acquisition. In the intervening years since the 1980s, I have purchased some agent-listed properties, but my target acquisition continues to be FSBO real estate property from a motivated seller.

Real Estate Investments - Just How Risky Are They?

Real Estate Investing Just How Risky Is It? What Can You Do About it? What's the real scoop? Why are there so many real estate investment seminars making the business look easy, while real estate investors I know are experiencing something more involved?

It does not matter whether I am listening to radio, late-night TV or Saturday morning infomercial, I can always discover a real estate program promoting fast ways to make big money, and I wonder if I am missing out on something? So what is going on? Am I overlooking important learning opportunities with these money-making training sessions? One is left with this message: If it is this easy to make money in real estate, then why isn't everyone doing it?

It appears is that we are receiving the upside of the business: good deal making techniques, and the periodic great deals. We need to realize the limitations of what we are seeing and to understand what we are missing with many of these training seminars. That is not to say that there isn't money to be made in real estate and that one cannot make a good living with real estate investments. There are great techniques for acquiring and developing good investments on a number of levels. And the business can provide you much satisfaction and freedom. However, you can trust that there is more to the real estate business than what is presented in the typical real estate seminars.

The more successful businesses are structured and have developed business models (methodologies) to work by. They provide controls over accountability, guidance, risk management, legal protections, and quality assessment (assurance) to ensure that their products and services meet their customer needs. We have all heard the comment, "Oh, you are in real estate. Isn't that kind of risky?" The answer, of course is that it can be, and for many, it often is! Does it have to be so risky? No! But, have you ever attended a real estate seminar in which the presenters discussed risk management or assessment? Why not? Doesn't it apply?

Real Estate gurus often tell their audience what they want to hear, rather than the broader picture of what they may need to know. We all need to know the positives and the value of good real estate techniques. However, isn't there a need to provide a more complete view of real estate business, including asset management, standard business practices, and checks and balance, not just investment techniques alone? For example, would you appreciate some advice on effective property management? Don't you want to know more about what to do in tough times or when you are getting in over your head; how to advert bad decisions, and how to expand your business and how to protect yourself? Every business person has good and bad times. But not all businesses go under because of hard times. Most of the businesses I know deal with risk management, either on a formal or informal basis.

My Recommendations: Here are three (3) key things you should develop for your business. While they apply to all businesses, they particularly apply to real estate:

A. Vision for your business

Martin Luther King said, I have a dream! Likewise, you need a dream and a vision of what you want from your business. Writing it down and keep your vision honed.

B. Well-defined Business Plan (cradle-to-grave)

If you don't have a plan for your vision, how are you going to have your vision come true? Your plan should include a description of your objectives and actions for the start and completion of each major program or project you are doing.

C. Risk Management Plan

It is your duty to minimize your risks, and maximize your successes. It is much easier to make changes in direction early on, before you have to pay the price in dollars later! Risk Management is about diversifying your options (not putting all your eggs into one basket), identifying best and worst case scenarios, reviewing your performance regularly, having a backup plan, when your master plan fails, and finally learning from your mistakes!!

A) Create a Vision for your business You create your vision through the following:

Values you uphold for your company

Purpose of your company

Goals which detail how you are going to accomplish what you want to do.

Taken collectively, these three provide you with your Business Vision, or Mission. After think about these three areas, you should write out your mission statement and your goals and objectives for your business. A business vision is not cut in stone. As your business grows, so will your vision.

B) Structure Your Business How do you start planning your business and identifying your activities? You can take classes, read books, and talk with professionals and mentors. To ensure that you have thought of all issues regarding your business set up, it is a good idea to write down these 6 interrogatives to help you capture the whole of it:

Who, What, Why, When, Where and How

All six can assist you with your planning. For example, in general, you will want to define Who is involved, Why you are doing the business, What you want out of your business, How you plan to get there, When you plan to start (timetable), and Where (location) you expect to operating your business. Below is an example of a structured business model. How detailed and thorough you are in its use, depends upon the maturity and size of your business. You will want to define your tasks and detail to the degree required to manage your business. However, the four Phases are generally accepted categories. For more information, you can, of course, attend classes, go online and search for business models or business methodologies, or consult our web site http://www.globalrealestateinvesting.com later:

