Workshop Update | Week 44 – Oct 31–Nov 3

This week, Response delivered 14 Real Estate and Stock workshops. Our overall customer experience score, for all surveys received, was a 5 out of 5. We saw over 687 students. Here is what some students shared about their experience:

“Awesome experience- start to finish and so much learning!” —Stacey O.

“I came here with an open mind and was impressed with the quality of the training and how willing the mentors were to help.” —Amada B.

“The Response team delivered way more than expected an I thank you all for the experience.”—Jacqueline H.

Monthly Summary Report – October 2019

In October, the website featured 8,296 written testimonials, an increase of 655 testimonials over the month of August.

These comments come in many different forms, most of them are taken off of the handwritten surveys collected at our 3-day sales and training events.

There are currently over 1,549 scanned surveys that were handwritten by customers and don’t have any of the comments redacted, 166 of which were added during the month of September. These survey cards can be viewed at https://response.com/customer-feedback.

There are 829 video testimonials, including 157 premium professionally filmed and edited videos that can be viewed at https://response.com/response-marketing-reviews/. As of October 31st, these videos had over 30,967 impressions. The premium videos are on the top of this page and you can see they were generally filmed in the office at Response.

You can also check out the 41 current ambassador profiles here https://response.com/ambassadors/, nine of which tell their experience in video interviews. In the coming months, you will see we will be adding more video interviews with each of these people telling their stories about their experience with Response.

Our advisory board members swelled from 2,859 in September to 2,955 by the end of October, and 119 with profiles and pictures. We are continuing to reach back to old members for updated profile pictures and profile details, all newly added advisory board members are coming with completed profiles and pics.

The website is averaging 4,408 new visitors each week, bringing the total weekly average pageviews to 32,589!

On the site, we showcase 773 clients who have submitted files for their Real Estate tuition reimbursements, 582 of those have been formed into summary baseball cards. https://response.com/tuition-reimbursement-re/

Done a Deal submissions are at 456, with 324 baseball card summaries. https://response.com/done-a-deal/

As of today, there are 435 blog posts featuring articles about the real estate market and investment strategies, workshop event statistics including customer feedback, and community involvement events Response participated in.

We recently updated a number of trainer bios to include some “get to know you” info for the trainers on their profile in the form of a short video, you can see some of them here now, https://response.com/meet-our-trainers/ in the future we will continue to update these profiles and are hopeful to provide one of these videos for all of the team members on the site.

The Response.com website is continually evolving as we grow. The following pages have received updates:

Is Investing in Senior Communities a Good Idea?

With one of the largest demographic populations, baby boomers bring a unique niche to the investor’s marker. However, is investing in a senior community beneficial? Consider these strategies:

Types of senior citizen investments

Since there are numerous kinds of elderly care communities, the opportunities you have are endless. Primarily, the three kinds of investments include:

  • Independent living

Independent living houses function almost like a standard apartment complex. When it comes to investing in an independent living facility, there are a couple of benefits. For one, independent living facilities are considered to be low-risk investments. Moreover, such houses have lower operating costs and are subject to little regulation.

  • Assisted living

Assisted living facilities are considered to be stable investments. Generally, such facilities generate a higher amount of revenue because of the expanded services offered. Similarly, since they are need-based facilities, they have steadier occupancy rates. Such facilities also occupy the largest share in the senior housing market.

  • Communal housing

Since communal housing involves many individuals living together, the amount of revenue generated is more. Plus, communal housing is preferred by many.

Benefits of investing in senior communities

  • Quality healthcare

Apart from a warm and pleasant climate, senior communities are also often located close to either a college campus or an active city. This means you’ll find numerous activities nearby along with high-quality healthcare. In fact, retirement communities are generally situated near top universities that are famous for stellar healthcare programs.

  • Easy to make a successful marketing plan

Investing in a retirement home in a senior community involves targeting a particular market. Since you know that residents must be at least 55 or older if they want to rent or purchase your property, you can come up with a marketing plan accordingly. You can develop a plan that will appeal to the demographic.

  • Increased demand

Most houses in any community are suburban houses, and suburban houses are most suitable for young families. Without a caring family member or a network of young and helpful neighbors, senior citizens living in suburban houses can feel isolated and incapable of maintaining their property. Consequently, there is an increased demand for affordable and safe housing that provides adequate services for senior citizens. So, investing in a senior community is full of opportunities.

Workshop Update | Week 43 – Oct 24–Oct 27

This week, Response delivered 15 Real Estate and Stock workshops. Our overall customer experience score, for all surveys received, was a 5 out of 5. We saw over 631 students. Here is what some students shared about their experience:

“I would definitely recommend this workshop, very good information. Life changing!” —Dustin C.

“I would do it again!” —Fresca D.

“Truly eye-opening and very enlightening.”—Gina A.

10 Easy Ways to Increase the Final Market Price of a Home

Real estate has a record of increasing in value over time, but there are simple things that a property owner can immediately do to increase the eventual sales price of a home.  The final sales price of a home is determined by factors that are common to all properties like: number of bedrooms, number of baths, size of rooms, square footage, etc.  However, the actual sales price of the home will be established when the buyer and the seller come to a mutual agreement as to the actual dollar amount.

This being the case, it is possible for the seller of the property to do a number of simple tasks that can, and probably will, increase the actual dollar amount that the buyer is willing to pay.  What are these things and how expensive will it be to complete or finish them?  Before we examine 10 relatively easy things the seller can do to increase the marketability of the property as well as the ultimate sales price of the house, let’s put our “buyer’s hat” on.

The price of a property is a factor of the Supply/Demand function.  If you can increase the demand, then the price of a home will increase.  How do you increase the demand?  It’s simple, you must operate on the fact that BUYERS BUY BENEFITS!  If you want to increase the number of potential serious buyers, you must illustrate the benefits of the property to the buyers.  The way you can do this is to put yourself in the mind of the buyer.  Ask yourself, “What are the things that would make you want to buy this property?”  Start thinking like the buyer as you walk through your own home.  Forget the fact that you’re the owner and have to fix any problems you see.  Look at the things you can do to make the property more appealing to all the potential buyers.  Here are 10 Easy Ways to Increase the Final Market Price of a Home.

 

Easy Way #1 – Start at the Gate

Remove any and all miscellaneous trash and junk.  Remember to look at the property as if you were just getting out of your car.  As the buyer, your first impression will factor into two different questions:  Would you want to own the property? And How much would you pay for the right to own it?  You want to ensure that the potential buyer is answering these questions positively.

Even if you have a special emotional attachment to old tools and the wheelbarrow that belonged to your father – get rid of them.  You want the first impression to be one where the buyer is imagining what he or she would do to enjoy the yard.  Take the time to clean up anything that could be considered to be clutter.  The more clean and uncluttered the property is, the better the first impression will be.

Highlight the entrance.  Even before the buyer enters the home, he or she will focus on the entrance to the house.  The cleaner and brighter you can make the front door and porch, the better impression you will make.  Once again, remove excess items from the porch like shoes, toys, and above all else – garbage.

 

Easy Way #2 – Improve the Curb Appeal

You want positive impressions and feelings when the potential buyer looks around the yard.  So, start by mowing the lawn and pruning the shrubs.  If your property needs some lawn sod to improve the first impression, go ahead and have it installed. Whatever steps you can do to improve the looks of the yard, the better off you will be.  If you need to hire some help from neighbor boys to make the yard look like something out of a magazine, it will pay huge dividends.

Pay special attention to the front of the house itself.  Does the house need painting or would it help if you just got a pressure washer from the rental store and hosed down the whole thing?  Once again, buyers buy benefits, and you want the buyer to see the benefit of a great looking house and yard.

After cleaning everything up and removing excess debris from the property, take a minute and look up and down the street and ask yourself, “What could I do to make the house look better than the houses of all the neighbors?”  We’re not talking about spending a lot of money, but rather just being conscious of how to improve the looks of the house and yard from the street.  Sometimes a little bit of money and some diligent work in the yard will pay huge dividends in the actual sales price of the home, and in the shortened time in selling.

 

Easy Way #3 – Clean, Sweep, Mop, and Clean Again

Start by removing any and all trash, and then do a survey of how you can clean the house as if it were a new home.  As a buyer, what would you notice about the cleanliness of the home?  Is there dust on the pictures?  Yes, you need to dust, sweep and vacuum throughout the house.  If there are bookcases, the books need to be straightened and lined up.  Furniture needs to be moved and straightened, after cleaning underneath.  Bedrooms must be immaculate with all excess items removed.

Now you need to get to the bathrooms.  Take the time to scrub and scour and make the toilets, showers, and tubs look as new as possible.  Clean the floors and baseboards.  Don’t forget to open the cabinets and clean and straighten.  If there are excess or old items, discard and trash them.

Next stop is the kitchen.  Appliances are key.  Start with the stove and fridge.  Even if you are taking the appliances with you, they are an integral part of the kitchen and they need to show as brilliant and clean.  Pay special attention to the cabinets.  Straighten the dishes and clean the doors.  Many people spend a little bit of money and actually paint the cabinets.  If necessary and if you have the money, new cabinets can sell the home as people spend most of their waking moments in the kitchen.

Finally, don’t forget the garage and storage areas.  They need to be cleaned and made to look as clutter free as possible.  Many people judge a home on the amount of storage space available.  You don’t want your storage areas to look cluttered and dirty.

 

Easy Way #4 – Do a Final Declutter

Throughout the cleaning process we have been consciously removing as much of the clutter as possible, but now we are looking at ways to maximize spacial perception.  When there is too much furniture in a room, the room looks small.  If you want the potential buyer to think the rooms are large and spacious, try removing some of the furniture.  Many sellers realize that they weren’t actually using the items they removed as part of the declutter process.

If you can declutter the closets in the bedrooms, you will find that the closets seem larger.  Clutter clogs up any room, and when you remove excess items from the room, everything seems larger.

The garage always seems to be a magnet for clutter, and now you want to get rid of as much of the clutter as you can.  Some sellers have realized that renting a small storage unit for a few months can actually be financially smart when they move their clutter from the house to the storage unit.  However, it doesn’t seem to take long for these same people to realize that they weren’t actually using the items they put into storage.

 

Easy Way #5 – Store Your Personal Memories

Buyers want to make the new home (hopefully your house) theirs.  They want their own memories.  If you have a ton of family photos occupying all the wall space, it might be time to pack some of the photos up and leave room on the walls.  You aren’t getting rid of the photos – only freeing up wall space.

 

Easy Way #6 – Brighten the House

You want to let in as much light as possible to the home.  Avoid heavy dark drapes that create depressing feelings.  Windows are designed to let in the light and you want as much light as possible.

Consider visiting the paint store and getting neutral color paints to cover the walls.  Paint isn’t expensive and can lighten the rooms of the home dramatically.  Avoid heavy colors like reds and dark blues. People have been found to be more positive when they are in light and bright rooms.  There is a reason why windows occupy most recovery rooms in hospitals. If your home is deficient in the amount of outside light you have, then consider using floor lamps and table lamps to give a bright and cheery effect.

In certain rare instances you may want to add a window to let in more light.  When you add windows, make sure you get professional help in order to avoid problems later on.

 

Easy Way #7 – Add Living Plants 

Nature is soothing and when you can add a limited amount of living plants in vases and pots within the house, it creates a feeling of comfort.  You can use plants to emphasize certain parts of the house that can positively impact the buyer.  Consider putting a few plants next to the fireplace.  It will draw positive attention to the fireplace.

 

Easy Way #8 – Use the Senses

Smell is an extraordinary sense in selling homes.  It can be a negative if you have stale smells in a home, like cigarette smoke or cooking bacon, but it can be a real positive if the smell is one that evokes positive thoughts.  Some years ago, most malls allowed cookie smells to be wafted throughout the malls.  Sales were great, but other store owners objected and malls quit allowing the baking cookies to be smelled throughout the entire building.  Today, you have that same opportunity.  Baking bread and cookies can be a delight when people enter the home to view it.

On the negative side, if you have any smells or odors permeating throughout the structure, you need to clean the walls and take the steps to get rid of unwanted smells.  Oftentimes, you might have to remove carpets and repaint to rid the house of the bad smells.  It also helps to air out the home and make sure you have good ventilation throughout.

 

Easy Way #9 – Create Extra Space

As we declutter the home, we give the impression of added space.  Now we need to increase this illusion whenever possible.  Avoid huge bulky furniture in decorating.  Too large furniture will make the room smaller.

It’s not recommended to start adding rooms to every home, but if you have a room that is presently a storeroom and is large enough to be a bedroom, you may have another option.  Maybe it would be wise to store the storage items in your new storage unit and turn the storeroom into a bedroom by adding a new window.  If there is not enough room for a full closet, consider using an armoire as an alternative option.

Throughout the house you want to create the feeling of a large space.  When people remodel loft areas in renovated buildings they leave the ceilings open.  High ceilings create the feeling of much larger space.

 

Easy Way #10 – Use Small Renovations

This final tactic is one that has to be weighed financially.  Some renovations are very costly and may not create any added value beyond the cost of doing the renovation.  The exception might be something like finishing a partially finished basement.  This would create added space to the home but should be done in a very professional manner.

You may want to update appliances and fixtures in the kitchen or bathroom.  These are two rooms that have a strong eye appeal. Whenever you update these rooms, make sure you use neutral colors and bring in lots of light.

First impressions are lasting ones.  If you want to improve the marketability of your home, then pay attention to the little details.  Simple easy-to-follow tactics like the above strategies can pay big dividends in finding more potential buyers, and when you have more buyers, the price you receive for the property should naturally increase.

 

5 Key Factors that Will Help You Understand the Importance of a Buyer’s Agent

Every new real estate investor soon comes to grip with the realization that the purchase of a property can be a daunting and sometimes complicated process.  Does everything start with the actual offer on the property?  Sadly, the answer really starts much sooner.  Before you ever purchase a property, you need to be able to determine if the property in question is the best property and if the price you are willing to pay is the best price.  Assuming that it is the right property, the price then becomes even more important.

It’s entirely possible that you have heard of a “buyer’s agent” and been a little confused.  Many new real estate investors mistakenly believe that if you automatically call the number on a listing sign, you will have an agent that will work in your behalf.  Nothing could be further from the truth.  That agent has signed a contract to work for the seller and to do everything in his or her power to represent the seller.  Nowhere in such listing contract does it say that the listing agent will work to represent the purchaser of the property.

It’s time to understand just how important a good, well-qualified, and knowledgeable buyer’s agent can be.  The term “agent” comes from the concept of “agency” which generally means an action or intervention to accomplish a certain result.  Thus, a buyer’s agent refers to the action of purchasing a property for the benefit of the buyer.  When you engage a buyer’s agent you are engaging someone who is going to work for you, negotiate for you, and stand in your best interest.

As a real estate investor, you should ask yourself if you really need a buyer’s agent.  In order to answer that question, step back a moment and ask yourself these three questions:

  • Do you want to lower the purchase price of the subject property?
  • Are you confident that you can negotiate the best purchase price possible?
  • Do you know who is representing you in the transaction?

Once you answer those questions, you will probably come to the conclusion that you might need additional help to secure the best deal.  That help can come through a well-qualified buyer’s agent.  If you are ready to become a better real estate professional who secures the best deals, you need to consider the following factors about a real estate buyer’s agent.

 

Key Factor #1 – Understand the Benefits of Using a Buyer’s Agent

There are major benefits a real estate investor can receive when using a knowledgeable and well qualified buyer’s agent.  The only real negatives generally appear when an investor has chosen an agent who is not knowledgeable or qualified.  With that caveat in mind, let’s look at several ways a buyer’s agent can benefit you, the purchaser of the property.

  1. Locating the best property. The first thing you need to do is to decide what type of property or real estate strategy you are going to pursue.  Are you going to search for “fix up property”, “potential rental property”, “raw land”, or some other type of property?  You need to determine exactly what type of property you are searching for.  Once you have done this, you will need to pass on this information in specific detail to your selected buyer’s agent. (Later in this article, we’ll discuss how to find and identify a good buyer’s agent.)

Your buyer’s agent needs to be able to distinguish between your wants and needs.  You should let the agent know exactly what you are trying to accomplish.  When you do this, your buyer’s agent will schedule appointments to view the properties and should be able to provide you with advance information regarding both the properties preliminarily selected along with critical facts about the neighborhoods.

  1. Negotiate the offer. This is a major benefit for you, the purchaser of the property.  The buyer’s agent will act as a third party and eliminate uncomfortable situations between yourself and the seller.  Keep in mind the fact that the listing agent of the property is contractually bound to represent the seller of the property.

The buyer’s agent can suggest appropriate starting offers and terms that might be acceptable to the seller.  In all likelihood, these terms might not be the price and terms that the listing agent is offering.  A good buyer’s agent will have researched other sales in the neighborhood and be prepared to have reasons for the price and terms you are offering.  This negotiation is generally made directly between your buyer’s agent and the listing agent.  Once the offer is accepted, the buyer’s agent can help and assist in drafting up the final closing documents.

  1. Recommend and find other real estate professionals. Depending upon the exact strategy that you will be employing, it is very possible that you might need the help of a well recommended contractor, mortgage broker, real estate attorney, appraiser, property inspector, mover, or other professional.  Your buyer’s agent should be knowledgeable about these individuals and be able to provide resources to help close and finalize the purchase of the property.  Having this information in a timely fashion will help you overcome obstacles that often appear when purchasing property.  It may be something in the home inspector’s report, be an appraisal problem, or some other setback.  When you have knowledgeable experts at hand, you are in a position overcome setbacks or obstacles that derail your investment strategy.

SEE ARTICLE: How to Convert Stumbling Blocks into Stepping Stones

 

Key Factor #2 – Understand the Difference Between a Buyer’s Agent and a Seller’s Agent

You must not believe that the buyer’s agent and the seller’s agent are one and the same.  They are not. When you use the seller’s agent (the listing agent) to negotiate on your behalf, you are positioning yourself in an untenable situation.  The buyer’s agent is working for the purchaser of the property, while the seller’s agent (the listing agent) is working for the seller.  Yes, you want to buy the property and yes, the seller wants to sell the property.  The difference is that you want to purchase the property at a price and terms that make sense for you, while the seller is trying to maximize the sales price on the same property.  In most cases, these goals are not the same.  The seller’s agent is bound by fiduciary responsibility to represent the seller, and not you.

Who do you want representing you?  Do you want the seller to know the absolute highest price you will pay before you even present the offer?  If you elect to use the seller’s listing agent to negotiate for you, you have already lost the negotiation issue.  Let’s take an example from the real world.  If you owned a rental property and your tenant was injured while repairing his motorcycle in your garage and sued you because your garage didn’t provide enough safety equipment, would you want the tenant’s lawyer representing you as well as your tenant?  I’m sure the answer would be a resounding “no”.  The same thing is true when negotiating with a seller.  You don’t want someone bound to and reporting to the seller to be representing you, the buyer.

 

Key Factor #3 – Determine How to Find a Good, or Even Great, Buyer’s Agent

Before you look for a good buyer’s agent, you must decide if you want to use one.  Once you make this decision, you must become very selective in the process.  What you don’t want to do is to choose someone who is not qualified or knowledgeable.  You want to find someone who understands the role he or she will play in the property purchase.

The first thing we recommend is that you immediately disregard the listing agent as a potential buyer’s agent.  The listing agent is legally bound and responsible to the seller of the property.  With this being the case, how can that individual represent you as a buyer’s agent?  You can be choosy when selecting the buyer’s agent.  You may receive recommendations to use your sister’s uncle or some family relative.  While it is difficult to say no to these type of recommendations, it is usually wise to do so.

What you are looking for is someone who truly understands the role of a buyer’s agent and is prepared to fulfill the responsibilities that come with this opportunity.  You can search online for “buyer’s agents” in your specific locality.  It is also possible to get recommendations from other friends who have purchased property using a buyer’s agent.  We suggest that you get several recommendations and then interview these individuals and find out how knowledgeable they are.  During the interview process, try asking these questions of each individual:

  1. Do you accept listings? If the agent does accept listings, this means that he or she is automatically working for the sellers of those properties.  Great buyer’s agents specialize in working with buyers and don’t accept listings from sellers, thus avoiding conflicts of interest.  If the agent accepts regular real estate listings, the agent is basically saying that he or she is working as a dual agent.  Does this sound like what you want?