I. Analysis Phase:

- Define your vision and mission

- Define your objectives, according to your mission

- Identify your resource requirements (people and materials)

- Identify real estate for your business development

- Define a risk management model

II. Design Phase: Define a plan or prospectus on paper (include marketing and staging approach as part of the design)

Select real estate - determining current and future value of investments for purchase or sale, according to your plan

Collect data on required resources (people and materials) and their costs

Create a total cost estimate for each effort (often called a Work Breakdown Structure-WBS).

Review the labor and cost estimates with other key members for confirmation, make modifications to your estimates, as necessary.

Consider developing your real estate in workable phases

Establish checkpoints to review performance, and test your results with the market

III. Development / Renovation Phase Perform construction / renovation / project management projects according to your plan

Regularly hold brief reviews with key members to confirm your progress

Make changes to your work activity according to review recommendations

Prior to completion, make a test walk through of the properties to ensure work is to Plan (Review development and staging activities)

Complete work (punch-out) and any final updates for final review

IV. Implementation Phase Review plan for staging property(s) and Marketing approaches

Make corrections to the plan, based on review results

Document lessons learned from our real estate developments

C) Develop a Risk Management Plan

Are you having trouble keeping your activities under control? Are you continually overrunning your budget? Did you complete a renovation project or manage a year of lease/rental income that should have provided you a good profit, but ended up giving you little to no real profit? If so, then you need to define a Risk Management Plan:

Risk Management is a tool that is not referred to enough in managing real estate businesses. It can be critical to the survival of many businesses. Most people think of "risk" when they think of real estate investing. So, why would you not develop risk protection for your real estate business?

RISK MANAGEMENT Definition:

The process of analyzing exposure to risk and determining how to best handle such exposure.

The decision to accept exposure or to reduce vulnerabilities by either mitigating the risks or applying cost effective controls.

So, what is at risk?: Your time, your money, your physical assets, and suits against your assets and integrity. For real estate, Risk Management can be viewed as performing a series of risk protective activities at periodic times during your property development efforts, starting from the day you start your business to its operations and ultimate sale. [Creating a contingency plan, having access to attorney services, and incorporating your business are part of your Risk Management Plan]

If you are doing your job correctly, you should be able to determine before your begin a real estate project:

Anticipated profit you will take for your effort

Current value of the investment

Future value of the investment upon completion

Completion Time for the investment effort

Can you say this now? If not, you are not really ready to renovate a property for sale and profit!

Here are examples of how I have used risk management techniques in my real estate development activities. I always keep in mind that good locations and good residents are my most important assets.

Example #1-building cost reductions: Year 1999, Purchase of two 4-unit buildings as one property in good area; units were section 8 in need of major TLC (deferred maintenance and a classical diamond-in-the-rough ).

Purchased low, required inspections, negotiated with Seller on $10,000 post-inspection cash return for improvements Talked with landscaper on removal of overgrown bushes. They wanted $2,500 for effort. I declined. Within 6 weeks, using a chainsaw (no massacre here), I trimmed all bushes, creating a bonsai effect, placed mulch on beds using free mulch from a community resource center, and planted flowers. Renovated each apartment on a unit-by-unit basis as tenants left; upgraded exterior with new landscaping, decorative painting, and artistic fixtures Sold both buildings to local LLC for full-market price, $100,000 profit within 6 years

Risks managed: Materials and Management costs were kept low, so that tenant income and sale profits are maximized, using sweat equity.

Example #2 Seller Creativity during a Buyers Market: Year 2006 Sale of Historic Home in a financially-stalled historic district (tough sale for a tough period).

Reviewed listings and purchased bank-owned double with extra lot, very close proximity to local university and hospital Re-converted badly-designed double to original single-family home Installed high-end kitchen and bath cabinets, using discounted display cabinets and counters from a local home improvement store. Installed discounted high-end lighting (commercial lighting company provided 50% discount for using his services for my renovations); restored ornate doors and woodwork, landscaped yard, planted flowers During sale period (Buyers Market): extended my potential client market to include both residential and commercial clients; introduced my listing to Real Estate mangers for local hospital and university. Received excellent offers from the hospital and a professional person with the Air Force.