A final note about agents who work as “dual agents”.  It is not illegal to have an agent work on your behalf as well as for the seller of the property, but when you do, you are competing against yourself.  When an agent agrees to show you a property where he or she is the listing agent, that is exactly what you are doing.  Many real estate professionals have found it more profitable to contract with a buyer’s agent and have that agent contact the listing agent.

  1. What type of properties do you specialize in? In order to increase your success in real estate, you need to find a buyer’s agent who both understands your specific real estate strategy and has had experience in finding these properties.  When your buyer’s agent has past experience, the learning curve will be shortened.
  2. What neighborhoods do you specialize in? You want to find an agent who is familiar not only with the type of property you are interested in, but, knows the area very well.  Hopefully, you will find an agent who has both the experience as a buyer’s agent, but also has experience on a personal basis.
  3. Are you working part or full-time? You need to understand from the beginning how much time the individual will have to devote to scheduling and showing you properties.  If the agent is working only part-time, ask very specific questions as to the availability he or she will have to working with you on your schedule.
  4. What references can you provide? You would be well-served to have references from other real estate purchasers who have used the agent.  You might also ask for references from other professionals like appraisers, mortgage brokers, or home inspectors.  Once you get a list of references, follow through and talk to each of them and ask their professional opinion of the agent.

 

Key Factor #4 – Understand How the Buyer’s Agent Gets Paid

The first question that often comes to mind is “Who pays the buyer’s agent?”  In most cases the fee paid to the buyer’s agent comes from the actual sale of the property.  When the property owner lists the property, he agrees to pay a real estate commission of 5 to 6 percent of the purchase price of the property.  The fee is paid through the listing broker and is generally split 50/50 between the listing broker and the buyer’s agent broker.

Most people say that the seller is paying for the buyer’s agent because the money for the buyer’s compensation comes from the sale of the property.  When you analyze the situation more closely, you recognize that the actual money comes from the payment made by the purchaser of the property to the seller.  Yes, it comes from the seller, but only after the buyer has actually paid the money to the seller.

Professional buyer’s agents have a contract they sign with you, the purchaser, of the property.  This is done when you engage the professional buyer’s agent and is called and Exclusive Buyer Agency Agreement.  The contract between yourself and the agent specifies what he or she will do on your behalf.  Before you sign such an agreement, make sure that you are satisfied with the agent.  The buyer’s agent will work for you.  You must be satisfied that he or she is just what you want.

The agreement is generally for three to six months and can be cancelled by yourself if you are not satisfied with the agent.  Many of these agreements have a clause that states you will pay a minimum amount (often $2,500) from any purchase arranged and negotiated through the buyer’s agent.  This fee comes from the listing commission paid through the seller of the property.  In the case of properties offered “For Sale By Owner”, the fee could be paid separately, or the buyer’s agent may get the seller of the property to pay the fee.

 

Key Factor #5 – Understand the Role of a Credible Professional Buyer Agent

There is an organization that is known as “The National Association of Exclusive Buyer Agents” and is known as (NAEBA).  This organization is a membership organization of buyer agents.  The organization selects agents who don’t accept listing contracts with sellers as the listing contract makes them responsible to the owner and creates an immediate conflict of interest.

You can search for the best buyer’s agents in your specific area by using a search engine and searching for the terms:

  • Real Estate Buyer’s Agents
  • Buyer’s Agents
  • Professional Buyer’s Agents

Try matching the terms with your specific locality and you will find buyer’s agents in your area.

A final word to the wise.  There are always two parties to a real estate transaction – the buyer and the seller.  As a buyer, you want the best price possible on the best property available, according to the best terms you can negotiate.  Consider strongly searching out a knowledgeable and professional buyer’s agent to accomplish your goals.

4 Strategies New Real Estate Entrepreneurs Can Use to Maximize Profits

Investing in real estate does not guarantee a profit, nor does it offer assurance that the entrepreneur, or investor, will not lose money.  It does, however, offer the wise new real estate entrepreneur the opportunity to make a profit while lowering the chance of losing money.  What then is the difference?  Why do some new entrepreneurs experience more success than their counterparts?

The answer probably rests on two words – Investment Strategy. Far too often, new real estate investors, or newbies, begin their investment career without a clear plan on how to succeed.  They hope and often pray that they are making wise decisions without a well-conceived real estate investment strategy.  Rather than following a proven roadmap on real estate success, they seem to jump from one approach to another.

If your future investment strategy is going to have the highest probability of succeeding, it is vital that you educate yourself with real estate investing in general, and then choose which investment approach fits with your mindset, talents, time, experience, and perhaps most importantly – your finances.  Don’t short change yourself by settling for education from unexperienced and unqualified “so called experts.”  Rather, find a mentor or educator that can explain and guide you through the basic real estate investment strategies.

Your personal goals and ambitions will have a direct bearing on the best real estate investment strategy that makes personal sense for yourself.  If you are interested in passive income without major time requirements, your choice might be entirely different from that selected by a hands-on handyman who loves to fix up and restore properties. When making your choice between different strategies, be realistic in matching investment criteria to your personal assets, talents, and time constraints.

Once you have done all this, consider choosing one of the four following investment strategies that entrepreneurs have used successfully across the country and across the globe.

 

Strategy #1 – Rental Properties

Investing in rental properties is a great way to create semi-passive cash income where your tenants “in effect” are giving you money every month to pay down or to eliminate the mortgage debt required to purchase the property.  If your primary goal is to build a positive regular cash flow, then rental properties can make a great deal of sense.  There are three major caveats you must consider when selecting rental properties as your investment strategy.

The first is simply “secure financing.”  It is a well-documented fact that there are more and more young and middle-aged people entering the housing market.  With this added influx of potential renters, it seems logical to assume that rents are going to continue to escalate over the coming few years.  But, there is no guarantee that this situation will continue to exist long-term.  If you enter into a financing agreement on the purchase of a rental property that locks you into extremely inflexible or high interest payment terms, it may very likely be your downfall if the housing market changes.  Don’t agree to financing terms that can damage positive cash flow or lock you into unrealistic payment terms.

Second, location has always been rule #1 when investing in real estate – and that goes double for rental properties.  Quality renters who will pay their rent on time and protect your property will always look for properties that show well and meet their family objectives.  They may want to be near schools, shopping, or entertainment venues.  Your success in keeping high occupancy rates will dramatically increase when you choose properties based on location.

Third, you are becoming a landlord with all of the responsibilities associated with it.  Being a landlord may mean that you now will have major time constraints because of the management responsibilities associated with rental properties.  This is especially true when the entrepreneur decides to own multiple rental properties.  This management obligation can be diminished with proper management training or by engaging a qualified professional management team.

SEE ARTICLE: 5 Keys that Can Open the Door to Professional Real Estate Management

As an entrepreneur you will need to evaluate and decide if you are most interested in traditional long-term rentals or the recent success of short-term rentals.  Both choices offer the potential of positive cash-flow and long-term appreciation.  Short-term rentals have increased world-wide in recent years due to the success of companies like Airbnb, but there are also caveats with this option.  More and more cities and local zoning authorities are blocking or even stopping short-term rentals.  If you follow a well-designed plan from proven experts, you will be much more able to avoid the perils associated with this phenomenon.

 

Strategy #2 – Buy and Hold

The buy and hold strategy is based almost entirely on the principle of “appreciation.”  Over a long period of time real estate has proven to appreciate at a rate equal to or in excess to the rate of inflation.  This means that as time passes, the property will continue to increase in “real value.”  There is no guarantee that this historical data will increase at any pre-determined rate, nor will it always increase in a consistent manner.  There are many factors that enter into the equation of real estate appreciation.  These include everything from location and access to market and zoning changes.

Yes, it appears that property will continue to increase in value, and providing you have selected the right property under the right purchase terms – you can probably expect appreciation to occur.  But the buy and hold strategy is much more than just buying the right property, you also need to be able to hold the property for an extended period long enough to recover your investment and make a profit.

This means that you may be forced to cover interest and mortgage payments incurred when purchasing the property – without any income to offset the payments.  Thus the “buy and hold” strategy poses the major challenge of being a long-term investment. If real estate appreciation slows or evaporates in the short-term, you will still be locked into a longer-term investment.

In order to maximize your chance of success with the buy and hold strategy, always focus on purchasing property at “below market price.”  This may seem impossible, but just the opposite can be true when you search for foreclosed properties, pre-foreclosure properties, and extremely motivated sellers.  When you pay close attention to the true reasons a seller is selling the property, and have adequate financing, then buy and hold strategies make a lot of sense.

 

Strategy #3 – Find, Fixup and Flip

The concept of finding undervalued properties in a state of disrepair and then restoring the property to a higher value through well managed repairs can lead to success if the investor is able to flip the property in a short period of time. This strategy can lead to a fairly substantial profit if a few simple guideline rules are followed.

First, the potential property must be able to be repaired without expensive total remodeling.  It is critical that the entrepreneur who engages in this strategy understand building, repairing, and restoring construction.  You don’t want to purchase a property without a realistic estimate of what the repairs will cost to complete.  It’s always wise to get more than one estimate of bids on the repairs before the purchase is closed.  Maybe you feel qualified to do the repairs, but, get some bids to protect yourself.

Second, you must have ready cash available to complete the purchase and to do the repairs.  If you have cash available through savings, this is optimal, but if that is not the case, you may need to secure short-term financing.  Oftentimes, this type of financing comes with higher interest rates and short-term payoffs.  This being the case, you need to be able to get the repairs done as rapidly as possible in order to avoid paying all your profits toward high financing costs.

Third, curb appeal should be an overwhelming factor when rehabbing the property.  Curb appeal has been shown to be one of the most important factors in attracting new buyers to a property.  Chances are that many buyers may have seen your potential “fixer upper” in its present state and might not be immediately interested unless they can quickly visualize a new and different property.

Be aware, the fixing up and flipping houses is definitely not a strategy for the completely passive type real estate investor.  With timing and financing so important, the real estate entrepreneur will need to be actively invested in deciding on the repairs, getting them completed, all while remarketing the property to new buyers.  On the other hand, if you have the ability to find the right property, fix it up in the right manner, and flip it to a new buyer in a matter of weeks, the returns can be quite good.

 

Strategy #4 – Wholesaling

Wholesaling property is based on the concept of an investor getting a property under contract and then finding another buyer, all prior to actually closing on the property.  In essence, the real estate wholesaler can make a profit on the property without actually owning the property.  It may sound illegal, but if it’s done properly it can provide the new real estate investor with substantial profits.

In order for this strategy to work, the investor must be able to find properties that are substantially under market value.  Oftentimes, these are properties that need repairs, are close to going into foreclosure, or even in foreclosure.  The wholesaler must understand the local real estate market and be able to act fast.

Even beginning investors who have received quality training have found wholesaling to be a profitable way to invest in real estate – all without even owning the real estate.  There are a few simple things to remember about wholesaling that make the strategy simple to understand and implement.

First, the entrepreneur or aspiring wholesaler must have the ability to search out and identify potential wholesale properties.  As noted earlier, the property must be undervalued to actual market value.  This requires the entrepreneur to understand the market and to be able to look beyond apparent property conditions.  These properties and often identified as potential “fixer uppers”.

Second, the entrepreneur must have a buyers list.  This is a “book” of individuals who invest in real estate and love to have people bring them deals.  You can find such people through real estate investing clubs, title company contacts, and personal acquaintances.  It may take time for you to build a buyers list, but once you have helped other people make money, then these same people will come back to you looking for more deals.

SEE ARTICLE: 6 Reasons Why Wholesaling Makes Sense for Real Estate Entrepreneurs

Third, the entrepreneur must leave a potential profit for the person who will actually step in to complete the purchase.  Remember, a smaller percentage of a real deal is worth a lot more than a huge percentage of a deal that doesn’t close.  If you always keep in mind that your end buyer must make money before you do, you will always make more yourself.

Fourth, time is of the essence.  Unless you have the money and expertise to find a deal, estimate true cost of repairs, and immediately find a final buyer, wholesaling will be a hard strategy.  However, if you learn from an expert or qualified mentor, the strategy can bring great rewards.

Real estate investing can bring both short and long-term profits providing the investor has the time, money, and expertise to follow proven investment strategies.  The more realistic you are in determining your true goals and objectives, the higher your returns will be when choosing your favorite real estate investing strategy.

6 Reasons Why Wholesaling Makes Sense for Real Estate Entrepreneurs

Wholesaling real estate is commonly described as the strategy of putting a piece of property under contract with the intent to assign the contract to another buyer.  This type of real estate purchase approach is generally used with distressed properties where the real estate entrepreneur doesn’t plan or fixing up or rehabbing the property.

In order to profit from this stratagem, you will need to put the property under contract at a lower price than the potential market value.  In doing so, you allow the final buyer to make a profit when the property is upgraded or renovated.  The key to effective and profitable wholesaling is your ability to find properties that can be purchased at below market value.  We call properties in this condition distressed properties.

In almost all cases, the sellers of these properties are extremely motivated, and as such, will likely be willing to dispose of the property for a substantially reduced price.  Many, if not most, of these properties require cosmetic repairs, remodeling, or substantial cleaning in order to bring the property up to full market value.  Someone will have to do the upgrading or repairs, but that person is not the wholesaler.

The wholesaler finds the deal, evaluates the repairs, secures a ready buyer who is willing and capable of doing the repairs, and then sells or assigns his or her position to the end buyer.  In doing so, the wholesaler can make an immediate profit from the transaction.  There are no guarantees that you can make a profit when buying and selling real estate and wholesaling is no different.  However, if you, as a real estate entrepreneur, follow a proven strategy, do the proper due diligence, and get the proper education, wholesaling can make a lot of sense.  Let’s review six important reasons why this is true.

 

Reason #1 – Great Way to Learn and Start Real Estate Investing

Wholesaling real estate is certainly one way to profit from real estate and in order for it to work, it is essential that you are committed to real estate as an investment vehicle.  It is assumed that you will incorporate the proper mindset, have a positive attitude, and be willing to learn from the experiences of others.  You may be new to real estate or you may be a seasoned investor, but regardless of your personal situation, you can gain a great deal of additional knowledge about investing in real estate, negotiating with sellers, and understanding the local real estate market, when you follow the principles of wholesaling.

Real estate in every geographical area has unique characteristics.  As a real estate wholesaler, you will become extremely familiar with the local market.  In order to evaluate deals as to whether they make economic sense, you will need to become competent in determining market values, understanding basic repair and renovation expenses, and adapt at communicating one-on-one with sellers, brokers, and professional title companies.  This may seem like daunting undertakings, but it will happen as you learn and actually start doing something.

Wholesalers also need to learn basic direct marketing techniques as they apply to real estate.  These techniques include everything from drafting flyers, designing signs, and writing letters to home owners.  Successful wholesaling entrepreneurs also learn to use the Internet and how to effectively use websites.  All of this becomes much easier when you follow step-by-step guidance from successful mentors.

Part of your education and learning experience will come from learning how to locate the motivated sellers and distressed properties.  Some real estate wholesalers start by focusing on foreclosure and pre-foreclosure properties.  You can also work with existing multiple listing properties (MLS Properties) once you learn how to distinguish potential motivated sellers.  Remember that you are looking for properties that can be brought under contract at under market value.  There are MLS properties than can be purchased for substantial discounts, but you must learn to understand why individual owners might be extremely motivated to sell.  One caveat, all of these properties are visible to everyone, which makes it more difficult to negotiate the best deals.

Don’t be discouraged if you don’t find the ideal property listed on MLS.  There are lots of other ways to find and locate the distressed properties.  You can start by actually driving around and looking at properties in your locality.  If there are vacant houses, homes with untended yards, and properties in need of repair, these are potential wholesale properties.  This market familiarization process is all part of learning about your local real estate market.

For Sale by Owner properties are also wholesale opportunities.  These sellers may be willing to discount the property in order not to pay a real estate commission.  Real Estate auctions are also possibilities, but you will need to secure cash in advance as almost all auctions require immediate cash payments.

Finally, you will need to take a pro-active role in finding motivated sellers.  You may begin by placing signs (bandit signs), distributing flyers or using direct mail to advertise that you buy houses for cash.  Part of the wholesaling strategy is to secure the property by contract and then to assign this contract to a cash buyer who will act immediately in order to purchase at below market value.

SEE ARTICLE: Building Your Credibility as a Wholesaler

It is highly recommended that you get as much education and training on wholesaling as possible.  Make sure that your training is provided by reputable and experienced trainers.

 

Reason #2 – Eliminates Need for Credit and Large Personal Capital Investment

Every seller will require that the property is paid for.  Motivated sellers will still need a buyer that can solve their problem with cash or financing.  We can’t ignore the fact that cash will be required to purchase the property.  However, you won’t need a large amount of cash to put the property under contract.  Rather, you will need an earnest money deposit.  The actual cash to close the sale will come from your “buyer.”  This “buyer” will be the one who will actually complete the closing.  You, as the wholesaler, will provide the earnest money deposit.

In addition to the fact that you won’t need a large capital investment in order to complete your end of the transaction, you won’t need to rely on your credit to secure financing.  Your “buyer” will complete the transaction WITHOUT USING YOUR CREDIT.

Be aware that you must ensure that your contract to purchase the property must be assignable.  Generally, all contracts can be assigned unless specified otherwise.  However, you should explicitly state that your contract is assignable.  Be upfront with the seller and let the seller know that you may be using a partner or other investor as part of the purchase agreement.  Rather than hide the fact that you may have a partner or other investor, let the seller know that you may not be the person who actually takes title.  It’s important that the seller understands that the property is being sold, not that you may not be the final name on the deed.

Greed will kill a great deal.  You must allow for the seller to solve their problems, allow the “buyer” to make a profit, and earn a profit yourself.  A part of something is much better than a lot of nothing.  This simply means that you need to find sellers who are motivated to sell at below market value for any number of reasons, and then find a “buyer” who will step in and close the deal in order to make a profit.  When you receive your wholesale training from a trained expert, pay special attention to establishing values.

Before we go further, you must learn to construct good deals that allow for realistic profits.  Buyers from your buyers list will not act unless they firmly believe that they will be able to earn a profit.  They need to rely upon actual numbers as to what the property will be worth after repairs and renovation, and they must have a reliable estimate as to what those repairs will cost.  If you have actual numbers, you will be in a position to make a deal that works for you, the “buyer”, and the seller.

How do you find buyers who will step in and provide the cash to close the deal?  You must develop a good organized buyers list.  These are people who have the cash or credit to immediately act on a good deal.  Great training from qualified experts can provide valuable resources.  You can start with advertising for buyers with a website or craigslist.  You will need to develop a professional plan.  Many wholesalers join real estate investment clubs and network with other real estate entrepreneurs as a way of meeting “buyers”.   Don’t forget about friends and family as potential “buyers.”

 

Reason #3 – Teaches Negotiation Techniques

Wholesaling is a person-to-person business and you will need to learn proven negotiation tactics and techniques.  The more training you can receive on dealing with negotiation, the better your success will be in real estate wholesaling.  In every real estate negotiation, the seller wants one thing and the buyer wants something else.  Your goal as a negotiator is to find the common ground that will structure a great deal.

SEE ARTICLE: The 6 Key Elements for a Successful Real Estate Purchase Negotiation

Each time you meet with a seller or property owner you are in the process of learning how to negotiate.  Everything starts with learning why the seller is selling, or if the property is not actually for sale yet, why would the owner consider selling.  Is the property in foreclosure or does the seller have some immediate cash requirement?  There may be any number of reasons why the property is available, but you need to know the most important ones.  The more you know, the more money you might make.