Risks Managed: Ability to sell home in a marginal area for a very good price during a Buyers Market; Expanded client base to both commercial and residential through location of home, provided several sale options, including Seller financing to help motivate Buyers.

Example #3 Management for Protection and Income Maximization: Year 1977 - current Use preliminary telephone and interview screening and credit screening for all applicants; following this up by directly personally contacting employers, landlords, and relatives Establish rules and conduct requirements verbally and in written Leases; provide checklists, support policies, and show residents that I care Remain strict with Lease requirements, rent payments, and the rights of other residents. However, I remain flexible and supportive of residents needs; making repairs as soon as possible; providing simple courtesies such as asking about the family, their interests, needs; I always tell residents that we appreciate their presence. When residents have established a good rent-payment history and start having trouble paying rents, I am flexible and work with them. I have created notarized payment plans, have created agreements to spread payments over periods of time, and have had residents work for me on occasion. I consider the comments You are the best landlord I have ever had to be the highest compliment and a definite risk management safety comment.

Risks Managed: Maintained residents for extended periods (maximizing profits); Ensured that residents knew who I was and that I was responsive to their needs and concerned about their well-being. This provided security, as residents were less-likely to be upset with management or damage the property, or move-out! It also builds a good tenant base, as word-of-mouth provides you with good residents.

I hope that this information has been helpful.

So, just how risky is real estate investing? . . . . . .only as risky as you are willing to make!

For more information, visit my website, www.globalrealestateinvesting.com

I started investing in real estate some 30 years ago. As a real estate investor, there was quite a bit of groundwork required before I bcame a seasoned-enough investor to be knowledgeable about tenants, property management, purchasing, financial asset management, and property sales. Often, it has been challenging at times. However, I love the business and the freedom it provides. I enjoy working with people and creating quality investment properties over the years.

My background consists is combination of training, human factors, technical systems development, marketing, sales, and management. I am a property investor, with 30 years experience in management, investments, training and serving as Director for a large Research firm in Ohio, providing training and systems programs for the government. Visit my site at: http://www.globalrealestateinvesting.com!

My educational background includes a MA in mathematics from Northwestern, a BA from Ohio University, and many years of inservice training in management

Real Estate Investment Groups: "Get 'er Done"

Have your heard there is a new real estate investment guru in the marketplace? At night, he has a part time job as a national stand up comedian and without the audience even knowing, he gives them fantastic real estate investment advice. His name is Larry The Cable Guy, and these days he performs to packed audiences purely because of his real estate advice, I am sure. So what is his secret advice to getting good real estate investments? GET 'ER DONE!

In all seriousness, I don't think the Cable Guy is actually giving real estate investment advice but he should. If you will remember his famous "Get 'er done" phrase, it will serve you well in the real estate investment. Early in my real estate investment career, I bought single family houses and then turned around and resold with owner-financing in place. As I was beginning this activity, the HARDEST part was finding good investments on a consistent basis. Why? Because I had no track record and thus nobody would help.

When I approached realtors for help, they would be friendly but rarely brought any good projects. I didn't understand why because I KNEW I was very serious about buying. However, most realtors really doubted that I would buy the houses if they brought them to me. Having been in the real estate investment business for a while now, I certainly don't blame them. What realtors rapidly learn is that 90% of investors will back out when it actually comes time to close. So they do all this work and don't get paid.

But like many things, after you struggle through your first couple of real estate investment deals, then you start to gather a reputation of actually getting deals done. Before long, there was a couple of realtors who figured out I could "Get 'er done" and started to bring me more opportunities than I could handle. This was a HUGE turning point because now people call me, tell me about a real estate investment deal, and ask if interested. All of this required ZERO work from me! Today, I still occasionally pick up houses and primarily use one realtor who knows that if I give her the go ahead to look, then she will get an immediate pay day if she brings something that meets my criterion.