As you gain experience talking to sellers, to “buyers”, and to other investors, you will gain confidence – both in what to say and what not to say.  It’s important to allow all parties in a real estate negotiation to come out ahead.  The moment you become to self-centered or greedy, the deal will vanish.  J. Paul Getty once said, “You must never try to make all the money that’s in a deal. Let the other fellow make some money too, because if you have a reputation for always making all the money, you won’t have many deals.”  As you learn to follow this advice, your personal confidence will naturally improve.

The negotiation process is all part of understanding why the seller is selling.  Once you know what the seller’s true objectives are – the sooner you can find a way to solve them.  As you learn to become a problem solver, you will quickly become a better negotiator.

 

Reason #4 – Entrepreneur Can Build a Powerful Success Team

Every successful real estate wholesaler learns that success comes with having a powerful support team.  This team may help in determining renovation costs, establishing true market values, providing legal advice, structuring proper and successful closings, and building a list of “buyers.”  You may want to do all of this yourself, but it just won’t work.  You will need the help of others, and wholesaling will help you build a powerful support and success team.

A success team will communicate with each other and provide accurate information.  Each member of your team will support and contribute towards an eventual success.  Because every deal relies heavily on establishing a final market value of the property, you will want to find an appraiser who is credible and experienced.  The appraiser can assist you in not only establishing a present value, but an after-repair value as well.

It’s critical to be upfront with the title company when completing any wholesale transaction.  You will need to work with a title company that understands what you are doing, how you are structuring the deal, and how the assignment of contract (or double closing) will work.  The title officer must know what to say when setting up the closing and working with all the parties – seller, “buyer”, and yourself.

You will also need to work with contractors and cleaners.  You may not actually do the contracting work, but you must know actual costs to finish the work.  In most cases, you may need to do some cleaning and initial work to present the deal to your buyer.  Actual realistic estimates and bids will help tremendously in your negotiations with your “buyer.”

Finally, you will need to establish a great buyers list.  This will be your stable of money people who will be anxious to step in and make a profit from your work in structuring the deal.  If you learn to structure win/win deals where both you and the “buyer” make money, you can soon have a list of people waiting to work deals with you.

 

Reason #5 – Can Reduce Risks

It’s already been established that we don’t have to have a large cash investment in order to effectively do real estate wholesaling.  When you eliminate the need for a substantial cash investment, you automatically reduce your risk of personal financial problems.  When you have to generate a huge cash investment, you oftentimes borrow excessively or create other financial problems.  Wholesaling can eliminate this problem and risk.

Another risk we eliminate by wholesaling is the risk of damaging your credit.  Your credit rating is valuable and every time you take on additional debt by borrowing, you are raising your risk.  A major benefit of wholesaling is the ability to structure a deal without borrowing money.

If you were to rehab the property yourself, you are susceptible to the risk associated with cost overruns and excess expenses.  Because you have assigned the contract to another party (the buyer), this risk is also eliminated.

 

Reason #6 – Can Create an Immediate Positive Cash Flow

We all want a positive cash flow, and most of us want that cash flow to start immediately.  When you learn to wholesale real estate and have an organized list of buyers ready to step in and complete a win/win deal, cash flow can start right away.  You are assigning the right and obligation to purchase the property, and this automatically allows you to make a profit when the assignment takes place.

The property owner or seller also can benefit from a quick closing of the property itself, which generally solves the problem the seller had with the property.

Real Estate wholesaling is a proven strategy that can benefit the seller by providing immediate cash for the property from the “buyer.”  It is also a great way to make a profit when you structure a win/win deal.  There are motivated sellers with distressed properties who actually need your help, there are “buyers” looking to make a profit, and you can succeed by structuring great deals.  The best way to make all this happen is to find a credible and qualified mentor or trainer who will guide you step-by-step in making real estate wholesaling a viable strategy.

Workshop Update | Week 42 – Oct 17–Oct 20

This week, Response delivered 14 Real Estate and Stock workshops. Our overall customer experience score, for all surveys received, was a 5 out of 5. We saw over 716 students. Here is what some students shared about their experience:

“Means a lot to us how much the team cared!” —Jaimee B.

“Honestly, at first I wasn’t interested in any of this, but now I am fully committed in doing real estate.” —Nathan N.

“For the last 20 years, we’ve been interested in real estate. We got started, then came hurricane Katrina. Since then, we’ve been trying to get back on our feet- and I have to say Response made a believer out of us again that we can with this program.”—Nathan S.

8 Powerful Strategies the New Real Estate Entrepreneur Can Use to Overcome Negative Thinking

It’s no secret that negative thoughts provide the fuel for the engine of self-destruction.   New real estate entrepreneurs quickly come face-to-face with multiple opportunities to become discouraged, and unless they take concrete action to overcome negative thinking, these opportunities can quickly derail their hopes and desires for success.  Negative thinking in real estate investing can best be defined as the process wherein the entrepreneur tends to search and find the worst outcome for an investment decision or reduces their expectations to the worst possible scenario.  This process may manifest itself in a myriad of different ways for you as a beginning real estate entrepreneur.

Consider the situation when you are searching for your first potential real estate rental.  As you review the available properties, you begin to look for all the ways in which each property WON’T work as a rental.  Maybe there isn’t a large enough yard, or maybe the bedrooms are too small.  Every property seems to have more and more problems.  It doesn’t take long and your entire thought process has become one centered on the negative aspects.

First of all, you need to realize that you are not alone when you have these thoughts.  It’s almost human nature to think of the “what if” problems and to dwell on negative outcomes.  This situation, however, should not persist if you want to have success in the fast-moving world of real estate today.  Investors and entrepreneurs like yourself are having success all across the globe investing in and using real estate strategies to create wealth.  The thing that almost all of these individuals have in common is that they have learned how to overcome negative thinking and to change those thoughts into positive ones.  When this happens they soon find that there are solutions to almost all the small and large problems that seem to pop up out of nowhere.

Let’s look at eight powerful strategies the new real estate investor can use to overcome negative thinking, keeping in mind the fact that becoming a positive minded person is a process.

 

Strategy #1 – Recognize Negative Thoughts as Learning Experiences

Negative thinking is primarily based on fear or apprehension of things that have not yet taken place.  When a new entrepreneur begins a journey based on the unknown, negative thinking is quite common.  Your first responsibility is to identify the fact that you are actually dwelling on the possibility of failure or disappointment.

Your thought process may be based on things you have heard of happening or things that you have read about.  The outcome of your present real estate investment should be different from any negative things that may have happened in the past.  Now is the time for you to learn from past mistakes, both personal as well as those mistakes of others.  Your goal is to learn from these mistakes.  It is also extremely important that you learn to use those negative thoughts as learning experiences and not as expected outcomes in the future.

Your goal must be to remove negative thoughts from your mind and replace them with positive ones.  This exercise of turning negative thoughts to positive ones should be something that you can recall when faced with unfortunate events.  You need to be able to think back to when you were thinking in a negative manner and visualize how you changed the thought pattern to a positive one.  The very act of remembering that you were able to change the thought pattern will be a help in repeating the process when you encounter yourself thinking in a negative way.

 

Strategy #2 – Remove and Replace Negativity in Your Surroundings

Charles F. Glassman is a well-known doctor in New York who wrote a book titled, Brain Drain: The Breakthrough That Will Change Your Life.  He wrote, “Believing in negative thoughts is the single greatest obstruction to success.”  That is certainly true for real estate entrepreneurs who allow themselves to be ruled by those negative thoughts.  This being the case, you should ask yourself why you tend to think in negative thought patterns.

It’s no secret that we are oftentimes a product of our environment.  We think and act like the people we associate with.  The relationship between our thought process and the physical environment is also real.  If you work in a dark and dreary, cluttered, and depressing room, your thoughts will mirror your surroundings.  One quick way to improve your thought process and to remove the negative thoughts is to improve your physical environment. This includes cleaning the room where you work, the car you drive, and the way you dress.

It also includes removing negative things and people from your surroundings.  Don’t expect to have negative thoughts if you associate with people who are constantly complaining and voicing negative thoughts.  If you want to improve your entrepreneurial success, start by improving your friends and associates.

When you go and inspect a property, dress the part of the successful entrepreneur.  You will be surprised how much more success you will have when you already act successful.  As you remove negative people and things from your environment, you will quickly find yourself thinking in a more positive manner and positive thinking yields positive results.

 

Strategy #3 – Identify Personal Investment Fears and Don’t Let Them Drag You Down

There is no guarantee that any individual real estate purchase will be successful, but if you follow proven investment strategies, you will have a much greater chance of succeeding.  The reverse is also true:  There is no guarantee that any individual real estate purchase will fail!  Unfortunately, there are many new real estate entrepreneurs who fall into “the negativity trap” where they actually act and believe that failure is eminent.  Don’t let this happen to you.  It’s natural to have investment fears, but those fears can and should be controlled when you learn proven investment strategies, and then incorporate that training into your new real estate venture.  The more training you have, the greater your chance of success.  Still fear is something that can plague new entrepreneurs.

SEE ARTICLE: How to Overcome Personal Fear in Today’s Financial Climate

Before you can eliminate fear as part of your negative thinking, you need to be able to identify what that fear is actually based on.  Are you afraid of talking to people?  Do you have a fear of losing money that is needed for other purposes?  Take the time and identify the fears you have and then use concrete steps to overcome that fear.

If you allow fear to remain festering in your investment life, it can and will drag you down.  The best way to minimize or even eliminate fear of investing is to gain knowledge and experience.  Benjamin Franklin once said, “An investment in knowledge pays the best interest.”  This is certainly true when you are attempting to eliminate fear as part of becoming a more positive minded person.

 

Strategy #4 – Recognize Negative Thought Patterns and Change the Patterns

Your goal should be to change your entire way of thinking from negative to positive.  This requires you to be able to recognize and understand how the negative thought pattern works.  Negative thought patterns are not always with you but tend to occur during times of anxiety and stress.  As a new real estate entrepreneur, you may feel levels of stress occur when attempting to try something new.  When these negative thoughts surface, you need to take positive action and replace the negative pattern with positive thoughts.

As you take affirmative action and change negative thoughts to positive ones, you will feel better and can expect to experience a change in behavior.  Simply speaking, you will be able to become more focused on your new entrepreneurial activities.  The act of changing negative thoughts to positive ones may be difficult at first, but as you practice changing the way you think, you will see changes in other aspects of your life. After practicing this thinking process, positive thinking will become natural.

In essence you will start to become a more optimistic person who smiles more, listens more, is grateful and has faith in others.  These are all traits which will improve your outlook on life as well as your ability to overcome negativity.

 

Strategy #5 – Take Positive Action Steps That Yield Immediate Results

Action is critical if you want to overcome negative thinking.  Small steps that can be reproduced are essential elements to becoming a more positive optimistic person.  As a real estate entrepreneur, you will have the opportunity of locating and identifying properties that fit your investment strategies.  This process can be time consuming and might lead to some negative thinking.  If you find yourself in a situation where you begin to doubt your abilities or start to think that you can’t find the right property, then it’s time to take small positive action steps.

You might start by making a goal of reviewing a set number of properties.  Once you have reviewed and viewed the set number of properties, reward yourself with something special.  It might be a dinner or a treat, but the reward should be real.  When you start to see results for doing small things, the larger investment goals will happen automatically.  The key is to start experiencing success in small ways.  This will, in and of itself, improve your positive thought process.

Positive action is the key to improving positive thinking.  It is important to remember that positive thinking by itself will not remove all obstacles you might encounter in your entrepreneurial journey.  You will still need to put in the work to learn the strategies necessary for success, but that education becomes much easier when you think in a positive manner and then experience results from that education.

 

Strategy #6 – Keep a Journal and Describe How Specific Negative Expectations Can be Wrong

Keeping a journal is important in many aspects of your life and it can be a great help in overcoming negative thoughts.  When negative thoughts appear in your life, write down what those thoughts are and then describe why the thoughts are wrong and destructive to your future success.

If you have been searching for a great potential rental property and find yourself thinking, “there isn’t one in this area and I’m giving up, write it down.  Now try and explain on paper why this statement isn’t true.  Your reasons might include the fact that you haven’t worked with the right buyer’s agent or you haven’t actually physically inspected all the properties.  By writing down the reasons why the negative thought is wrong, you will find ways to take positive action and change both your negative thoughts and to receive positive results.  Once again, you are using action in small ways to create positive results.

This journal will also allow you to review episodes of your life when you went through times of trial in overcoming negativity.  The important part of the journal is not the negative thought, but rather the actual steps you could take in changing your mindset.

 

Strategy #7 – Read and Train Your Mind on a Daily Basis

Changing your mindset from a negative one to a positive one is a process that takes time and effort.  It’s not something that will happen by itself or take place without any effort on your part.  Like anything worthwhile, you must exert time and effort in changing the way you think.

Start by reading good books on self-improvement and improving your wellbeing.  But just thinking or reading about self-improvement is not enough.  If you want to become a successful real estate entrepreneur, then you need to study and become a proficient real estate investor.  Add books, tapes, and valuable resources to your training in real estate.

One of the reasons why many new real estate entrepreneurs get discouraged and start thinking in a negative manner is that the new entrepreneur doesn’t understand what to do and why to do it.  The more training you get concerning real estate, the greater your chance of success.  There is an additional advantage to receiving this additional education.  The very act of studying on a daily basis will train your mind to become more positive.

Don’t be afraid to use these strategies in all of your business endeavors. Reading and Training your mind (info snacking) can help in online resources such as amazon, ebay, selling portal. All of these areas can be used to increase knowledge regarding real estate.

 

Strategy #8 – Make Gratitude a Part of Your Daily Life

Most well-trained professionals will say that gratitude is an essential element in achieving a positive mindset.  Positive psychology has shown that gratitude is more than feeling thankful, it is a deeper appreciation for someone or something that produces longer lasting positivity.

When you are thankful and grateful for something or someone, it is almost impossible to be in a negative mindset.  On a daily basis you can start to show gratitude for the help of others and for the attitude and caring of friends.  This is especially true when you are learning tips and strategies from other investors and mentors.  The more gratitude you show and express on a daily basis, the more positive your mindset will be.

Today is the day to change your mindset to a positive one.  Leave those negative thoughts behind and learn to be a more optimistic person by applying these simple, but effective strategies to overcome negative thinking.

How can you minimize wear and tear on your rental property when allowing pets?

Pets are man’s best companions, and many people own pets. If a property does not allow pets then the landlord is going to lose a substantial portion of the market. Therefore, accepting tenants with pets is a brilliant move. However, pets can urinate on carpet, gnaw on furniture and disturb the neighbors. So, how can you minimize the wear and tear on your rental property when allowing pets? The best thing to do is to make your rental property pet-friendly by following these simple yet useful tips:

  • Flooring – The most practical materials for flooring include tile, engineered hardwood and vinyl. They are more practical than carpet because they are easier to clean and do not pick up fur, stains or odors. These materials do not have to be nailed or glued and can be easily installed over the existing floor. Furthermore, these materials are water-resistant, less likely to scratch or stain, long lasting and pleasant for the feet.
  • Wall finishes – Use paint that is durable and easy to clean. It is better to choose a quality brand name as these usually last longer between repaints.
  • Window treatments – It makes more sense to install blinds rather than curtains because they are less likely to be clawed or chewed on, especially by cats.
  • Kitchen – Make sure that the materials you use in the kitchen are easy to clean because odors, food waste and dust can cause damage to the kitchen. Use plastic for countertops instead of wood as plastic is easier to clean and wears off slowly. Install splashguards behind the sink and counters to save the walls from water damage.
  • Install security screens with pet doors – Installing cat flaps or doggie doors makes it easier for pets to enter or leave the apartment without needing to scratch on windows or doors.
  • Ventilation – Odors can built-up if pets are left indoors for long periods of time. Improve ventilation by installing exhaust fans and security systems on windows so they can be left open. These steps will reduce the risk of lingering odors.

Regular inspections are vital. Make sure that you inspect your property at least twice a year for any wear and tear.

Workshop Update | Week 41 – Oct 10–Oct 14

This week, Response delivered 15 Real Estate and Stock workshops. Our overall customer experience score, for all surveys received, was a 5 out of 5. We saw over 611 students. Here is what some students shared about their experience:

“Mind blowing!” —Richard T.

“The information is valid and well done.” —Doug C.

“This investment opportunity is a wealth of information everyone should take advantage of.”—Felix Q.

How to Build a Successful Real Estate Investing Team in 5 Easy Steps

Teamwork has always been recognized as one of the primary reasons why some business ventures succeed while others falter and sometimes fail altogether.  This is certainly true when entrepreneurs decide to invest in real estate as a way to improve their financial lives.  Unfortunately, many inexperienced investors start their real estate career without a clear idea of how to build a support team.

Your real estate support team should consist of many different people who fill roles similar to the players on a championship basketball team.  Just as the point man calls the plays and sets up how the ball is moved down the court all the way to the hoop, the real estate entrepreneur will develop the plan, guide the other members of the team, and ultimately be responsible for the success of the investment.

You are the real estate entrepreneur and you will be responsible for the success of your investment career, but the journey becomes much easier if you learn who should be on your investment team and what roles these individuals will assume.  Michael Jordan is recognized as one of the most prolific and well-respected champions ever to set foot on a basketball court.  In an interview, he once said, “Talent wins games, but teamwork and intelligence win championships.”

Every real estate investor will have different goals and will also choose different strategies to accomplish those goals.  What successful investors have in common is the ability to surround themselves with a support or investing team that is united in purpose and works toward well-defined goals and objectives.  Let’s look at 5 easy steps you can take that will help you build a successful real estate investing team.  We can call these the 5 D’s for team building success.

 

Step #1 – Decide on Your Personal Real Estate Investment Strategy

Everything starts with a well-thought out real estate strategy.  Prior to jumping in to the real estate arena, you need to decide which strategy or strategies you are going to pursue.  There are multiple strategies available for investing in real estate.  Perhaps you are most interested in finding potential rental properties and then building a portfolio of properties.  If this is your goal you will need to understand all the responsibilities that come with being a landlord.  On the other hand, you might be more interested in locating “fixer up properties” and then rehabbing them and making a profit.  It doesn’t take long and you will see that there are a number of real estate investment strategies that make sense.

Once you decide on the basic real estate strategy you are going to follow, you will need to establish some basic objectives in terms of timing.  The more specific you are when setting these preliminary objectives, the easier it will be to accomplish them.  Unless you set realistic timetables, it will become very difficult to stay focused, and if you lose focus, you will also become discouraged.

SEE ARTICLE: 6 Easy-to-follow Steps That Can Stop Disappointment from Turning into Discouragement

 

Step #2 – Define Your Team Roles

Having a basic understanding of where you want to go is important, but now you need to be more focused on what exactly it will take to make it happen.  If you are like other real estate entrepreneurs, you might be a little overwhelmed by the scope of the task and the amount of work that needs to be done.  There are properties to find, inspections to be made, appraisals to be arranged, repairs to be coordinated, financing to be secured, closings to be coordinated, and the list seems to go on and on.

If you try to do everything yourself, it’s entirely possible that you will miss your timetables and more often than not, actually fail to accomplish your goals.  Now it’s time to consider bringing in extra help and set up an investment support team.  These individuals won’t necessarily be employees, and in fact most of them won’t be.  They will probably be professionals in other fields that will help you by simply doing their regular work.

Let’s look at a few roles that these other professionals will fill.

  • Realtors and Brokers. It’s inherent that you will need to become extremely familiar with the real estate market and a good realtor or broker will help you do that.  You will need to be very open and straight forward with your realtor so that you are both on the same page.  Once the realtor knows what you are looking for, the search for the right properties becomes much easier.  It is highly recommended that you consider engaging a good “buyer’s agent” who will work on your behalf and not for the seller.  There really is a difference.