As I got more and more into preconstruction real estate investments, I got another rude awakening. Even though I was serious about finding investments and had decent connections, as a single individual, I was pretty much irrelevant to developers and major brokers with large preconstruction projects. Why? I was buying 1 unit and they might have 400 to sell. While they were happy to get my purchase, they would not go out of their way to find me other good projects and deals.... It was like I had to beg to get in.

Over time, there was a small group of us that formed that had more power but still, had almost no ability to interact with developers and get better real estate investments. As time moved forward, GetPreconstructionDeals.com was formed with the idea that by surrounding ourselves with a group of investors, we could now enjoy some of the perks of being able to "Get 'er done" on a larger scale. Today, with that ability, we get to look at a lot of projects and opportunities that most outside investors never even know about.

This month, we will run a series of articles on take full advantage of investing "with the power of thousands". With a strong group of "Get 'er done" investors, it really becomes amazing at the real estate investment opportunities that arise; and this is true if the real estate market is booming, flat, or declining.

We will also use this article series to introduce a major new feature to GetPreconstructionDeals.com: an real estate investment open forum and "town hall meetings" to help investors group into smaller, more common interest areas. At our web site, we obviously introduce a wide range of projects from preconstruction condos, town homes, mountain and coastal property, condo conversions, international and domestic, etc.

We will be taking steps to help gather "Get 'er done" investors into smaller, real estate investment interest groups with a tight focus on the types of projects they desire. The real advantage for you is that if you are looking for a specific investment type (or even location) and there are others that share your interest, we can then really help these groups find the types of projects meeting their needs. We believe this will be a tremendous benefit to not only investors but developers as well.

So we hope you will join us this month as we really outline the steps for you to achieve your real estate investing goals, regardless of market conditions.

Real Estate Investing Financing Truths - Part 2

No Money Down and other 'Creative' Real Estate
Investment Methods

For many years, investors have seen the traditional
real estate investment methods described in Part 1
of this article as a lot less than desirable!

They began looking at the prices of houses and
finding methods of bringing the price more in line
with making more money in a faster way.

These savvy investors developed ways to get loans
on properties that allowed them to pull money out
whenever they buy a real estate investment (cash
back at closing) and lower their payments to build up
their cash flow ('creative' investing).

They even developed methods of determining a
Sellers motivation for selling - and bought the
property at a discount price.

These creative investors also saw that some Sellers
were not able (for whatever reason) to sell the
property at a discount price, however, they still
needed to get rid of the property, as they didnt
know how to manage it as a landlord, or make
money from it - not that it couldnt be done, they
simply lacked the knowledge of how to do it.

The Seller just never learned how to profit from a
real estate investment.

These investors understood how to make money
from such properties, and did.

They bought the property on discount terms, and
made money from the spread by selling it at retail
price and/or terms (certainly one of my favorite
methods of real estate investing).

Buy Every Real Estate Investment via Discount Price
or Discount Terms.

Several years ago (actually, it really took off in the
1980s), Real Estate Investment Experts began
seeing the potential for making money in bringing
this treasured knowledge to the public in the form of
home-study courses, seminars and Boot Camps.

They found that it wouldn't create competition for
themselves, as many people, even though they
purchase real estate courses and attend seminars
and Boot Camps, will not actually take the
information and utilize it to make the hundreds and
even thousands of dollars possible for anyone
serious about Real Estate Investing.

These Real Estate Investment Experts (being
dubbed 'guru') found that this side of the business
was lucrative often making more income from
teaching about real estate investing than the actual
real estate investments themselves.

It is important to understand that these real estate
investment gurus learned early that they can only
teach others what to do, not be responsible for the
other persons success.

Providing the information to those that choose not
to use it is very similar to the old adage "You can
lead a horse to water, but you cant make it drink".

Yes, these real estate investment gurus got wealthy
from selling this information, but their theories,
principles and techniques taught thousands of
others (those that take action on what they learn)
how to realize their dreams utilizing their tried and
true methods of real estate investing.

From home-study courses and seminars, to boot
camps and one-on-one training, these methods
have been proven to be not only interesting to
millions of people, but capable of bringing massive
wealth to those that take action on what is taught -
those that go on and actually make real estate
investments themselves.

Knowledge changes things...

This knowledge of no money down real estate
investing techniques being known by thousands of
Sellers has made changes in the industry.

By bringing the Seller into the knowledgeable realm
of Real Estate investing, Sellers now know many of
the methods that the gurus teach.

This is both a blessing and a curse.

To the talented investor, these knowledgeable
people are more likely to work to create a WIN-WIN
situation.

Investors that avoid the tricks and stick to the basic
real estate investment techniques and terms that
have been proven to work over and over again,
have proven these powerful real estate investment
strategies work even with these informed Sellers.

Oh, yes, many of these real estate investment
techniques work today, as they have for many
years. So much so that it is almost possible to say
they have become principles; things that work, over
and over, the same way no matter what happens -
like gravity.

However, sadly, they are not really principles, as
several of the real estate investment methods and
techniques that worked in the 1980s and even
through the 1990s are today not as powerful, nor do
they work as often as they did before (although
some 'gurus' are still teaching the same methods -
even after 20 years...).

Some of this decline is due to a more educated
society (due to the flood of real estate investment
information available via books, tapes, home-study
courses and the Internet), while some of it is due to
simple changes in policies and laws.

It seems like a wave started late in 2003, the FHA
announced that flips (transactions where investors
buy houses cheaply and sell them at or near market
rates) are "illegal". (Note that illegal in this context is
not a legal term, but one that has been adopted
from "you are not allowed to do that and do
business with us".)

The FHAs announcement started a wave of concern
(if not panic) throughout the Real Estate investing
community.

Title and Mortgage companies began to tighten up
their reigns. Many of these companies, in lieu of
direct information, began simply not completing any
transactions that did not follow the traditional real
estate investment system. This made it hard for
investors to complete transactions that involved
simple buy-then-resell agreements (as they are not
really real estate investments, but a rather nice way
to make some fast CA$H!).

In rapid appreciation areas (California and Nevada,
for example), the ability to flip a property all but
stopped (became 'illegal'). All the 'traditional'
creative real estate investing methods were virtually
put on hold.

Ingenuity to the rescue, other methods of real
estate investing always seem to pop up. After all,
"Necessity is the Mother of Invention", and "Where
there is a Will, there is a Way" are absolute
principles.

Investors have to make a way to get things done - a
way to keep their real estate investments profitable,
and even more creative real estate investing
methods were developed - to keep real estate
investors, and the love of real estate investment,
alive forever.

A Real Estate Investing Idea For Total Newbies

All right, you've seen the infomercials for people like Carleton Sheets, or you read an ebook by somebody like T. C. and Vickie Bradley, and you're hot to trot out your wallet and get rich with real estate investing...just like everybody else.

Whoa, Trigger.

Not everybody IS getting rich with real estate investing, no matter what the hype leads you to believe.

First, let's understand a couple of things. There ARE people getting rich with real estate investing. Many of these people have followed the lead of Carleton Sheets or T. C. Bradley or other real estate investing gurus. Those are facts.

Here is one additional fact. If you don't know what you are doing, you can lose your shirt in real estate investing...like a lot of other people.

That's not to say you can't learn, and it's not to say that people like Carleton Sheets or T. C. and Vickie Bradley can't teach you. What it does mean is that you can't listen to one tape, or read one book and run out the door asking for somebody to please take the contents of your wallet! You have got to take the time and make the effort to learn the facts, steps, and inside information necessary to become successful in real estate investing.

However, I realize that those dollar bills are burning a hole in your pocket and you want to get started NOW, so here's a simple way to begin your trek to the top.

Let me tell you how Lois got her real estate investing empire started in Austin, TX. She looked around until she found a small, but well-maintained 4-unit apartment complex in a nice Austin neighborhood. The price was right, so, not having the credit herself to swing the deal, she got her dad to cosign with her. Once the place was hers, she moved into one unit (no more rent to pay), the rent from another unit covered the monthly mortgage, and the rent from the other two units was hers to keep.