SEE ARTICLE: “5 Key Factors that Will Help You Understand the Importance of a Buyer’s Agent

  • Real Estate Attorney. A good real estate attorney will help you accomplish three main objectives.  First, your attorney will help you structure deals that work for both parties.  It is imperative that you find an attorney who understands your goals and who will work to find solutions and not just problems.  Second, your attorney can protect you from unknowingly signing a document that puts you in peril down the road. And finally, your real estate attorney can help you follow procedures that make negotiation much easier when dealing with the other parties to your transactions.
  • Financing Professional. This individual might be a loan officer or bank official.  It might also be a mortgage broker.  Not only will this member of your team be familiar with the different financing possibilities, but he or she will also be fully informed of your financing needs as well as credit problems.  The more familiar this person is with your financial requirements, the better deals you’ll be able to make.
  • Insurance Agent. You may need property insurance, rental insurance or even business liability insurance.  Insurance serves a real purpose when investing in real estate.
  • Accountant. You may think that you will only need an accountant when you develop a portfolio of investment properties, but this is just opposite of the truth.  You need an accountant on your team who can help you structure deals within your financial capabilities.
  • Title Company. A great working relationship with a quality title company will help you secure title insurance and set up closings.  When problems arise, and they will, a good title company can help solve those problems and avoid failed closings.
  • Networking Person. You may need a “bird dog” or individual who will do specific jobs for you.  This person may work on commissions or be an employee, but he or she will need to network with the remaining members of your team.

 

Step #3 – Draft Qualified Team Members

Once you have identified the key positions on your potential real estate support team, you need to find the individuals who will fill those roles.  You may start by networking with other real estate investors in your area and asking who they use for insurance, title work etc.  They will usually be happy to share that information with you when you are asking for the names of quality professionals.  They may share with you information on realtors, but remember that you are interested in finding realtors who will work FOR YOU.

You can also talk with people you personally know in banking and insurance for help in finding people who will fill those roles.  As more and more of your friends and associates know about your desire to invest in real estate, it will be easier to solicit recommendations for people or companies to become part of your support team.

Identifying the key people to fill the roles on your team is only part of the solution.  Now you need to talk to them and let them know what your investment strategy is and to show them how they will benefit by becoming part of your team.  When you succeed, other members of your team will also succeed.

You need to spend time with the potential members of your team and let them know how you are going to work with them on win/win solutions.  It’s not just about your becoming successful.  When you succeed, they succeed.

 

Step #4 – Delegate Responsibilities

Never forget that you are the leader of the team.  It’s your real estate investment strategy and it’s up to you to make things happen.  The only way you are going to accomplish this is to delegate responsibilities.  Delegation is important for efficiency.

If you assign a task to a member of your team, you need to allow them to accomplish it.  While you are establishing a team, you need to learn which members of the team take responsibility and run with it.  The only way this will happen is for you to let go and then allow the member of your team to follow thru.  This may sound like you are just stepping out of the way, but the opposite is true as long as you start with explicit instructions on what you want accomplished.

Let’s consider the idea that you are asking your realtor (who is a potential member of your team) to find the best properties that might be used for rentals in a certain geographic area.  Start by including exact requirements for the properties as far as price, number of bedrooms and baths, and proximity to good schools.  Your list of requirements could be fairly extensive, but make sure it is complete.  Now give your realtor time and see what they come up with.  You are delegating the responsibility to the realtor, now you need to step back and let them assume that responsibility.

Once you delegate a responsibility to a team member, you will need to follow thru and see that the team member accomplishes the task.

 

Step #5 – Don’t Take all the Credit

If you want the members of your team to continue to support you and work with you, you will want to show your appreciation for their efforts.  This appreciation can be expressed through both words and actions.  If you make a great deal on a real estate property and certain members of your team performed a needed role, don’t forget to share some of the rewards with them.

When you remember that you are guiding the team and performing the role of the point guard on the basketball court, it becomes much easier to recognize the contributions of the other members of your support and investment team.  If the point guard hogs the ball and fails to get the ball to the team member ready to make an easy basket, the score is never made.

Henry Ford had a dream and a vision that evolved into one of the largest and most successful companies in the country.  He understood the value of working together as a team.  He is quoted as saying, “Coming together is a beginning, keeping together is progress, working together is success.”  His view of teamwork can be the catalyst of building your successful real estate investing team in 5 easy steps.

Workshop Update | Week 39 – Sep 22–Sep 28

This week, Response delivered 14 Real Estate and Stock workshops. Our overall customer experience score, for all surveys received, was a 5 out of 5. We saw over 744 students. Here is what some students shared about their experience:

“Can’t wait to get started!” —Catherine M.

“I will forever be grateful for this new transition in my life!” —William F.

“This event is a mind-shifter! I am ready for this exciting adventure.”—Juan P.

5 Key Factors that Will Help You Understand the Importance of a Buyer’s Agent

Every new real estate investor soon comes to grip with the realization that the purchase of a property can be a daunting and sometimes complicated process.  Does everything start with the actual offer on the property?  Sadly, the answer really starts much sooner.  Before you ever purchase a property, you need to be able to determine if the property in question is the best property and if the price you are willing to pay is the best price.  Assuming that it is the right property, the price then becomes even more important.

It’s entirely possible that you have heard of a “buyer’s agent” and been a little confused.  Many new real estate investors mistakenly believe that if you automatically call the number on a listing sign, you will have an agent that will work in your behalf.  Nothing could be further from the truth.  That agent has signed a contract to work for the seller and to do everything in his or her power to represent the seller.  Nowhere in such listing contract does it say that the listing agent will work to represent the purchaser of the property.

It’s time to understand just how important a good, well-qualified, and knowledgeable buyer’s agent can be.  The term “agent” comes from the concept of “agency” which generally means an action or intervention to accomplish a certain result.  Thus, a buyer’s agent refers to the action of purchasing a property for the benefit of the buyer.  When you engage a buyer’s agent you are engaging someone who is going to work for you, negotiate for you, and stand in your best interest.

As a real estate investor, you should ask yourself if you really need a buyer’s agent.  In order to answer that question, step back a moment and ask yourself these three questions:

  • Do you want to lower the purchase price of the subject property?
  • Are you confident that you can negotiate the best purchase price possible?
  • Do you know who is representing you in the transaction?

Once you answer those questions, you will probably come to the conclusion that you might need additional help to secure the best deal.  That help can come through a well-qualified buyer’s agent.  If you are ready to become a better real estate professional who secures the best deals, you need to consider the following factors about a real estate buyer’s agent.

 

 

Key Factor #1 – Understand the Benefits of Using a Buyer’s Agent

There are major benefits a real estate investor can receive when using a knowledgeable and well qualified buyer’s agent.  The only real negatives generally appear when an investor has chosen an agent who is not knowledgeable or qualified.  With that caveat in mind, let’s look at several ways a buyer’s agent can benefit you, the purchaser of the property.

  1. Locating the best property. The first thing you need to do is to decide what type of property or real estate strategy you are going to pursue.  Are you going to search for “fix up property”, “potential rental property”, “raw land”, or some other type of property?  You need to determine exactly what type of property you are searching for.  Once you have done this, you will need to pass on this information in specific detail to your selected buyer’s agent. (Later in this article, we’ll discuss how to find and identify a good buyer’s agent.)

Your buyer’s agent needs to be able to distinguish between your wants and needs.  You should let the agent know exactly what you are trying to accomplish.  When you do this, your buyer’s agent will schedule appointments to view the properties and should be able to provide you with advance information regarding both the properties preliminarily selected along with critical facts about the neighborhoods.

  1. Negotiate the offer. This is a major benefit for you, the purchaser of the property.  The buyer’s agent will act as a third party and eliminate uncomfortable situations between yourself and the seller.  Keep in mind the fact that the listing agent of the property is contractually bound to represent the seller of the property.

The buyer’s agent can suggest appropriate starting offers and terms that might be acceptable to the seller.  In all likelihood, these terms might not be the price and terms that the listing agent is offering.  A good buyer’s agent will have researched other sales in the neighborhood and be prepared to have reasons for the price and terms you are offering.  This negotiation is generally made directly between your buyer’s agent and the listing agent.  Once the offer is accepted, the buyer’s agent can help and assist in drafting up the final closing documents.

  1. Recommend and find other real estate professionals. Depending upon the exact strategy that you will be employing, it is very possible that you might need the help of a well recommended contractor, mortgage broker, real estate attorney, appraiser, property inspector, mover, or other professional.  Your buyer’s agent should be knowledgeable about these individuals and be able to provide resources to help close and finalize the purchase of the property.  Having this information in a timely fashion will help you overcome obstacles that often appear when purchasing property.  It may be something in the home inspector’s report, be an appraisal problem, or some other setback.  When you have knowledgeable experts at hand, you are in a position overcome setbacks or obstacles that derail your investment strategy.

SEE ARTICLE: How to Convert Stumbling Blocks into Stepping Stones

 

Key Factor #2 – Understand the Difference Between a Buyer’s Agent and a Seller’s Agent

You must not believe that the buyer’s agent and the seller’s agent are one and the same.  They are not. When you use the seller’s agent (the listing agent) to negotiate on your behalf, you are positioning yourself in an untenable situation.  The buyer’s agent is working for the purchaser of the property, while the seller’s agent (the listing agent) is working for the seller.  Yes, you want to buy the property and yes, the seller wants to sell the property.  The difference is that you want to purchase the property at a price and terms that make sense for you, while the seller is trying to maximize the sales price on the same property.  In most cases, these goals are not the same.  The seller’s agent is bound by fiduciary responsibility to represent the seller, and not you.

Who do you want representing you?  Do you want the seller to know the absolute highest price you will pay before you even present the offer?  If you elect to use the seller’s listing agent to negotiate for you, you have already lost the negotiation issue.  Let’s take an example from the real world.  If you owned a rental property and your tenant was injured while repairing his motorcycle in your garage and sued you because your garage didn’t provide enough safety equipment, would you want the tenant’s lawyer representing you as well as your tenant?  I’m sure the answer would be a resounding “no”.  The same thing is true when negotiating with a seller.  You don’t want someone bound to and reporting to the seller to be representing you, the buyer.

 

Key Factor #3 – Determine How to Find a Good, or Even Great, Buyer’s Agent

Before you look for a good buyer’s agent, you must decide if you want to use one.  Once you make this decision, you must become very selective in the process.  What you don’t want to do is to choose someone who is not qualified or knowledgeable.  You want to find someone who understands the role he or she will play in the property purchase.

The first thing we recommend is that you immediately disregard the listing agent as a potential buyer’s agent.  The listing agent is legally bound and responsible to the seller of the property.  With this being the case, how can that individual represent you as a buyer’s agent?  You can be choosy when selecting the buyer’s agent.  You may receive recommendations to use your sister’s uncle or some family relative.  While it is difficult to say no to these type of recommendations, it is usually wise to do so.

What you are looking for is someone who truly understands the role of a buyer’s agent and is prepared to fulfill the responsibilities that come with this opportunity.  You can search online for “buyer’s agents” in your specific locality.  It is also possible to get recommendations from other friends who have purchased property using a buyer’s agent.  We suggest that you get several recommendations and then interview these individuals and find out how knowledgeable they are.  During the interview process, try asking these questions of each individual:

  1. Do you accept listings? If the agent does accept listings, this means that he or she is automatically working for the sellers of those properties.  Great buyer’s agents specialize in working with buyers and don’t accept listings from sellers, thus avoiding conflicts of interest.  If the agent accepts regular real estate listings, the agent is basically saying that he or she is working as a dual agent.  Does this sound like what you want?

A final note about agents who work as “dual agents”.  It is not illegal to have an agent work on your behalf as well as for the seller of the property, but when you do, you are competing against yourself.  When an agent agrees to show you a property where he or she is the listing agent, that is exactly what you are doing.  Many real estate professionals have found it more profitable to contract with a buyer’s agent and have that agent contact the listing agent.

  1. What type of properties do you specialize in? In order to increase your success in real estate, you need to find a buyer’s agent who both understands your specific real estate strategy and has had experience in finding these properties.  When your buyer’s agent has past experience, the learning curve will be shortened.
  2. What neighborhoods do you specialize in? You want to find an agent who is familiar not only with the type of property you are interested in, but, knows the area very well.  Hopefully, you will find an agent who has both the experience as a buyer’s agent, but also has experience on a personal basis.
  3. Are you working part or full-time? You need to understand from the beginning how much time the individual will have to devote to scheduling and showing you properties.  If the agent is working only part-time, ask very specific questions as to the availability he or she will have to working with you on your schedule.
  4. What references can you provide? You would be well-served to have references from other real estate purchasers who have used the agent.  You might also ask for references from other professionals like appraisers, mortgage brokers, or home inspectors.  Once you get a list of references, follow through and talk to each of them and ask their professional opinion of the agent.

 

Key Factor #4 – Understand How the Buyer’s Agent Gets Paid

The first question that often comes to mind is “Who pays the buyer’s agent?”  In most cases the fee paid to the buyer’s agent comes from the actual sale of the property.  When the property owner lists the property, he agrees to pay a real estate commission of 5 to 6 percent of the purchase price of the property.  The fee is paid through the listing broker and is generally split 50/50 between the listing broker and the buyer’s agent broker.

Most people say that the seller is paying for the buyer’s agent because the money for the buyer’s compensation comes from the sale of the property.  When you analyze the situation more closely, you recognize that the actual money comes from the payment made by the purchaser of the property to the seller.  Yes, it comes from the seller, but only after the buyer has actually paid the money to the seller.

Professional buyer’s agents have a contract they sign with you, the purchaser, of the property.  This is done when you engage the professional buyer’s agent and is called and Exclusive Buyer Agency Agreement.  The contract between yourself and the agent specifies what he or she will do on your behalf.  Before you sign such an agreement, make sure that you are satisfied with the agent.  The buyer’s agent will work for you.  You must be satisfied that he or she is just what you want.

The agreement is generally for three to six months and can be cancelled by yourself if you are not satisfied with the agent.  Many of these agreements have a clause that states you will pay a minimum amount (often $2,500) from any purchase arranged and negotiated through the buyer’s agent.  This fee comes from the listing commission paid through the seller of the property.  In the case of properties offered “For Sale By Owner”, the fee could be paid separately, or the buyer’s agent may get the seller of the property to pay the fee.

 

Key Factor #5 – Understand the Role of a Credible Professional Buyer Agent

There is an organization that is known as “The National Association of Exclusive Buyer Agents” and is known as (NAEBA).  This organization is a membership organization of buyer agents.  The organization selects agents who don’t accept listing contracts with sellers as the listing contract makes them responsible to the owner and creates an immediate conflict of interest.

You can search for the best buyer’s agents in your specific area by using a search engine and searching for the terms:

  • Real Estate Buyer’s Agents
  • Buyer’s Agents
  • Professional Buyer’s Agents

Try matching the terms with your specific locality and you will find buyer’s agents in your area.

A final word to the wise.  There are always two parties to a real estate transaction – the buyer and the seller.  As a buyer, you want the best price possible on the best property available, according to the best terms you can negotiate.  Consider strongly searching out a knowledgeable and professional buyer’s agent to accomplish your goals.

 

Monthly Summary Report – September 2019

September 2019


In September, the website featured 7,641 written testimonials, an increase of 363 testimonials over the month of August.

These comments come in many different forms, most of them are taken off of the handwritten surveys collected at our 3-day sales and training events.

There are currently over 1,366 scanned surveys that were handwritten by customers and don’t have any of the comments redacted, 58 of which were added during the month of September. These survey cards can be viewed at https://response.com/customer-feedback.

There are 780 video testimonials, including 140 premium professionally filmed and edited videos that can be viewed at https://response.com/response-marketing-reviews/. As of September 30th, these videos had over 24,885 plays. The premium videos are on the top of this page and you can see they were generally filmed in the office at Response.

You can also check out the 41 current ambassador profiles here https://response.com/ambassadors/, two of which tell their experience in video interviews. In the coming months, you will see we will be adding more video interviews with each of these people telling their stories about their experience with Response.

Our advisory board members swelled from 2,769 in August to 2,859 by the end of September, and 108 with profiles and pictures. We are continuing to reach back to old members for updated profile pictures and profile details, all newly added advisory board members are coming with completed profiles and pics.

The website is averaging 4,776 new visitors each week, bringing the total weekly average pageviews to 34,679!

On the site, we showcase 767 clients who have submitted files for their Real Estate tuition reimbursements, 575 of those have been formed into summary baseball cards. https://response.com/tuition-reimbursement-re/

Done a Deal submissions are at 440, with 171 baseball card summaries. https://response.com/done-a-deal/

As of today, there are 422 blog posts featuring articles about the real estate market and investment strategies, workshop event statistics including customer feedback, and community involvement events Response participated in.

We recently updated a number of trainer bios to include some “get to know you” info for the trainers on their profile in the form of a short video, you can see some of them here now, https://response.com/meet-our-trainers/ in the future we will continue to update these profiles and are hopeful to provide one of these videos for all of the team members on the site.

The Response.com website is continually evolving as we grow. The following pages have received updates:

6 Time Management Strategies that Will Improve Your Effectiveness as a New Real Estate Entrepreneur

Eventually every new real estate entrepreneur soon comes face-to-face with the fact that there never seems to be enough hours in the day to accomplish everything on the “to do list.”  In fact, it’s not uncommon for the new entrepreneur to become discouraged, or even stop investing altogether.

The tasks and responsibilities may seem overwhelming when you stop to think that you need to learn how to find good loans and then go through the mechanics of closing a deal, educate yourself on the most effective investment strategies, establish a network of people who can help you develop a real estate team, manage rental properties, and finally, locate the best deals.

Fortunately, there is an answer to this dilemma, and it’s simply learning effective time management strategies that have been proven to work for seasoned real estate investors all across the country.

 

Time Management Strategy #1 – Start with a Good Business Plan

Every good business starts with a good business plan.  Wise entrepreneurs understand that a well-developed business plan is a strategic tool that allows them to focus on the specific steps necessary to achieve success in real estate investing.  The business plan is a clear statement of your vision and objectives.  Unless you spell out where you want to go, you’ll never get there.  The business plan for the wise real estate entrepreneur is the roadmap for your future success.

This plan will help you make wise decisions while identifying your strengths and weaknesses.  It will also help you implement the specific real estate strategies you intend to follow.  If you decide to pursue a rental property strategy, the business plan should include specific action steps necessary to meet your goals.  Perhaps you intend to locate fixer up properties and then wholesale them to other investors.  Regardless of the real estate strategy you intend to use, the business plan should spell out what you are going to do, along with the specific action steps necessary to accomplish your goals.

The plan itself doesn’t have to be extensive in size, but it should include six key elements.

  • Mission Statement or Vision. You need to spell out what you want to accomplish.
  • Market Analysis. This part of the plan will spell out in detail what the real estate market is like in your geographic area.  It should include a realistic outlook as to the future prices of property in the locality.
  • Specific Real Estate Strategy. What real estate investing technique are you planning on following?  You should spell out in detail the specific steps necessary to complete the strategy.
  • Real Estate Team. You will need to begin developing a team of individuals or companies that can help you accomplish your goals.  They may include lenders, appraisers, contractors, real estate brokers etc.
  • Market Competition. Competition can help you determine the potential market.  If you elect to find and purchase rental properties, you will need to know what rental rates are doing.  The more you know about the competition, the better chance you’ll have of becoming a success.
  • Financial Needs and Assets. Be realistic as to your ability to raise money and complete purchase agreements.

Your future success will be dependent upon your ability to set goals and then establish realistic ways of meeting those objectives.  The more complete you make your business plan, the better chance you will have of accomplishing those goals.  Finally, your business plan can only succeed when you understand time management and then learn to control time.

 

Time Management Strategy #2 – Adopt the Belief that Time Is Money

Your time is valuable.  What you do and how you do it will depend a great deal on the amount of time you can dedicate to the task.  Stephen Covey, the well-respected author, once wrote, “The key is not spending time, but investing in it.”  When you learn to believe that time has value, you will begin to value the time you spend on each individual real estate task or goal.

Perhaps the biggest robber of our time is procrastination.  By definition, the word simply means delaying or postponing something.  In business, the word takes on an even more important significance.  When you delay or postpone taking action on business plan objectives, you are signifying that you don’t really want to experience success.

SEE ARTICLE: Procrastination – The Roadblock to Unlimited Success

In order to eliminate procrastination and prioritize the value of time, you must first review where you presently are spending your time.  This starts by doing a “time review”.  This review should consist of a realistic look at how you spend every waking AND SLEEPING minute of the day.  Far too often, we’re not even aware of the amount of time that we waste on a regular basis.  Once you see how much time you are wasting, you’ll begin to value the time you can dedicate to your new real estate entrepreneurship.