Not exactly a get rich quick plan, but it was a start. Since she still had a full time job, she used the extra money from the apartments to pay off bills and loans, including the mortgage, at an accelerated rate. This gave her leverage to buy another unit, and the rest is history. She now is an Austin slumlord...! Seriously, she has done well in this simple way and has grown her initial real estate investment considerably.

In his article, "Buy High Yielding Turnkey Real Estate Investments With Your Signature Alone!", Bill Young, a former bank mortgage officer and real estate investor since 1980 gives valuable pointers in getting started in this sort of deal, sometimes with no down payment required. You can find a copy of this article at http://real--estate--investing.blogspot.com/2006/03/real-estate-investing-buy-with-your.html

While wheeling-and-dealing in real estate investments can make fortunes, there is a learning curve required to make the kind of money professionals like Carleton Sheets and T. C. Bradley do. If you are a total newbie and just HAVE to get into real estate investing, you might be well advised to follow the example of my friend, Lois, and start with small, occupied apartment units, perhaps using some of the space as a residence, as she did, and using income from the units for investment growth.

Real Estate Investing Skill Acquisition

Real estate investing is not in any list of high school electives. You can't get an accredited degree in real estate investing. You won't find a high school or college guidance counselor who recommends a career in real estate investing (if the guidance counselor understood real estate investing, he or she probably wouldn't be a guidance counselor!)

The public school system and educational curriculum in the U.S. is only a feeble attempt to prepare students to just "get a job." Unfortunately there is no class in "Making Money 101." You don't have the opportunity to take a class in "How to Become Financially Independent." No teacher ever taught a class in "How to Succeed When Everyone Else is Failing." I never learned anything about succeeding as an entrepreneur or becoming wealthy during my 10 years in the university classroom. I only became a multi-millionaire when I learned the skills of real estate investing, and I paid the price out-of-pocket and out-of-the-classroom for that education. I learned these skills in the ole University of Hard Knocks through trial-and-error.

Never disparage the cost of education. There ain't no free lunch. You've gotta get this know-how outside of a classroom, and learning how to make money is gonna cost you. But if you think the cost of education is expensive, you should calculate the cost of ignorance!

However, learning real estate investing doesn't have to cost you an arm and a leg. Yes, I know, the real estate investing TV infomercials and the real estate investing seminars held around the country charge big bucks for those 3-day seminars and week-long Boot Camps. But that's pocket change compared to the fees they want to collect from you later. Catch this fact: all the real estate investing infomercials and seminars target you as a candidate for "real estate investing coaching." That's where they charge you up to $25,000 and over $50,000 per year for "coaching." And often you are assigned to some kid "still wet behind the ears" to call you each week or month to hold your hand and whisper in your ear what common sense and a persistent drive should already tell you! I'm not exaggerating the real estate investing educational system, because I know it inside and out. I personally know many of the so-called "gurus." I've been close to it for 25 years. My opinion is that the fees charged are exorbitant because the promoters have found deep pockets in the marketplace.

When I started my real estate investing career 25 years ago, real estate investing TV infomercials were unknown and real estate investing seminars were extremely rare. Back then, Mark Haroldsen followed an emerging trend started by Al Lowry and Nick Nickerson by holding occasional real estate investing seminars across the country. Later Robert Allen expanded the industry. Robert Allen promoted real estate investing conventions in the major cities across the U.S. He found a market for costly real estate investing packages of information with cassette tapes and note books. TV infomercials, expensive seminars, and outlandish coaching fees followed in subsequent years. Would-be real estate investing aspirants today who want more than an inadequate salary from a job in Dullsville often conclude that they have to "pay through the nose" for real estate investing know-how.

However, through diligent searching, these want to-bees often find that this education in real estate investing is more readily obtained from other sources than they previously imagined.

Real estate investing is probably one of the most easily learned skills never taught in school. Real estate investing is probably one of the most prolific careers available on Planet Earth. Because families now live in houses instead of caves, houses available for fix up are everywhere. And probably nothing contributes to upgrading the deplorable housing conditions across America comparable to real estate investing in fix up properties.