 

Time Management Strategy #3 – Implement a Time Management System

Time management is one of the most talked about strategies for improving productivity in business, and it can certainly be one of the best ways to increase your success in real estate investing.  There are numerous time management programs and systems available for the entrepreneur today.  If you elect to purchase one of these systems, make sure that you commit to follow the program on a regular basis.  Consistency is critical if you want to improve the way you spend your time.

Writing down how you spend your time, and then recording both your calendar events and “to do” tasks is an important part of every time management system.  The very act of recording how you spend your time will improve time management.  Many entrepreneurs are unaware of their wasted hours until they visually see how much time is spent on individual tasks.  It’s not enough to just record where you spend your time now, but you must also write down where you intend to spend your future time.

One of the benefits of being an entrepreneur is that you can determine how you spend your time and when you do so.  This is also one of the reasons why many entrepreneurs fall into the trap of “limited time and too much to do.”  When this happens the entrepreneur oftentimes fails to treat the entrepreneurship as a “regular 9 to 5 job.”  When you have a regular 9 to 5 schedule, you know you have to be there at a certain time and you leave at a certain time.  The entrepreneur understands that he or she has flexible hours and is not restricted by those time constraints. You need to treat your real estate investing opportunity much like a 9 to 5 job.  You can select the hours you work, but you need to be just as dedicated during those hours as you would to a regular job.  When you do so, you will be able to accomplish much more in less time.

The secret is to live by as much of a schedule as you can.  Setting a schedule that you can follow on a regular basis will help set limits on the time you take for individual tasks and goals.

 

Time Management Strategy #4 – Prioritize Your day

Your daily schedule will have more value and be much easier to follow when you learn to prioritize what you do every single day.  Each day should begin with a clear focus of what you want to accomplish during the day.  When you finished the prior day, you may have individual tasks that are carried over too the next day.  Just because they were carried over from the earlier day doesn’t necessarily mean that those tasks have the highest priority.  Your focus must refresh on a daily basis to the highest priority things each day.

The high value items must always come first.  This by its very nature means that your time management system must be flexible and subject to change, but it must be ruled by priority.  If you left mowing a tenant’s lawn from the day before, it’s not necessarily the highest priority for today.  Certainly, a property closing would have a much higher priority.  Therefore, every day needs to begin with a new list of priority tasks and timetables.  It’s also essential that you allow the right amount of time for the highest time value items.

Everything begins with organizing yourself and your time.  This would indicate the need to follow a schedule and minimize distractions as much as possible.  As an entrepreneur, you may find it far too common to quit doing a high value task and slip into doing something of much less value.  Don’t allow yourself to do this.

 

Time Management Strategy #5 – Learn to Delegate

The very act of delegating allows you, the entrepreneur, to gain time to do more important tasks.  When you delegate properly, you increase your effectiveness along with more energy to use for higher priority tasks.  Learning to delegate doesn’t mean that you abdicate responsibility, but rather you are forcing that responsibility down to someone else.  Yes, you still have the responsibility, but now you have someone else to help you accomplish the task.

You don’t need to be a specialist in everything, and chance are that you aren’t.  Each of us has certain talents, and this is certainly true for real estate entrepreneurs.  If you want to have the highest chance of success in real estate investing, you need to build a powerful real estate team.  Naturally, you will want to involve your financing people, real estate experts, contractors, and possibly property managers.  Your specific investment strategy will indicate who could be the potential members of your team.

Once you have selected the individual members of your success team, you need to allow the individuals the opportunity to succeed.  Give them responsibility and exact assignments and expectations as to when those assignments will be completed.  When you add responsibility to an assignment, you’ll be surprised at the results.

Many members of your success team may not actually work for you, but rather with you.  This does not mean that you won’t give them assignments or responsibility, just the opposite is true.  If you need the help of a realtor, make a specific assignment to find a specific type of property in a specific locality, and you will be surprised what happens.  In a short period of time you will have found a potential real estate property and will have saved countless hours in the process.

Delegation in developing a real estate entrepreneurship pays dividends, but only if you use it.  John C. Maxwell is an American author who has written many books on leadership.  He once wrote, “If you want to do a few small things right, do them yourself. If you want to do great things and make a big impact, learn to delegate.”

 

Time Management Strategy #6 – Balance Your Life

Investing in real estate can pay big dividends, but it shouldn’t happen at the cost of personal priorities and relationships.  It may seem natural to put real estate investing at the top of your list of priorities, but, doing so could destroy your most essential personal relationships if you don’t have balance in your life.  Once you establish your priorities, you will see that there is room for family, friends, and yourself. The key is to manage your time in such a way as to protect those relationships.

There is a principle known as “the Pareto Principle”.  According to this principle 80% of your efforts come from 20% of your results.  In essence, you could be spending most of your time accomplishing very little.  This being the case, doesn’t it make more sense to use your time more effectively.  When you do this, you’ll have the time to protect both your “family time” and your “my” time.

Balance in your life means that you will handle stress better and accomplish more.  In order to achieve this, you may need to make choices that involve time.  If you plan on spending time with children or your significant other, you need to have a time management system that allows this to take place.

If you fail to adopt a solid time management system, you are setting yourself up for failure in your real estate investing future.  Real Estate doesn’t need to fill all 24 hours of your day, but when you learn to manage your time properly, it can provide rewards that will last year after year.

Workshop Update | Week 38 – Sep26–Sep 29

 

This week, Response delivered 14 Real Estate and Stock workshops. Our overall customer experience score, for all surveys received, was a 5 out of 5. We saw over 646 students. Here is what some students shared about their experience:

“Great! I’m excited to get going and working with mentors.” —Carolyn T.

“Excellent instructor!” —Lorraine A.

“To say that I’m looking forward to my continued education with Response would be an understatement!”—Marquis T.

Monthly Summary Report – August 2019

August 2019


In August, the website featured 7,278 written testimonials, an increase of 360 testimonials over the month of July.

These comments come in many different forms, most of them are taken off of the handwritten surveys collected at our 3 day sales and training events.

There are currently over 1,300 scanned surveys that were handwritten by customers and don’t have any of the comments redacted, 60 of which were added during the month of August.

There are 735 video testimonials, including 124 premium professionally filmed and edited videos that can be viewed at https://response.com/response-marketing-reviews/. As of August 31st, these videos had over 20,219 plays. The premium videos are on the top of this page and you can see they were generally filmed in the office at response.

You can also check out the 40 current ambassador profiles here https://response.com/ambassadors/. In the coming months you will see we will be adding substantial video interviews with each of these people telling their stories about their experience with response.

Our advisory board members swelled from 2,646 in July to 2,769 by the end of August, and 98 with profiles and pictures. We are continuing to reach back to old members for updated profile pictures and profile details, all newly added advisory board members are coming with completed profiles and pics.

The website is averaging 5,027 new visitors each week, bringing the total weekly average pageviews to 33,264!

On the site, we showcase 759 clients who have submitted files for their Real Estate tuition reimbursements, 509 of those have been formed into summary baseball cards. https://response.com/tuition-reimbursement-re/

Done a Deal submissions are at 440, with 110 baseball card summaries. https://response.com/done-a-deal/

As of today, there are 408 blog posts featuring articles about the real estate market and investment strategies, workshop event statistics including customer feedback, and community involvement events Response participated in.

We recently updated a number of trainer bios to include some “get to know you” info for the trainers on their profile in the form of a short video, you can see some of them here now, https://response.com/meet-our-trainers/ in the future we will continue to update these profiles and are hopeful to provide one of these videos for all of the team members on the site.

The Response.com website is continually evolving as we grow. The following pages have received updates:

Response and United Way’s Day of Caring

United Way’s Day of Caring | September 2019

Meghan N., Community Outreach VISTA, EveryDay Strong, United Way of Utah County, reports:

“I can’t thank you and your team enough for your help in Day of Caring! The kids absolutely loved your team and the activity.
I hope you all had a great experience and got to feel the happiness you all brought to the school. Thank you for making a difference
for those kids. You all are so great! We hope to see you next year!”


Workshop Update | Week 38 – Sep19–Sep 22

This week, Response delivered 15 Real Estate and Stock workshops. Our overall customer experience score, for all surveys received, was a 5 out of 5. We saw over 759 students. Here is what some students shared about their experience:

“So excited to get started!” —Joe M.

“Amazing! Thank you for changing my life!” —Nikki M.

“Enjoyable, eye-opening, and a wealth of information!”—David W.

6 Reasons Why Wholesaling Makes Sense for Real Estate Entrepreneurs

Wholesaling real estate is commonly described as the strategy of putting a piece of property under contract with the intent to assign the contract to another buyer. This type of real estate purchase approach is generally used with distressed properties where the real estate entrepreneur doesn’t plan or fixing up or rehabbing the property.

In order to profit from this stratagem, you will need to put the property under contract at a lower price than the potential market value. In doing so, you allow the final buyer to make a profit when the property is upgraded or renovated. The key to effective and profitable wholesaling is your ability to find properties that can be purchased at below market value. We call properties in this condition distressed properties.

In almost all cases, the sellers of these properties are extremely motivated, and as such, will likely be willing to dispose of the property for a substantially reduced price. Many, if not most, of these properties require cosmetic repairs, remodeling, or substantial cleaning in order to bring the property up to full market value. Someone will have to do the upgrading or repairs, but that person is not the wholesaler.

The wholesaler finds the deal, evaluates the repairs, secures a ready buyer who is willing and capable of doing the repairs, and then sells or assigns his or her position to the end buyer. In doing so, the wholesaler can make an immediate profit from the transaction. There are no guarantees that you can make a profit when buying and selling real estate and wholesaling is no different. However, if you, as a real estate entrepreneur, follow a proven strategy, do the proper due diligence, and get the proper education, wholesaling can make a lot of sense. Let’s review six important reasons why this is true.

 

Reason #1 – Great Way to Learn and Start Real Estate Investing

Wholesaling real estate is certainly one way to profit from real estate and in order for it to work, it is essential that you are committed to real estate as an investment vehicle. It is assumed that you will incorporate the proper mindset, have a positive attitude, and be willing to learn from the experiences of others. You may be new to real estate or you may be a seasoned investor, but regardless of your personal situation, you can gain a great deal of additional knowledge about investing in real estate, negotiating with sellers, and understanding the local real estate market, when you follow the principles of wholesaling.

Real estate in every geographical area has unique characteristics. As a real estate wholesaler, you will become extremely familiar with the local market. In order to evaluate deals as to whether they make economic sense, you will need to become competent in determining market values, understanding basic repair and renovation expenses, and adapt at communicating one-on-one with sellers, brokers, and professional title companies. This may seem like daunting undertakings, but it will happen as you learn and actually start doing something.

Wholesalers also need to learn basic direct marketing techniques as they apply to real estate. These techniques include everything from drafting flyers, designing signs, and writing letters to home owners. Successful wholesaling entrepreneurs also learn to use the Internet and how to effectively use websites. All of this becomes much easier when you follow step-by-step guidance from successful mentors.

Part of your education and learning experience will come from learning how to locate the motivated sellers and distressed properties. Some real estate wholesalers start by focusing on foreclosure and pre-foreclosure properties. You can also work with existing multiple listing properties (MLS Properties) once you learn how to distinguish potential motivated sellers. Remember that you are looking for properties that can be brought under contract at under market value. There are MLS properties than can be purchased for substantial discounts, but you must learn to understand why individual owners might be extremely motivated to sell. One caveat, all of these properties are visible to everyone, which makes it more difficult to negotiate the best deals.

Don’t be discouraged if you don’t find the ideal property listed on MLS. There are lots of other ways to find and locate the distressed properties. You can start by actually driving around and looking at properties in your locality. If there are vacant houses, homes with untended yards, and properties in need of repair, these are potential wholesale properties. This market familiarization process is all part of learning about your local real estate market.

For Sale by Owner properties are also wholesale opportunities. These sellers may be willing to discount the property in order not to pay a real estate commission. Real Estate auctions are also possibilities, but you will need to secure cash in advance as almost all auctions require immediate cash payments.

Finally, you will need to take a pro-active role in finding motivated sellers. You may begin by placing signs (bandit signs), distributing flyers or using direct mail to advertise that you buy houses for cash. Part of the wholesaling strategy is to secure the property by contract and then to assign this contract to a cash buyer who will act immediately in order to purchase at below market value.

SEE ARTICLE: Building Your Credibility as a Wholesaler

It is highly recommended that you get as much education and training on wholesaling as possible. Make sure that your training is provided by reputable and experienced trainers.

 

Reason #2 – Eliminates Need for Credit and Large Personal Capital Investment

Every seller will require that the property is paid for. Motivated sellers will still need a buyer that can solve their problem with cash or financing. We can’t ignore the fact that cash will be required to purchase the property. However, you won’t need a large amount of cash to put the property under contract. Rather, you will need an earnest money deposit. The actual cash to close the sale will come from your “buyer.” This “buyer” will be the one who will actually complete the closing. You, as the wholesaler, will provide the earnest money deposit.

In addition to the fact that you won’t need a large capital investment in order to complete your end of the transaction, you won’t need to rely on your credit to secure financing. Your “buyer” will complete the transaction WITHOUT USING YOUR CREDIT.

Be aware that you must ensure that your contract to purchase the property must be assignable. Generally, all contracts can be assigned unless specified otherwise. However, you should explicitly state that your contract is assignable. Be upfront with the seller and let the seller know that you may be using a partner or other investor as part of the purchase agreement. Rather than hide the fact that you may have a partner or other investor, let the seller know that you may not be the person who actually takes title. It’s important that the seller understands that the property is being sold, not that you may not be the final name on the deed.

Greed will kill a great deal. You must allow for the seller to solve their problems, allow the “buyer” to make a profit, and earn a profit yourself. A part of something is much better than a lot of nothing. This simply means that you need to find sellers who are motivated to sell at below market value for any number of reasons, and then find a “buyer” who will step in and close the deal in order to make a profit. When you receive your wholesale training from a trained expert, pay special attention to establishing values.

Before we go further, you must learn to construct good deals that allow for realistic profits. Buyers from your buyers list will not act unless they firmly believe that they will be able to earn a profit. They need to rely upon actual numbers as to what the property will be worth after repairs and renovation, and they must have a reliable estimate as to what those repairs will cost. If you have actual numbers, you will be in a position to make a deal that works for you, the “buyer”, and the seller.

How do you find buyers who will step in and provide the cash to close the deal? You must develop a good organized buyers list. These are people who have the cash or credit to immediately act on a good deal. Great training from qualified experts can provide valuable resources. You can start with advertising for buyers with a website or craigslist. You will need to develop a professional plan. Many wholesalers join real estate investment clubs and network with other real estate entrepreneurs as a way of meeting “buyers”. Don’t forget about friends and family as potential “buyers.”

 

Reason #3 – Teaches Negotiation Techniques

Wholesaling is a person-to-person business and you will need to learn proven negotiation tactics and techniques. The more training you can receive on dealing with negotiation, the better your success will be in real estate wholesaling. In every real estate negotiation, the seller wants one thing and the buyer wants something else. Your goal as a negotiator is to find the common ground that will structure a great deal.

SEE ARTICLE: The 6 Key Elements for a Successful Real Estate Purchase Negotiation

Each time you meet with a seller or property owner you are in the process of learning how to negotiate. Everything starts with learning why the seller is selling, or if the property is not actually for sale yet, why would the owner consider selling. Is the property in foreclosure or does the seller have some immediate cash requirement? There may be any number of reasons why the property is available, but you need to know the most important ones. The more you know, the more money you might make.

As you gain experience talking to sellers, to “buyers”, and to other investors, you will gain confidence – both in what to say and what not to say. It’s important to allow all parties in a real estate negotiation to come out ahead. The moment you become to self-centered or greedy, the deal will vanish. J. Paul Getty once said, “You must never try to make all the money that’s in a deal. Let the other fellow make some money too, because if you have a reputation for always making all the money, you won’t have many deals.” As you learn to follow this advice, your personal confidence will naturally improve.

The negotiation process is all part of understanding why the seller is selling. Once you know what the seller’s true objectives are – the sooner you can find a way to solve them. As you learn to become a problem solver, you will quickly become a better negotiator.

 

Reason #4 – Entrepreneur Can Build a Powerful Success Team

Every successful real estate wholesaler learns that success comes with having a powerful support team. This team may help in determining renovation costs, establishing true market values, providing legal advice, structuring proper and successful closings, and building a list of “buyers.” You may want to do all of this yourself, but it just won’t work. You will need the help of others, and wholesaling will help you build a powerful support and success team.

A success team will communicate with each other and provide accurate information. Each member of your team will support and contribute towards an eventual success. Because every deal relies heavily on establishing a final market value of the property, you will want to find an appraiser who is credible and experienced. The appraiser can assist you in not only establishing a present value, but an after-repair value as well.

It’s critical to be upfront with the title company when completing any wholesale transaction. You will need to work with a title company that understands what you are doing, how you are structuring the deal, and how the assignment of contract (or double closing) will work. The title officer must know what to say when setting up the closing and working with all the parties – seller, “buyer”, and yourself.

You will also need to work with contractors and cleaners. You may not actually do the contracting work, but you must know actual costs to finish the work. In most cases, you may need to do some cleaning and initial work to present the deal to your buyer. Actual realistic estimates and bids will help tremendously in your negotiations with your “buyer.”

Finally, you will need to establish a great buyers list. This will be your stable of money people who will be anxious to step in and make a profit from your work in structuring the deal. If you learn to structure win/win deals where both you and the “buyer” make money, you can soon have a list of people waiting to work deals with you.

 

Reason #5 – Can Reduce Risks

It’s already been established that we don’t have to have a large cash investment in order to effectively do real estate wholesaling. When you eliminate the need for a substantial cash investment, you automatically reduce your risk of personal financial problems. When you have to generate a huge cash investment, you oftentimes borrow excessively or create other financial problems. Wholesaling can eliminate this problem and risk.

Another risk we eliminate by wholesaling is the risk of damaging your credit. Your credit rating is valuable and every time you take on additional debt by borrowing, you are raising your risk. A major benefit of wholesaling is the ability to structure a deal without borrowing money.

If you were to rehab the property yourself, you are susceptible to the risk associated with cost overruns and excess expenses. Because you have assigned the contract to another party (the buyer), this risk is also eliminated.

 

Reason #6 – Can Create an Immediate Positive Cash Flow

We all want a positive cash flow, and most of us want that cash flow to start immediately. When you learn to wholesale real estate and have an organized list of buyers ready to step in and complete a win/win deal, cash flow can start right away. You are assigning the right and obligation to purchase the property, and this automatically allows you to make a profit when the assignment takes place.

The property owner or seller also can benefit from a quick closing of the property itself, which generally solves the problem the seller had with the property.

Real Estate wholesaling is a proven strategy that can benefit the seller by providing immediate cash for the property from the “buyer.” It is also a great way to make a profit when you structure a win/win deal. There are motivated sellers with distressed properties who actually need your help, there are “buyers” looking to make a profit, and you can succeed by structuring great deals. The best way to make all this happen is to find a credible and qualified mentor or trainer who will guide you step-by-step in making real estate wholesaling a viable strategy.

Workshop Update | Week 37 – Sep12–Sep 15

This week, Response delivered 15 Real Estate and Stock workshops. Our overall customer experience score, for all surveys received, was a 5 out of 5. We saw over 924 students. Here is what some students shared about their experience:

“So glad I came across this!” —Isaac H.

“I’ve learned more about money than I ever thought possible!” —Jeremy P.

“I’m really grateful for the information!”—Cecilia V.

Creative Ways of Financing Your Business Project

Getting a business off the ground costs approximately $2,000 up to $5,000 for home franchises and $3,000 for micro-businesses, according to Business News Daily. True to the words of Sol Luckman, “It takes money to make money.” The sad reality is that despite having brilliant billion-dollar business ideas and all the data in your favor, sourcing finance to start or finish projects can be quite taxing, especially for emerging entrepreneurs with little-to-no credibility. For this reason, budding entrepreneurs should take a minute to understand the changes in business funding over the last decade and come up with creative ways of securing the money bags for their business projects.

Social Media Marketing

In a world where people look to social media platforms like Facebook, Instagram, Snapchat, and Twitter for advice on how to eat, drink, live, dress and act, social media marketing can be instrumental in securing funding for business projects. How so? Well, for starters, marketing on social media platforms enable you to reach investors from the large pool of 2.77 billion Internet users in the world. Advancing your business via social media can also be done through influencer marketing. This is where you pay or partner with an influencer who has a huge following to post about your products or services and why people should invest in or buy them.

Going live and posting videos on your social media feeds is another way to help secure funding. Doing so creates awareness about your project, grows a fan base and promotes brand loyalty thanks to the fact that visual content is shared 40 times more than written or audio content. This fan base could help support you financially. Additionally, once investors see a huge number of people like and reshare your content, they will be more than eager to finance your project.

Participating In Saving Challenges

Saving is one of the best ways to create a fund pool for starting, expanding or finishing any business project. This is because it comes with zero baggage, seizure threats or debt.  Participating in any of the many saving challenges on the Internet is a fast, guaranteed way to source finances for your business idea over a defined period of time, say 52 weeks. These challenges state the time duration and the amount of money you will raise over the stated time. It is then up to you to find ways to source the money to deposit weekly, biweekly or monthly depending on the challenge. This could be through formal employment, side hustles or hiring out one’s talents and skills.

Approaching Angel Investors

Getting access to a good investor in this Internet age has become simpler. Getting them to invest in your project, therein lies the rub, as they are bombarded with constant requests. Social proof, a well-planned out business strategy, and specific objectives on how you’ll get your project finished are things that will give you an edge over all other applicants. Additionally, you want to look for an angel investor in your field. Having an angel investor who has succeeded in the same field as yours means they are in a position to connect you with all the power players in the field from suppliers to manufacturers and authority contacts. They also have invaluable insights on what might or might not work and you will, therefore, have your work cut out for you.

Sometimes, traditional methods of sourcing funds like bank loans, peer-to-peer lending, venture capital, grants and crowdfunding fail. During such times, think of out-of-the-box ideas to generate the money needed to complete your project. Social media, angel investors and saving challenges are a great place to start.

 

7 Principles of Personal Ethics that Will Improve Your Real Estate Success

In the fast-moving world of real estate investing, it won’t take long for both old and new real estate entrepreneurs to quickly come face-to-face with personal dilemmas that may test their moral principles.  Upon closer examination, the answer to those questions about right and wrong may tend to seem more gray than just black and white.  How you, as an aspiring entrepreneur, act when business and investment decisions don’t appear to have a consistent answer will determine how successful your real estate career will become.

Every act, every decision, and every interaction you have with sellers, buyers, renters, investors and fellow entrepreneurs will affect your future real estate success.  Personal ethics are generally defined as the principles and values that govern interactions between individuals, while professional ethics are more accurately defined as the rules that govern behavior within a certain profession.  Because real estate success will ultimately depend upon the interaction between individuals within the realm of property ownership, management, and personal use, we will treat the comprehensive list of values and understood rules to all fall under the banner of personal ethics.

Your goal as a real estate entrepreneur is to achieve success that will provide both short and long-term benefits.  There are at least seven specific personal ethic principles that will impact and improve your real estate investment career.  Your business reputation will depend on how well you learn and then apply these principles.

 

Personal Ethic Principle #1 – Honesty

Honesty seems easy to define.  From an early age, we are taught to tell the truth and not to lie.  Unfortunately, as we grow older we seem to find it much more difficult to accurately explain and live the principle of honesty.  Let’s consider the example of selling a rental property that has old appliances that will probably need extensive repairs or even replacement in the immediate future.  Do you ignore that future possibility or just rely on the fact that the appliances are working pretty well right now?

It’s important to realize that you will continue to own, sell, and lease properties in the local area for quite a long time.  If you omit or fail to disclose information about a property you are selling, that fact will become local knowledge and your reputation will be damaged in countless ways.  People talk and they love to express their displeasure when they feel they have been wronged.

You should attempt to be completely honest in all your business dealings, and that is doubly important when buying, selling, or leasing real estate.  Being truthful in all your business dealings implies that you won’t knowingly mislead, omit or deceive another party.  When you are honest in your real estate dealings with another individual, you will gain new friends and establish a reputation that signifies that you can be trusted completely.  You will find that people will come to you with deals because they know that you are Honest!

 

Personal Ethic Principle #2 – Integrity

A person of integrity is believed to be an individual who has high moral values and who will not sacrifice personal principles for some kind of monetary reward.  As a real estate investor, you will always want to be identified as a person of integrity.  You will do what is right even when there may be pressure of some kind to do otherwise.

Perhaps you have decided to fix up a property and flip it for a substantial profit.  First of all, there is nothing wrong in doing this.  When you purchase a property that needs repairs to bring it up to its true potential, and then you use your money, labor and efforts to accomplish the work, you are adding value to the property.  When you sell the property for a profit, you are being compensated for that added value.

Now is when your true integrity will be demonstrated.  Are you going to truly add value to the property, or are you only going to do repairs that are superficial and won’t last?  Hopefully, you will do the fix up work on the property that brings added value.

There may be times when immediate profits without adding value through work, knowledge, and effort is tempting.  Don’t be sucked in to the belief that “no one will know.”  Doing what is right when circumstances and pressure to do otherwise will demonstrate how converted you are to showing integrity in your business decisions.

 

Personal Ethic Principle #3 – Trustworthiness

People will often describe another individual by saying, “He is a man of his word.”  In other words, they believe that the individual can be trusted to follow through on whatever he says he will do.  Real estate is a strange business in that there are often agreements that are made verbally or through written contract.  It is important for both parties to know that when agreements are made, they will be honored.

If you are going to purchase a property, you will certainly want to believe that all agreements you make with the seller will be honored, and this is even more important when you become the seller of a property. Both parties to every transaction must have confidence that the other party can be trusted to follow through.

But true trustworthiness in real estate is much more.  It’s a demonstration that all relevant information will be disclosed.  As a buyer, you are relying on candid information about the property, and when you are the seller, you are relying on honest and truthful representation as to the ability of the buyer to purchase the property.  If you subsequently find that you have provided information that is inaccurate, you need to alert the other party as to the error.  Failure to do so will result in loss of trust, and when trust is lost, the transaction will fall apart.

Successful real estate entrepreneurs have found that long-term success is largely dependent on establishing trusting relationships.  These personal associations will provide a contact list of ongoing buyers and sellers that will provide long-term income and success.  One way to ensure that these relationships mature into profitable ones is to demonstrate trustworthiness from day one.

 

Personal Ethic Principle #4 – Loyalty

Loyalty is defined as a strong feeling of support or allegiance.  As a real estate investor or entrepreneur, you will be engaged in numerous situations where the other party is dependent upon you.  They will depend upon you following through, but there is much more.  Your ability to guard and maintain information in a secure manner is crucial to your success.  Take the example of renting out a property and receiving a credit report for the new potential client.  That information is certainly private and you must not reveal it to others.

In addition to guarding private financial information, you need to demonstrate loyalty as you follow through on your commitments to others.  If you say you are going to be at a property showing or open house of the seller, you need to be there.  Missing a pre-arranged meeting will demonstrate a true lack of loyalty.

Another way to ensure that you show loyalty to other individuals in your real estate transactions is to avoid conflicts of interest.  If you find yourself questioning whether there is a conflict of interest, point it out to the other party and you will be safe.  Once the information is available to everyone, it’s easy to work out a solution.

Loyalty in real estate can also be described as faithfulness to commitments.  People will trust in what you say and what you do.  Their trust in you will increase when they understand and have confidence that your word is your bond.

 

Personal Ethic Principle #5 – Fairness

It’s very likely that people will ask, “How fair is he?”  They may be potential renters asking existing tenants, or sellers who are interested in some kind of joint venture.  It doesn’t matter the exact situation, people must believe that you are fair or impartial in your business dealings.  If your reputation is one that defines you as fair, you are well on your way to developing a long list of potential business contacts.

If you are interested in fixing up properties as part of your real estate investment program, you will quickly find that you need to involve contractors and other business people.  Regardless of the type of economic real estate market we experience, these individuals will only do business with individuals like yourself if they have the belief that you are always going to be fair with them.

Additionally, you will want to make sure that when you discover you’ve made a mistake of some kind, that you correct the error and make amends.  If you discover that you’ve unknowingly given false information that led to a mistake, you must make the other party whole.  Fairness is something that contributes to either a positive or negative reputation, and long-term, you are dependent upon a strong positive reputation based on fairness in business dealings.

 

Personal Ethic Principle #6 – Concern for Others

The Golden Rule is defined as “do unto others as you would have them do unto you.”  In real estate this could be interpreted as having concern for others.  In simple terms, you want to ensure that you do win/win deals and transactions.  When both parties to a real estate business contract come out ahead, it is called a win/win deal.  Start by imagining that the other party is in reality your customer, and then put yourself in your customer’s place.

If you truly have concern for the other party, you will make sure that you help them understand the transaction.  You would never want to subtly hide information in a contract that would adversely affect the other person.  The more open you are in your real estate negotiations, the more success you will have.

People will trust you and want to do business with you if they know that you are concerned for their outcome.  One way to demonstrate this concern is to have the person like you for being fair and honest.  Your body language is important in establishing this feeling of mutual trust where your concern for them is evident.

SEE ARTICLE: (Link to article written by Gary Cochran “4 Factors Every New Real Estate Entrepreneur Must Understand About Positive Body Language”)

 

Personal Ethic Principle #7 – Personal Accountability

Personal accountability is the belief that you are fully responsible for your own actions and consequences.  In real estate investing, this means that you will take full responsibility for the outcome of your transactions.  If you somehow create a hardship of some kind for the other party, you will make it good.  You will always assume that there are two sides to any disagreement and then be open minded about solving any potential problem.

Real estate entrepreneurs across the globe have found that their performance and success increase when they assume responsibility and don’t blame others for mistakes and small setbacks.  There is little doubt that real estate investing sometimes comes with short-term disappointments.  When they occur, evaluate the reasons and examine how you can improve your business.

Warren Buffett is reported to have said, “It takes 20 years to build a reputation and 5 minutes to ruin it.  If you think about it, you’ll do things differently.”  A solid business future can await you as a real estate entrepreneur when you learn that making money is a by-product of leading a moral and ethical life.  Focus on the principles of personal ethics and everything else will fall into place.

Workshop Update | Week 36 – Sep5–Sep 8

This week, Response delivered 14 Real Estate and Stock workshops. Our overall customer experience score, for all surveys received, was a 5 out of 5. We saw over 753 students. Here is what some students shared about their experience:

“Best workshop ever!” —Kurt B.

“Training was valuable!” —David K.

“Very good training!”—Kojo G.

Workshop Update | Week 35 – Aug 29–Sep 1

This week, Response delivered 14 Real Estate and Stock workshops. Our overall customer experience score, for all surveys received, was a 5 out of 5. We saw over 753 students. Here is what some students shared about their experience:

“Very motivating!” —David H.

“An awesome workshop!” —James H.

“It has been a life-changing experience so far!”—Jenn H.

Workshop Update | Week 34 – Aug 22–Aug 25

This week, Response delivered 14 Real Estate and Stock workshops. Our overall customer experience score, for all surveys received, was a 5 out of 5. We saw over 816 students. Here is what some students shared about their experience:

“I appreciated the staff’s friendly, courteous, and smart service to me.” —David D.

“Enjoyed the workshop. Lots of good information!” —Marie O.

“Very informative!”—Justin O.

Response Participates in Building a Home with Habitat for Humanity

 

Come rain or shine, on July 31, 2019, the Habitat for Humanity service project was a fantastic experience! Response volunteers were met by a Habitat for Humanity project coordinator, who shared how the charity works and who also shared the story of the family that will be moving into the home when it is completed. Licensed contractors provided hands-on instruction of the skills to be used on the project, and despite the rain, everyone diligently worked to fulfill their tasks. At the end of the day, many of the volunteers remained passed their time commitments to put away tools and clean up the site.

The 6 Key Elements for a Successful Real Estate Purchase Negotiation

Understanding how to conduct a successful real estate negotiation can be the difference in finding and securing great properties.  Every real estate transaction involves negotiation between the seller of the property and the buyer.  As a new real estate investor, you want to secure the property at a price that builds in both short and long-term profits.  These are your objectives.  The seller, on the other hand, has different expectations.  He undoubtedly expects to sell his property for the highest price possible.  A great negotiator has the skills to bring the objectives of the buyer and the expectations of the seller into balance.  When this happens, you have a true win/win proposition.

Is it possible to always match the objectives and expectations?  The answer is no, and the landscape is littered with the carcasses of failed real estate failed negotiations.  You don’t want to be one of them.  Your goal should be to learn simple ways to negotiate a better deal while still meeting the major expectations of the seller.

Once you have identified a potential property, how do you proceed?  Let’s compare the negotiation process to a campaign to win a war and reach a peaceful agreement, because in essence, that is what we are doing.  There are six key elements for a real estate purchase negotiation campaign.

 

Key Element #1 – Define Your Objectives

Everything starts with your overall objective in purchasing the selected property.  Why did you select this specific property?  What specific strategy had you selected to further your investment goals.  Perhaps you based your purchase on rental properties and this property seemed to meet the requirements of a good rental property.  Maybe you identified the property as a good property for doing some fix up repairs and reselling the property, or possibly you thought the property was a potential long-term property for a buy and hold strategy.  Regardless of the reason you identified the property as ideal, you now need to define the price and terms you would offer for the property.  In order to do this, you will need to know a lot more about the property, the seller, and the market in general.

Let’s assume that you are following a proven investment strategy and that you have set some preliminary objectives as to the initial price you would like to offer, along with certain basic terms, conditions and timetables.   Once you have done this, you are ready to implement the next key element of the negotiation campaign.

 

Key Element #2 – Prepare Your Attack

Preparation in war is essential for victory and the same is true when preparing to negotiate a purchase agreement with the seller.  The initial agreement is called An Earnest Money Offer to Purchase and will be the basis for all further negotiations.  Nothing should ever be left to a verbal understanding.  If nothing is written, nothing is agreed to.  When preparing your attack, you are actually looking ahead to the purchase of the property.

  1. Prepare Your Team. The first thing you are going to do is to prepare your real estate purchase team. If you are going to be successful, you will need to add additional members to your team.  Besides yourself, you need to understand the role of the buyer’s agent.  A good buyer’s agent will represent you in the purchase process.  The buyer’s agent is NOT the listing agent.  The listing agent of the property is the seller’s agent, and as such, will represent the seller in order to get the highest price possible for the property.  This is the fiduciary responsibility of the listing agent, but it is not necessarily in your best interest.  The buyer’s agent will be the individual who will actually present the earnest money offer to the seller or the seller’s listing broker.

SEE ARTICLE: 5 Key Factors that Will Help You Understand the Importance of a Buyer’s Agent

As you prepare for the attack, you will also need to identify other potential professionals besides your buyer’s agent.  You may need a real estate inspection, an engineering survey, or construction help to remodel or fix up the property.  If such is the case, prepare by finding individuals who can complete these tasks.  It’s also possible that you will want to verify zoning or legal issues and may need to contact the proper city official.

  1. Complete Investigation of Property and Seller. Your investigation is much more than a simple viewing of the property.  You must decide if the property will meet your major investment objective once the property is purchased.  In addition to meeting the overall objective, you must determine if there are problems of any kind that could hinder your investment objective.  These problems could be related to the property or they might be related to legal or zoning issues.

Perhaps even more important than the property itself is information concerning the seller and his or her reasons for selling the property.  This information can be ascertained by finding out the answers to the following questions:

  • Why is the property for sale?
  • How long has the property been listed for sale?
  • Are there any other offers on the property?
  • What are the encumbrances and mortgages outstanding on the property?
  • Are all payments current and being made on time?
  • How anxious is the seller?

The answers to these questions may be gathered by having your agent check multiple listing service records and by meeting with the listing agent.  The more information you have on both the property and the seller, the better prepared you will be when drafting your offer to purchase.

  1. View the Property. Every time you view the property, you should be with your agent.  There are some caveats that you should keep in mind when inspecting and viewing the subject property.
    • Act Interested but Not Overwhelmed. It is important that the seller or the seller’s agent understand that you are a credible buyer.  What you don’t want to do is to alert the seller that you think the property is a “must have” property.  If you do this, your ability to negotiate is diminished.
    • Measure and Pace Off Distances. Bring a tape measure with you when you look at the property and measure distance and walls.  It shows that you are serious.
    • Keep Body Language in Check. Your body language can alert the seller to you being over anxious.  Even though you think the property is ideal, don’t say it aloud or advertise the feeling through body language.
    • Ask Good Questions. In most cases, you may already have the answers through your prior investigation, but go ahead and ask questions that show you are serious.  There are 5 specific areas that you should address:
    • Take the time to find out how old the appliances are and what repairs have been needed.  Appliances are often an expense that needs to be taken care of immediately after purchase.
    • Recent Repairs. If there have been repairs made to the property, you need to make sure that they are identified.  This also goes for any repairs that need to be done before closing.
    • City Ordinances. Are there legal restrictions that will inhibit or stop you from using the property for your investment strategy?
    • Not only do you need to know what the mortgages are, but you must know if the property is facing foreclosure proceedings of any kind.
    • REASON FOR SELLING. You need to know if the seller needs all the money for a specific purpose, along with the timing requirements for closing.
  1. Draft the Initial Offer to Purchase. This is your first offer and may not be your last offer.  When drafting this offer, make sure that your agent understands what you are trying to accomplish.  Even though you may be willing to pay more and offer better terms, it is better to keep this information to yourself.  Before you tell your agent everything, make sure that you have chosen the best buyer’s agent possible.
    • Price. The price you put on your first earnest money offer is not usually the highest price you will be willing to pay.  You should have investigated what similar properties have sold for and offer a competitive, but lower price.  Unless there are other offers on the property, it is usually best to offer something less than the full price.
    • Terms. The terms of purchase can be even more important than the price.  If the seller is willing to carry the financing of the property, terms are extremely important. The following items should be addressed within the offer to purchase:
    • Who is going to pay for the appraisal? Once the appraisal is completed, what recourse do you have if the appraisal is too low?
    • Inspection of Property. When will this be done and what outstanding issues should be initially addressed in the offer to purchase?
    • Furniture and Personal Property. If you see something on the premises, make sure that you address it specifically in the offer.  Don’t assume something is staying unless it is documented in the offer.
    • Possession and Closing Dates. If you want possession at some date prior to closing for doing repairs or some other purpose, you need to spell it out in writing.  Make sure the closing date is reasonable.  Don’t include the phrase or clause “time is of the essence”, as this is detrimental to you the buyer.
    • Subject to Clauses. If your purchase is subject to a zoning change or approval, put it in the document.  If you are waiting for financing approval, make the purchase “subject to financing.”  These “subject to clauses” are your exit strategy during your due diligence period.
    • Earnest Money Deposit. The actual deposit should show your interest and ability to close.  Make it a reasonable amount and subject to closing.

 

Key Element #3 – Make the First Move

The ball is now in your court and you are responsible for making the first move.  That move consists of actually making the offer and presenting it to the seller or the listing agent.  It is important that you understand who the other players are and what they are going to do.  You, as the buyer, should not present the offer.  It should be presented by your agent.  Your agent is really like the general on your team.  He or she is going to lead the attack by presenting the offer.  There is a great deal of power inherent in third party negotiating.  When your agent (the general) presents the offer, you eliminate the problems of becoming personally affronted if the offer is rejected in part or in whole.

The seller has different expectations than your objectives.  When the seller receives the offer from your agent, he or she is going to evaluate if the offer is something that can be accepted in whole or in part.  You need to know if you are dealing with one seller or if there are multiple people or entities who are listed on the deed to the property.  You also need to know what timing requirements must be met.  All of this information should have been gathered during the attack phase of the campaign.