The entrepreneur-minded aspirant who discovers the real estate investing industry often catches a vision of life-beyond-a-job. Books and online courses offer an alternative to expensive seminars and coaching.

5 Rock-Solid Real Estate Investment Strategies

Investing in real estate is more complex than simply buying and selling homes. To help new real estate investors to decide which strategy might work for them I put together 5 rock-solid strategies. It is up to you which strategy you feel more comfortable with.

1. Buy and Hold

This real estate investment strategy is commonly known as rental properties. Becoming a landlord is easier than you think. You buy a property, you advertise it as "for rent" and you sign a contract with your new tenant. That's where the love story ends. You need to know a lot about your duties and your rights as a landlord or you will find yourself in trouble.

Screening your prospect tenants is your first line of defense. Protecting your property from damage is your first duty. I might paint a little bit dark picture of being a landlord. But dealing with tenants can be the most frustrating job you ever had. Do yourself a favor and visit a bookstore or library and get as many books on landlording as you can get. Armed with this knowledge you will be able to create a positive cash flow and a long term relationship with your tenants every time you put the "For Rent" sign in the yard.

With the buy and hold strategy you basically have 3 income streams going at once.

Amortization; while paying your mortgage you also lower the amount you owe.

Appreciation; while owning the property it increases in value.

Tax incentive; as a landlord you will be able to deduct your investment cost over several years. (See you tax advisor for professional advice).

Based on this information you can easily see that even if the rent doesn't cover 100 % of your mortgage payment you will still be able to create a positive cash flow.

2. Flipping

This is the art of "buying" and "selling" real estate investment without actually taking ownership. In a flip situation real estate contracts get assigned and the person who assigns the contract to someone else typically gets a commission for their services. That's how you can make money with real estate without credit checks or no money down. Because you never take possession of the property, you don't need to apply for a mortgage.

You only need 2 things to be able to flip a home. First, you need to find an attractive property that will sell very quickly. Second, you need to find a buyer within a very short period of time. Typically 2-3 weeks. Then you simply flip the contract to the new buyer and you will collect your commission at a so called "double closing".

This sounds complicated at first, but with a little bit practice you will be able to create a nice income from this. By the way, this is the preferred concept of most real estate "gurus" who appear in late night infomercials.

3. Rehabs

Rehabs are the most risky form of real estate investments. You hunt for a cheap, run-down property and you hope that your preliminary remodel cost estimates will leave enough room for a nice profit. Well that's the theory. Most real estate investors are failing with this type of strategy.

You either didn't get the property cheap enough to make a profit or the damages are more extensive than estimated which will offset the cheap purchase price. To make matters worst. If during the rehab phase of typically 3-4 months the market is going south all bets are off. Trust me, I made my share of experiences with this and I told myself, never again.

4. Commercial Real Estate Investment

What comes to your mind first when you think of commercial real estate investment? Big factory complexes, shopping malls or maybe huge office buildings. Well, my answer is much simpler. Anything bigger than a 4 unit apartment building, some call it fourplex, is considered commercial. The great thing with commercial real estate is that the value of the property is determined by the rent income it generates and not by how crazy people are going with bidding on residential real estate.

Theoretically there's no such thing as sellers or buyers market for commercial real estate. I wrote a complete article about the pros and cons of commercial real estate. So I keep this brief. Personally I love commercial real estate. Of course, commercial real estate is more or less off limits for beginners, because commercial real estate lenders want to see some form of prior experience in real estate investments. However, if you got some experience, go for it. As an added benefit; the competition is far less.

5. New Construction

This is the most affordable and easiest way of real estate investment. Getting into the earliest phase possible of a new development is a sure thing to make money. Keep an eye on the market and you will be able to sell your new home before construction is finished. The construction companies don't like this, so they limit the number of homes an individual can buy. Even so, keep one or two homes constantly under construction and you will make some nice profits. Of course this works only in a sellers market. Stay away from this strategy in a buyers market or when you see big changes in the local real estate market.

3 Things You Must Do to Succeed at Real Estate Investing

Here are three simple guidelines that must be followed if you plan to succeed at real estate investing. It's not everything, of course, but at the very least, you must be willing to commit to these things if you want to become a successful real estate investor.

Shall we get stared?

Acknowledge the Basics

Real estate investing involves acquisition, holding, and sale of rights in real property with the expectation of using cash inflows for potential future cash outflows and thereby generating a favorable rate of return on that investment.

More advantageous then stock investments (which usually require more investor equity) real estate investments offer the advantage to leverage a real estate property heavily. In other words, with an investment in real estate, you can use other people's money to magnify your rate of return and control a much larger investment than would be possible otherwise. Moreover, with rental property, you can virtually use other people's money to pay off your loan.

But aside from leverage, real estate investing provides other benefits to investors such as yields from annual after-tax cash flows, equity buildup through appreciation of the asset, and cash flow after tax upon sale. Plus, non-monetary returns such as pride of ownership, the security that you control ownership, and portfolio diversification.

Of course, capital is required, there are risks associated with investing in real estate, and real estate investment property can be management-intensive. Nonetheless, real estate investing is a source of wealth, and that should be enough motivation for us to want to get better at it.

Understand the Elements of Return

Real estate is not purchased, held, or sold on emotion. Real estate investing is not a love affair; it's about a return on investment. As such, prudent real estate investors always consider these four basic elements of return to determine the potential benefits of purchasing, holding on to, or selling an income property investment.

1. Cash Flow - The amount of money that comes in from rents and other income less what goes out for operating expenses and debt service (loan payment) determines a property's cash flow. Furthermore, real estate investing is all about the investment property's cash flow. You're purchasing a rental property's income stream, so be sure that the numbers you rely on later to calculate cash flow are truthful and correct.

2. Appreciation - This is the growth in value of a property over time, or future selling price minus original purchase price. The fundamental truth to understand about appreciation, however, is that real estate investors buy the income stream of investment property. It stands to reason, therefore, that the more income you can sell, the more you can expect your property to be worth. In other words, make a determination about the likelihood of an increase in income and throw it into your decision-making.

3. Loan Amortization - This means a periodic reduction of the loan over time leading to increased equity. Because lenders evaluate rental property based on income stream, when buying multifamily property, present lenders with clear and concise cash flow reports. Properties with income and expenses represented accurately to the lender increase the chances the investor will obtain a favorable financing.

4. Tax Shelter - This signifies a legal way to use real estate investment property to reduce annual or ultimate income taxes. No one-size-fits-all, though, and the prudent real estate investor should check with a tax expert to be sure what the current tax laws are for the investor in any particular year.

Do Your Homework

1. Form the correct attitude. Dispel the thought that investing in rental properties is like buying a home and develop the attitude that real estate investing is business. Look beyond curb appeal, exciting amenities, and desirable floor plans unless they contribute to the income. Focus on the numbers. "Only women are beautiful," an investor once told me. "What are the numbers?"

2. Develop a real estate investment goal with meaningful objectives. Have a plan with stated goals that best frames your investment strategy; it's one of the most important elements of successful investing. What do you want to achieve? By when do you want to achieve it? How much cash are you willing to invest comfortably, and what rate of return are you hoping to generate?

3. Research your market. Understanding as much as possible about the conditions of the real estate market surrounding the rental property you want to purchase is a necessary and prudent approach to real estate investing. Learn about property values, rents, and occupancy rates in your local area. You can turn to a qualified real estate professional or speak with the county tax assessor.

4. Learn the terms and returns and how to compute them. Get familiar with the nuances of real estate investing and learn the terms, formulas, and calculations. There are sites online that provide free information.

5. Consider investing in real estate investment software. Having the ability to create your own rental property analysis gives you more control about how the cash flow numbers are presented and a better understanding about a property's profitability. There are software providers online.

6. Create a relationship with a real estate professional that knows the local real estate market and understands rental property. It won't advance your investment objectives to spend time with an agent unless that person knows about investment property and is adequately prepared to help you correctly procure it. Work with a real estate investment specialist.

There you have it. As concise an insight into real estate investing as I could provide without boring you to death. Just take them to heart with a dash of common sense and you'll do just fine. Here's to your investing success.