When your agent presents the offer, he or she will only present what is written on the offer.  You don’t want your agent to express anything that is not written.  In no case should your agent let the seller know exactly what you will do and what you will pay.  He or she may express the point that something may be possible, but only when you have said that he could do so.  When you selected your agent, you should have chosen a professional person in attire and dress.  The more credible your agent appears, the more credibility you will have.

 

Key Element #4 – Move Out of the Way

Now it’s time to let the negotiation process get going in full steam.  Your role should now be to step back and let your agent do the negotiating.  The value in this is that there is nothing personal and your agent will keep it from being so.  Some buyers have wanted to go with the agent to present the offer.  This is a mistake.  As long as you allow the buyer’s agent to present the offer, you can evaluate and analyze any counter offer.  If you are with the agent, you may be put in the position of making a decision without the time to decide if the decision is in your best interest.

It’s wise to give your agent as much information as you can to show that you are a credible buyer.  If you have a pre-approval for financing, let your agent have the information.  Another thing you can do to build credibility is to allow your agent to give specific personal information about yourself.

 

Key Element #5 – Manage the Battle

Even though your agent is now acting as general and presenting the offer, you are still in charge of the battle and the negotiation campaign.  Any decision as to the actual offer and subsequent counter offer must come from you, the buyer.  When a counter offer is drafted, the seller is now actually writing a new offer to sell you the property according to the new terms in the counter offer.  In general terms, the underlying earnest money to purchase agreement will be altered and subject to the new terms and price in the counter offer.  When you receive the counter offer, you can accept it as written or you can make a new counter offer.  This process goes on until the buyer and seller agree to the final terms of purchase.

This process is totally in your hands.  Be careful that you don’t start negotiating with yourself.  Don’t be drawn into the situation when there are a number of different counter offers and you become confused and offer something you didn’t mean to do.  If this becomes the case, it is better to draft a whole new document and start over.

Once the counter offer battle is underway, it is important that you establish a point when you are willing to just walk away.  Never feel like you are being forced into a purchase.  On the other hand, never become so emotionally attached to a property that you feel you absolutely have to have the property, regardless of the price and terms.

 

Key Element #6 – Sign the Peace Agreement

In reality, the final agreement will be a peace agreement because you have reached the point when the buyer and seller have balanced objectives and expectations.  Once both parties reach a final agreement, the signed document will be used to draft the closing documents as all underlying “subject to clauses” are eliminated.

As you can see, the negotiation process doesn’t mean that there is a winner and a loser.  When negotiations are done properly and professionally, we end up with a true win/win situation.  Proper planning is the key to a prosperous future, and it is key to success when negotiating for the purchase of any real estate property, and if it is done correctly the expectations and objectives of both parties are balanced.  When you understand the six key elements of a good real estate negotiation, you will be well on your way to wise and successful real estate purchase.

Procrastination – The Roadblock to Unlimited Success

Most people set goals. The sad fact is that many of these goals are never achieved. Perhaps you have imagined yourself achieving success in a new venture, and as time passed, the dreams in your mind faded into sad “it could’ve happened fantasies.”  As the Director of Real Estate Education at Response, I have listened to a few of these gloomy stories. Recently I pulled up my journal and asked myself what went wrong in those stories. What happened that turned opportunity into unfulfilled dreams?  As I reviewed a few of these stories, I found a common ingredient in all of these sad experiences – the ability to control personal time.

Our ability to manage our time will  determine how successful we will be in any venture—especially  in the field of real estate investing.  The word procrastination comes from the Latin word “pro” meaning “in favor of” and “cras” meaning tomorrow.  It means delaying or putting things off.

Many successful entrepreneurs have experienced episodes have procrastinated, but have still gone on to achieve  great success.  The difference is that these people learned how to overcome procrastination by managing their time and their actions.  Eric Schmidt is an example of someone who manages time well in order to achieve success.  He is an American businessman and software engineer who was the Executive Chairman of Google from 2001 to 2017 and Alphabet Inc. from 2015 to 2017.  He said, “If you ask me to do something, I’ll do it immediately. It makes the world more efficient, and it makes me more efficient as an executive.”

When I travel outside my local community, I’m often surrounded by farms with green corn blowing in the wind.  As I drive through the fields I’m reminded of the saying, “You cannot plow a field by turning it over in your mind.”  If you want the crops to grow, you must make the time to act and actually plow the field.  Nothing happens if you leave your dreams in your mind.  This is why procrastination is known as the silent dream killer.

There is a way for you to overcome procrastination and achieve success in whatever venture you want, and especially in the field of real estate.  Let me offer five-steps for overcoming procrastination.

  • Step 1 – Recognize when you are procrastinating. If you are actively educating yourself in the field of real estate, it’s safe to say you’re not lazy.  However, you may be delaying taking specific action based on your education.  In this case you are probably choosing to do something else instead of doing the specific action necessary to accomplish your goal.  Perhaps you are ready to place an offer on a property, but always find a reason to delay making the offer.  Be honest with yourself and recognize your behavior for what it is.
  • Step 2 – Determine the reason you are procrastinating. There may be a valid reason for the delay in action that you need to evaluate.  Going back to the offer to purchase mentioned earlier, if the owner is unavailable, that is a valid excuse.  But, if you aren’t making the offer because you think that he might not be receptive because it’s late in the afternoon, you are procrastinating.  Eliminate non-valid excuses.
  • Step 3 – Eliminate negativity from your vocabulary and mindset. Procrastination is a negative form of delay that is related to anxiety, depression, and distress.  If you find yourself procrastinating a lot, try to eliminate any underlying causes.  In the field of real estate investing, you may feel anxiety in relation to a lack of education and training.  Remember that Response has a complete library of training, techniques, and resources available for your use.  Take advantage of the opportunities for real estate education at Response.
  • Step 4 – Commit to the task. Focus on the act of doing something.  Avoid delaying any actions necessary for completing the goal.  Try to differentiate the immediate task from the overall objective.  Work at breaking down large goals into micro tasks.  Imagine yourself as the farmer plowing the field.  Think of one completed row plowed instead of the whole field.  But, commit yourself to finishing first the task and then the objective – finish plowing the whole field.
  • Step 5 – Eliminate distractions. Distractions can take many shapes.  If you are influenced by friends or associates who don’t have confidence in your decisions, find new friends who will support you and your goals.  If you are distracted by social media and email, avoid these platforms.  Your goal in overcoming distractions is to eliminate them whenever and wherever you can.

Procrastination is a passive energy that can derail and completely destroy dreams and ambitions.  If you allow it to, it can keep you from completing both short-term tasks and long-term goals.  Remember that you have the ability to counter this threatening force by using the strategies above.  And when you do overcome your procrastination, you will eliminate a large roadblock to unlimited success.

Investment Opportunities in Vero Beach, Florida

Having just finished a two day one-on-one training in Vero Beach, Florida, I discovered some great investment opportunities.  These opportunities will present themselves in many areas across the United States and throughout the world.  The common factor being an explosive market in a high-end neighborhood.  Vero Beach is unique in that it is located near the Atlantic Ocean and sits between the ocean and inlet bays and canals which create the ability to have docks in one’s backyard with water access to the ocean.  There are many smaller older homes in the neighbor with exceptional potential to be torn down and rebuilt into new larger estate homes.  Many retail buyers with the necessary means are looking for a location on the water but do not want a tiny old home, nor do they want to be involved in a major remodel.  What they want is a brand new modernly built home of reasonable size with all the updated amenities on a property in the right location.  The opportunity for an investor is that the difference in price of a small outdated home and a new undated home is staggering; as much as $500,000 to a million more in price, making it very profitable to add a new roof or second story and upgrade all the finishes or even to demolish the existing home and build a new structure from the ground up.

The typical older home in the Vero Beach area costs between $400,000 to $800,000 depending on whether it is located on the water and a newly built home goes from $800,000 to 2 or 4 million depending on its size, location and view.  The building costs in the area are between 200 and 240 per square foot and the resale price can be as high as 650 per square foot, leaving plenty of room for buying the property, demolishing the house and building a new structure.  Here is an example of a typical project:

Purchase an existing older small home on a Bayfront property with dock for $650,000 to $800,000.  Demolish the home for $25,000 and rebuild a new 4500 square foot structure at $220 per square foot for $990,000.  Then resale the home for $2.9 million.

Price of home:                                                    $2,900,000.00

Land cost:                                                – $800,000.00

Cost to build home:                                   -$990,000.00

Demolition cost:                                        – $25,000.00

Realtor fee (5%):                                      – $145,000.00

Closing and holding cost (5%)                   – $145,000.00

Financing for construction loan:                  – $60,000.00

 

Profit:                                                        $735,000.00

 

The initial investment with be to buy the house with cash and pay buyers closing cost. The building can be financed with a construction loan, including the demolition cost.  Everything else with be paid from the proceeds of the sale of the property.

Return on Investment is the profit of:                 $735,000.00

Divided by the initial investment of:                   $840,000.00

NOI equals:                                                       88%

 

Not a bad return for a 10-12 month project.

Workshop Update | Week 33 – Aug 15–Aug 16

This week, Response delivered 12 Real Estate and Stock workshops. Our overall customer experience score, for all surveys received, was a 5 out of 5. We saw over 789 students. Here is what some students shared about their experience:

“My consultant Tiffany was amazing. I am so excited to move forward. Thank you to everyone!” —Bettina A.

“Very educational and pleased with the information given!” —Mario S.

“I am honored to have met my consultant, she was absolutely amazing!”—Monica P.

Workshop Update | Week 32 – Aug 5–Aug 9

This week, Response delivered 16 Real Estate and Stock workshops. Our overall customer experience score, for all surveys received, was a 5 out of 5. We saw over 1,030 students. Here is what some students shared about their experience:

“My consultant Tiffany was amazing. I am so excited to move forward. Thank you to everyone!” —Bettina A.

“Very educational and pleased with the information given!” —Mario S.

“I am honored to have met my consultant, she was absolutely amazing!”—Monica P.

8 Key Points Every Real Estate Entrepreneur Must Learn for Writing Killer Real Estate Ads

Eventually every real estate investor will be in the position of selling or renting real property.  At first glance, this process may seem simple and straight forward, and it really should be.  Unfortunately, far too many new, as well as seasoned, entrepreneurs forget the importance of learning how to write an advertisement that will produce immediate and positive results.  We call these highly effective ads – Killer Ads.

Regardless of whether you are selling your first property, renting your first unit, or looking for investors like yourself, you will eventually have to learn how to write ads that generate interest, prompt action, and create a sense of urgency.  Let’s look at 8 key points or principles of effective advertising that have been proven to work in real estate, time and time again.

 

Key Point #1 – Buyers Buy Benefits

There is a guiding rule you must learn and retain if you expect to have success in writing effective real estate ads.  This principle is true whether you are writing copy for a print ad, developing a podcast, or creating a video.  Buyers are the people to whom you are directing your ads, and these same individuals are prompted above all else to the benefits accruing to them.

This means that you should concentrate your ad to highlight and promote the benefits the person will receive if they respond to your ad.  We call this rule the BBB of advertising – Buyers Buy Benefits.  You can list all the features of any particular product, but unless the potential buyer can visualize specific benefits he or she will receive, you are wasting your time.  This does not mean that you should forget about the features of your specific property, but rather you should express those features in terms of benefits to the buyer.

Consider the example of an individual who is renting a three-bedroom house near a nice community park.  Don’t just state in your ad that there is a park nearby.  Instead, use terms that show how important this park might be to the prospective family with three young toddlers. You might state in your ad something like: “A beautiful green and quiet park with new and dependable equipment is only five short minutes from the unit which will allow you total peace of mind while your children are happily playing in a safe and protected area.”  Yes, this might take a few extra words, but the benefits are dramatic.  People don’t care about a park unless they can see that it will benefit them.

This same BBB rule applies to every ad or announcement you might make as a real estate entrepreneur.  When thinking of how to apply the BBB rule you should always put yourself in the place of the potential buyer, renter, or joint investor.  Ask yourself, “If you saw the ad, would you respond?”  If the answer is yes, then you probably have a decent ad.  Write the advertisement in a way that would appeal to you if you were the person listening to or viewing the ad.  The principle works when you advertise in a paper, develop a website, write a blog, or create a video.  Benefits sell!

 

Key Point #2 – Incorporate Action Words into Your Ad

Another way to describe Action Words is to consider them to be non-passive in nature.  The word “is” becomes a passive word.  When you write an effective ad, your goal is to get the listener, reader, or viewer to take a specific action.  Unless you begin by incorporating non-passive words in the ad itself, the final action is very likely not to take place.

Let’s examine a simple phrase and then consider how we might change it.  If you were once again going to place an ad to rent a nice three-bedroom house, you might be tempted to say something like, “Nice three-bedroom, two bath-home for rent in nice area.”  In fact, this might even be your headline for the ad.  It’s true that you have stated some information about the property, but you certainly haven’t prompted the reader to go much further.

How then, do you incorporate action words into the same ad?  Start by using words that connotate action.  You want the reader of the ad to see some action taking place.  You might say something like, “Open the massive front door and walk into a foyer leading to three tastefully decorated bedrooms.  After passing the door to the first large bathroom, you will be amazed at the size of the second sizeable open bathroom.”  You will notice that we used words like, “open,” “walk,” and “pass”.  These are only examples, but they illustrate how we now can visualize actually seeing and experiencing the three-bedroom, two-bath home.

Action words should be used throughout the copy of the entire ad, but they are critical when the reader first starts to read.  Later we’ll talk about the importance of action words in the headline of the ad.  Remember, that you want the reader, listener, or viewer to accept a call to action, and the best way for this to take place is for the reader to experience action in the ad itself.

 

Key Point #3 – Base Your Ad on Emotion

The second element of the copy of your ad is the emotional impact on the reader, listener, or viewer.  Love and hate are certainly words that create emotion.  But we constantly use other words relating to those same emotions.  Anger, fury and rage are all emotional words.  The same is true for words like adore and worship.  Whatever emotion you are attempting to create will give you words to use.

People have been proven to act faster when emotion is involved.  Chances are that your potential buyer or renter is just browsing and is not yet emotionally involved in making any kind of decision.  When this happens, you need to spur the reader, listener, or viewer to action.  An effective way to do this is to use emotional triggers – something that initiates action.  If your reader experiences an emotional reaction of some kind, they will continue reading or viewing your ad.  Common negative emotional triggers are fear, anger, and disgust, while positive emotional triggers are love, compassion, and empathy.

When you write your ad, you need to decide which emotional trigger you want the person to act upon.  Let’s go back to renting out your three-bedroom, two-bath home.  If you want to stand out and appeal to buyers who put a priority on family life and children, you would probably want to appeal to positive emotional triggers.

On the other hand, if you think security and safety are paramount in getting the right renters, then negative emotional triggers might work better.  Let’s imagine that you are advertising an apartment in an urban environment where recent headlines have been centered on neighborhood crime.  You might consider starting or including copy such as, “Leave your security concerns at the front door of our ultra-safe, state-of-the-art luxury two-bedroom apartment.  Moving quickly to the first 2nd floor bedroom, you will be thrilled when you see that the windows protected with high security steel frames…

The emotional words you select should be intertwined throughout your headline and copy of the ad itself.  The more emotion you elicit, the more effective your ad will become.

 

Key Point #4 – Use Easy-to-Understand Language

Your reader, listener, or viewer must be able to understand your ad.  They must not spend time admiring your prose or trying to interpret what you are saying.  The ad must elicit a positive call to action, and this will not be possible if the person is either spending time trying to understand what you are saying or admiring the words you use.

The best way to approach this is to consider how you would talk to your best friend or spouse.  You wouldn’t talk down or be condescending to the other person, and you certainly don’t want to do that when writing an ad.  Be careful to adjust your language and wording to appeal to your potential buyer or recipient of the ad itself.  If you are selling a fix-up property that can potentially be repaired by the buyer, then you want to use words that are commonly understood by such individuals.  The ad might use words that are frequently used by contractors or individuals who buy such properties.  Flowery words probably wouldn’t work in this circumstance.

People read and scan ads quickly.  You will want to grab their attention and keep it centered on what you are saying.  You already know that you will use action and emotional words, but you will also want to use words that aren’t overly long or complicated.  The military uses the acronym “KISS”, which means Keep It Simple Stupid.  The same thing can be applied to writing ads that work.  Simple is better because it is easy to understand.

 

Key Point #5 – Identify a Problem and Then Solve It

Once again, you must understand that you are writing an ad to solve a problem, and that problem should not be to sell or rent your property.  Instead, the problem that must be solved is the problem of your reader, listener, or viewer.  Let’s go back to our example of renting a three-bedroom apartment.  Yes, you have a problem of obtaining a great renter, but that problem is immaterial.  The real problem is that there is a family out there that is looking for a three-bedroom, two-bath home and they haven’t found it yet.  You must put yourself in the position of this family who is searching for your rental.  They don’t know it yet, but that is really the problem.

After you identify the true problem, writing the copy is much easier.  Everything you write, say, or do should be based on presenting the solution to the problem.  If you were the potential renter, what would you be looking for in a property?  Would it be storage, access to schools, large and spacious rooms, or a great neighborhood?

As you create the ad, spend time assessing your property to see how it might provide the solution to problems.  Then when you actually write the ad, present the solutions to the problem in terms of benefits for the new renter.  This same principle of finding solutions for the eventual reader, listener, or viewer is true regardless of the type of ad that you are drafting.  People tend to make decisions based on personal needs, and those needs are based solutions to existing problems.  Once you identify the reason someone needs your property, you are half-way to the finish line of a true “killer ad.”

 

Key Point #6 – Develop a Headline that Includes Action Words and Emotion

The first thing the reader, listener, or viewer will see is the headline to your ad.  Unless the headline does its job, nothing else will probably happen.  An ineffective headline will almost always ensure that nothing else takes place.  The headline must accomplish three main things – Grab their interest, create a need to learn more, and offer a potential solution to that already existing problem.

Emotion and action words should be part of every headline.  If you are creating an ad posted online, the words in your headline are critical.  We call these words – Key Words.  The search engines online use them to feed your ads to viewers online.  Key words are not just unique to the digital and online world.  People pick out key words in print and all advertising, and this being the case, we need to use words that relate to the solution to the problem.

Because the headline is so important, you should choose a headline for your ad that is from 6 to 12 words in length.  This works online as well as in print and visual media.  Two or three words are not enough to set up the purpose of the ad.  Once again, we want to make the headline strong and emotional.  Another purpose of the headline is to present a possible solution to a problem.

The headline is designed to be the first thing the reader, listener, or viewer sees.  When writing real estate ads, your headline must set up a potential call to action.  Everything you are doing when crafting an ad is based upon a final call to action.  You want the reader, listener, or viewer to do a specific item.  If you are selling a property, your ad should probably be to get the person to come and visit and view the property.  Yes, you want to sell the property, but the immediate action you want to take place is seeing the property.  Make sure your headline keeps the person’s interest and leads to your immediate objective.

 

Key Point #7 – Build Your Copy on Fact Not Fiction

Ads vary in size and length, but strong copy is essential in all advertising.  Many new entrepreneurs are tempted to exaggerate the benefits of their property.  It’s great to emphasize the benefits of your particular property, but it’s still essential to create credibility as part of your ad.

Let’s go back to our example of renting out a three-bedroom home.  If our specific property had an unfinished basement with framed in rooms that eventually could be used as bedrooms, you wouldn’t want to say that it had additional bedrooms.  Instead, you might say that the basement is unfinished but is framed in.  It could be used for storage which might provide more space in the existing bedrooms.  If the person who sees your ad, comes to view the property and sees that you have mislead them, then your credibility is destroyed.  When this happens, the chances are good that nothing else will take place with your potential renter or buyer.

Tell the truth and just emphasize the good points.  Don’t forget to write copy with emotion and action words.  The important part of all the copy is to get to the call to action.

 

Key Point #8 – Make the Call to Action

We must make a call to action.  We want the viewer to do something.  If all the viewer does is glance at the ad, you haven’t done your job.  If the viewer reads the headline and then reads the whole ad and moves on, you haven’t done your job.  What you want the viewer to do is to take some kind of action when they finish viewing the ad.

A call to action should contain action verbs and directly ask your reader, listener, or viewer to do a specific thing.  You may want them to act immediately and call you on the phone.  Perhaps you want them to attend an open house.  Regardless of the specific reason you wrote the ad, now is the time when you want the person to take action.

There are several ways to set up the call to action.  Urgency is always a factor to include in your copy that sets up the call to action.  It might be created in the copy of the ad or in the call to action itself.  Let’s consider our rental of a three-bedroom house.  Maybe you might want to say something like, “Applications will be accepted on a first come, first reviewed basis.”  This would indicate that there is a large demand for the property and that urgency in acting is important.  This principle of limited availability works in all advertising.  When I was selling an 11 year-old washer and dryer I wanted to emphasize the point that there was only one.  I remember writing, the first person with cash takes the washer and dryer.  It worked and it worked well.

The word “free” has been proven to be the most important word in advertising, and it certainly works with writing a call to action.  Once again, let’s use our example of renting our three-bedroom house.  How could we use “free” as part of our call to action?  Maybe you could offer a month free rent if the person moves in immediately.  Instead of saying those words, we might be better served by stating, “If you’re application is selected to rent the property, and you’re willing to mow the lawn twice a month, we will give you one free month’s rent and reduce your rent by $25 a month.”  The truth is that we had raised the rent already and could afford to reduce it.  Furthermore, the statement implies scarcity by having to be selected.  And finally, there is a reason for giving the month free – taking care of the lawn.  We haven’t destroyed our credibility but have created urgency and limited availability.

The call to action is the most important part of your ad.  Unless you get the person to actually do something, the ad is wasted.  Make sure you know exactly what you want your reader, listener, or viewer to do and then make a call to action that prompts the action to occur.

These 8 key points will help you create an ad that can work with virtually all advertising and especially in real estate.

Workshop Update | Week 31 – July 31–Aug 4

This week, Response delivered 17 Real Estate and Stock workshops. Our overall customer experience score, for all surveys received, was a 5 out of 5. We saw over 896 students. Here is what some students shared about their experience:

“I learned a lot!” —Thuy N.

“Excellent Speaker!” —Nedee S.

“This is awesome!”—Dave C.

Defining and Working with Proof of Funds (POF) and Verification of Deposit (VOD)

When investing in real estate the time will come when you are submitting offers on properties and the seller will expect you to provide a proof of funds or a verification of deposit as confirmation that you have the cash on hand for the deal.

In this article we are going to look at what defines a proof of funds and a verification of deposit as well as their use and purpose.

Both the proof of funds and the verification of deposit are used in the case of cash offers. They are presented with your written offer to a seller to show you have the money in the bank to make this deal happen as smoothly and as quickly as possible. These typically come from a hard money or private money lender. Here is the definition and descriptive use of both:

  • Proof of Funds Letter – This is typically a free and simple letter from a lender/funder stating that you, as a buyer, have the amount of cash needed to purchase the property. The funds are in an account within the institution described in the letter. This letter has both the contact information and details of both the buyer and the location of the funds provided by the lender/funder.
  • Verification of Deposit – This is an actual bank statement from a lender/funder that has your name on it showing the details of your account with the funds needed to complete the purchase. The only stipulation is that the bank account number is blackened out for information security purposes. Most of these lenders/funders will charge a fee for a verification of deposit.

In some cases, property sellers and their agents might express concern about a proof of funds letter based on its appearance and format. The issue they may have with this letter is that it is coming from a lending institution, giving the appearance of a finance deal, rather than a cash deal.

In lieu of this concern, make it clear that this is where you keep your funds for real estate investing activities. Explain that you have more control over accessing your funds and you have potential tax benefits by not keeping your funds in a personal bank account.

Ultimately, make use of these two fund verification methods so your seller can feel confident moving forward with your cash offer.

Workshop Update | Week 30 – July 25–July 28

This week, Response delivered 12 Real Estate and Stock workshops. Our overall customer experience score, for all surveys received, was a 5 out of 5. We saw over 666 students. Here is what some students shared about their experience:

“Very helpful information.” —Ilie Z.

“Awesome teacher- great energy!” —Jesus S.

“The training was outstanding!”—Amanuel G.

Amazing Results at the Elite Retreat on July 24, 2019

The attendees scored it a perfect score on “would you recommend the event to others” 100%

And “did the event fulfill my expectations” 100%

Both Perfect!

The “Overall Experience” score totaled to be 4.94/5.

This event was focused on stock and options training.

The team did an amazing job with the clients while in Utah.

 

Here are just a few of the comments off the survey forms:

“The way the professionals explain everything and that they were always there to help”

“Useful detailed information, great network of extremely useful business companies”

“Great info – Asset Protection training, Tax training was super helpful.  Really enjoyed when the trainers all traded off showing the class how they would each tackle a certain trade. Super helpful to see different styles and approaches”

“Lots of laughing!  I loved the guys competing with each other to find the best trades.”

“The event ended up being more fun than I had anticipated.  I knew I would receive information and education, but it was also fun.”

“Walking away with a game plan and a clear understanding of what my days as a trader would look like on a regular basis.”

Talking Points when Door Knocking Pre-foreclosures: Part 2

In Part 1 we talked about what a homeowner faces when he or she is foreclosed on.  Now let’s look at what we can offer homeowners to help them avoid all the negative circumstances caused by going through a foreclosure.

Offering to buy the property from the homeowner can resolve most of the negative effects of foreclosure.

  • Depending on the amount of equity in the home and the condition of the property you may be able to offer enough money to put some extra cash in their pocket. This can help them get into another place.
  • Now that they have more control of the situation they will better know the property’s timeline and when it will be sold. This will give them time to get their affairs in order and relocate.
  • This will also help save their credit. Because they missed their mortgage payments, their credit will be negatively affected, but a foreclosure would basically be a death sentence.  One can recover much faster from late payments. Late payments will make it more difficult for the next year, but if they can keep up with their credit payments for one year, their credit usually bounces back with in that time.  It also does not make it as difficult to get into an apartment or to qualify for new credit.  They may even be able to qualify for a new mortgage on a home after a year as well.

When talking to someone facing a foreclosure you can show them it makes a lot of sense to try to resolve the matter sooner rather than later, even if it means selling the property.  It will help them get back on their feet much quicker and save them from a devastating effect on their future.

Talking Points when Door Knocking Pre-foreclosures: Part 1

When door knocking on pre-foreclosure properties it is important to have an idea of what to say to the homeowner who is facing foreclosure.  I like the approach of educating them on what they can expect in the coming months and the ramifications of having a foreclosure on their record.

The first thing I would to tell them is what they will experience as the foreclosure process moves forward.  Once they receive a Notice of Default or a Lis Pendens from the bank, they will have a certain amount of time before the bank can foreclosure on their home.  The state they live in will determine that amount of time they have.  It can range from 30 days to 90 days before the bank can foreclosure on their home.

When the bank forecloses there will be an auction (usually on the court house steps) and the homeowner will be forced to leave the home if they haven’t already.  The bank will send the homeowner notices to update them on the process and provide the auction dates.  If the homeowner is not reading the notices, the sheriff may come knock on the door and give them a small amount of time to vacate the property.

The property will sell to the highest bidder at the auction. If the highest bidder is the bank, the property will then become a bank-owned property or an REO.  Something else to express to the homeowner is that the bank cannot make a profit from a property.  They can keep all money owed to them from the outstanding mortgage, interest and fees, but if the property sells for anything more, the bank cannot keep it.  If the property sells for a higher amount than what was owed to the bank, the money belongs to the homeowner, but it rarely gets back to the homeowner, so any equity in the home is usually lost. (This is a talking point but not something we want to dive into deeper with the homeowner.)

The next issue the homeowner will run into is their credit will be ruined.  It will be at least four years before they will be able to buy a car, get another home, or get any credit at all.  It may also make it hard for them to rent anything as well.

These are the realities that a homeowner in a pre-foreclosure will face if they are not able to catch up on their mortgage.  Most people do not understand the full scope of what they are facing with a property being foreclosed on.  This is a great way to educate them on what is coming.

Workshop Update | Week 29 – July 18–July 21

This week, Response delivered 11 Real Estate and Stock workshops. Our overall customer experience score, for all surveys received, was a 5 out of 5. We saw over 601 students. Here is what some students shared about their experience:

“Overall experience was priceless!” —Horace S.

“Excellent Workshop!” —Reynaldo P.

“Lots of great information!”—David C.

5 Key Factors that Will Help You Understand the Importance of a Buyer’s Agent

Every new real estate investor soon comes to grip with the realization that the purchase of a property can be a daunting and sometimes complicated process.  Does everything start with the actual offer on the property?  Sadly, the answer really starts much sooner.  Before you ever purchase a property, you need to be able to determine if the property in question is the best property and if the price you are willing to pay is the best price.  Assuming that it is the right property, the price then becomes even more important.

It’s entirely possible that you have heard of a “buyer’s agent” and been a little confused.  Many new real estate investors mistakenly believe that if you automatically call the number on a listing sign, you will have an agent that will work in your behalf.  Nothing could be further from the truth.  That agent has signed a contract to work for the seller and to do everything in his or her power to represent the seller.  Nowhere in such listing contract does it say that the listing agent will work to represent the purchaser of the property.

It’s time to understand just how important a good, well-qualified, and knowledgeable buyer’s agent can be.  The term “agent” comes from the concept of “agency” which generally means an action or intervention to accomplish a certain result.  Thus, a buyer’s agent refers to the action of purchasing a property for the benefit of the buyer.  When you engage a buyer’s agent you are engaging someone who is going to work for you, negotiate for you, and stand in your best interest.

As a real estate investor, you should ask yourself if you really need a buyer’s agent.  In order to answer that question, step back a moment and ask yourself these three questions:

  • Do you want to lower the purchase price of the subject property?
  • Are you confident that you can negotiate the best purchase price possible?
  • Do you know who is representing you in the transaction?

Once you answer those questions, you will probably come to the conclusion that you might need additional help to secure the best deal.  That help can come through a well-qualified buyer’s agent.  If you are ready to become a better real estate professional who secures the best deals, you need to consider the following factors about a real estate buyer’s agent.

 

Key Factor #1 – Understand the Benefits of Using a Buyer’s Agent

There are major benefits a real estate investor can receive when using a knowledgeable and well qualified buyer’s agent.  The only real negatives generally appear when an investor has chosen an agent who is not knowledgeable or qualified.  With that caveat in mind, let’s look at several ways a buyer’s agent can benefit you, the purchaser of the property.

  1. Locating the best property. The first thing you need to do is to decide what type of property or real estate strategy you are going to pursue.  Are you going to search for “fix up property”, “potential rental property”, “raw land”, or some other type of property?  You need to determine exactly what type of property you are searching for.  Once you have done this, you will need to pass on this information in specific detail to your selected buyer’s agent. (Later in this article, we’ll discuss how to find and identify a good buyer’s agent.)

Your buyer’s agent needs to be able to distinguish between your wants and needs.  You should let the agent know exactly what you are trying to accomplish.  When you do this, your buyer’s agent will schedule appointments to view the properties and should be able to provide you with advance information regarding both the properties preliminarily selected along with critical facts about the neighborhoods.

  1. Negotiate the offer. This is a major benefit for you, the purchaser of the property.  The buyer’s agent will act as a third party and eliminate uncomfortable situations between yourself and the seller.  Keep in mind the fact that the listing agent of the property is contractually bound to represent the seller of the property.

The buyer’s agent can suggest appropriate starting offers and terms that might be acceptable to the seller.  In all likelihood, these terms might not be the price and terms that the listing agent is offering.  A good buyer’s agent will have researched other sales in the neighborhood and be prepared to have reasons for the price and terms you are offering.  This negotiation is generally made directly between your buyer’s agent and the listing agent.  Once the offer is accepted, the buyer’s agent can help and assist in drafting up the final closing documents.

  1. Recommend and find other real estate professionals. Depending upon the exact strategy that you will be employing, it is very possible that you might need the help of a well recommended contractor, mortgage broker, real estate attorney, appraiser, property inspector, mover, or other professional.  Your buyer’s agent should be knowledgeable about these individuals and be able to provide resources to help close and finalize the purchase of the property.  Having this information in a timely fashion will help you overcome obstacles that often appear when purchasing property.  It may be something in the home inspector’s report, be an appraisal problem, or some other setback.  When you have knowledgeable experts at hand, you are in a position overcome setbacks or obstacles that derail your investment strategy.

SEE ARTICLE: How to Convert Stumbling Blocks into Stepping Stones.

 

Key Factor #2 – Understand the Difference Between a Buyer’s Agent and a Seller’s Agent

You must not believe that the buyer’s agent and the seller’s agent are one and the same.  They are not. When you use the seller’s agent (the listing agent) to negotiate on your behalf, you are positioning yourself in an untenable situation.  The buyer’s agent is working for the purchaser of the property, while the seller’s agent (the listing agent) is working for the seller.  Yes, you want to buy the property and yes, the seller wants to sell the property.  The difference is that you want to purchase the property at a price and terms that make sense for you, while the seller is trying to maximize the sales price on the same property.  In most cases, these goals are not the same.  The seller’s agent is bound by fiduciary responsibility to represent the seller, and not you.

Who do you want representing you?  Do you want the seller to know the absolute highest price you will pay before you even present the offer?  If you elect to use the seller’s listing agent to negotiate for you, you have already lost the negotiation issue.  Let’s take an example from the real world.  If you owned a rental property and your tenant was injured while repairing his motorcycle in your garage and sued you because your garage didn’t provide enough safety equipment, would you want the tenant’s lawyer representing you as well as your tenant?  I’m sure the answer would be a resounding “no”.  The same thing is true when negotiating with a seller.  You don’t want someone bound to and reporting to the seller to be representing you, the buyer.

 

Key Factor #3 – Determine How to Find a Good, or Even Great, Buyer’s Agent

Before you look for a good buyer’s agent, you must decide if you want to use one.  Once you make this decision, you must become very selective in the process.  What you don’t want to do is to choose someone who is not qualified or knowledgeable.  You want to find someone who understands the role he or she will play in the property purchase.

The first thing we recommend is that you immediately disregard the listing agent as a potential buyer’s agent.  The listing agent is legally bound and responsible to the seller of the property.  With this being the case, how can that individual represent you as a buyer’s agent?  You can be choosy when selecting the buyer’s agent.  You may receive recommendations to use your sister’s uncle or some family relative.  While it is difficult to say no to these type of recommendations, it is usually wise to do so.

What you are looking for is someone who truly understands the role of a buyer’s agent and is prepared to fulfill the responsibilities that come with this opportunity.  You can search online for “buyer’s agents” in your specific locality.  It is also possible to get recommendations from other friends who have purchased property using a buyer’s agent.  We suggest that you get several recommendations and then interview these individuals and find out how knowledgeable they are.  During the interview process, try asking these questions of each individual:

  1. Do you accept listings? If the agent does accept listings, this means that he or she is automatically working for the sellers of those properties.  Great buyer’s agents specialize in working with buyers and don’t accept listings from sellers, thus avoiding conflicts of interest.  If the agent accepts regular real estate listings, the agent is basically saying that he or she is working as a dual agent.  Does this sound like what you want?

A final note about agents who work as “dual agents”.  It is not illegal to have an agent work on your behalf as well as for the seller of the property, but when you do, you are competing against yourself.  When an agent agrees to show you a property where he or she is the listing agent, that is exactly what you are doing.  Many real estate professionals have found it more profitable to contract with a buyer’s agent and have that agent contact the listing agent.

  1. What type of properties do you specialize in? In order to increase your success in real estate, you need to find a buyer’s agent who both understands your specific real estate strategy and has had experience in finding these properties.  When your buyer’s agent has past experience, the learning curve will be shortened.
  2. What neighborhoods do you specialize in? You want to find an agent who is familiar not only with the type of property you are interested in, but, knows the area very well.  Hopefully, you will find an agent who has both the experience as a buyer’s agent, but also has experience on a personal basis.
  3. Are you working part or full-time? You need to understand from the beginning how much time the individual will have to devote to scheduling and showing you properties.  If the agent is working only part-time, ask very specific questions as to the availability he or she will have to working with you on your schedule.
  4. What references can you provide? You would be well-served to have references from other real estate purchasers who have used the agent.  You might also ask for references from other professionals like appraisers, mortgage brokers, or home inspectors.  Once you get a list of references, follow through and talk to each of them and ask their professional opinion of the agent.

 

Key Factor #4 – Understand How the Buyer’s Agent Gets Paid

The first question that often comes to mind is “Who pays the buyer’s agent?”  In most cases the fee paid to the buyer’s agent comes from the actual sale of the property.  When the property owner lists the property, he agrees to pay a real estate commission of 5 to 6 percent of the purchase price of the property.  The fee is paid through the listing broker and is generally split 50/50 between the listing broker and the buyer’s agent broker.

Most people say that the seller is paying for the buyer’s agent because the money for the buyer’s compensation comes from the sale of the property.  When you analyze the situation more closely, you recognize that the actual money comes from the payment made by the purchaser of the property to the seller.  Yes, it comes from the seller, but only after the buyer has actually paid the money to the seller.

Professional buyer’s agents have a contract they sign with you, the purchaser, of the property.  This is done when you engage the professional buyer’s agent and is called and Exclusive Buyer Agency Agreement.  The contract between yourself and the agent specifies what he or she will do on your behalf.  Before you sign such an agreement, make sure that you are satisfied with the agent.  The buyer’s agent will work for you.  You must be satisfied that he or she is just what you want.

The agreement is generally for three to six months and can be cancelled by yourself if you are not satisfied with the agent.  Many of these agreements have a clause that states you will pay a minimum amount (often $2,500) from any purchase arranged and negotiated through the buyer’s agent.  This fee comes from the listing commission paid through the seller of the property.  In the case of properties offered “For Sale By Owner”, the fee could be paid separately, or the buyer’s agent may get the seller of the property to pay the fee.

 

Key Factor #5 – Understand the Role of a Credible Professional Buyer Agent

There is an organization that is known as “The National Association of Exclusive Buyer Agents” and is known as (NAEBA).  This organization is a membership organization of buyer agents.  The organization selects agents who don’t accept listing contracts with sellers as the listing contract makes them responsible to the owner and creates an immediate conflict of interest.

You can search for the best buyer’s agents in your specific area by using a search engine and searching for the terms:

  • Real Estate Buyer’s Agents
  • Buyer’s Agents
  • Professional Buyer’s Agents

Try matching the terms with your specific locality and you will find buyer’s agents in your area.

A final word to the wise.  There are always two parties to a real estate transaction – the buyer and the seller.  As a buyer, you want the best price possible on the best property available, according to the best terms you can negotiate.  Consider strongly searching out a knowledgeable and professional buyer’s agent to accomplish your goals.

Home Improvement Tips to Ensure Better Sales!

Now that you have decided to sell your house, you might be tempted to make some basic home repairs to make your house as attractive as possible and to appeal to only the best buyers. Of course, making repairs and beautifying isn’t wrong; however, homeowners tend to overdo it and waste dollars on unnecessary repairs.

So, before you put your home improvement ideas on the table and purchase supplies, take a step back and think about what would really make your property attractive to buyers. The following are three improvements that will go a long way.

  1. Keep walkways and the yard in shape

Even if you have moved out of the property, it is still a good idea to keep the landscape tidy by cleaning the flowerbeds, raking leaves, and removing dead trees. It is also a good idea to set a timer on the lights so your property doesn’t appear eerie and dark. Similarly, don’t let your mail or newspapers pile up. Arrange to have your walkways and driveways plowed every week.

  1. Check your roof and clean the gutters

Cleaning your gutters and checking your roof can easily slip your mind. However, neglecting roof and gutter issues can lead to a severe domino effect that can turn away potential buyers.

Overflowing gutters not only damage the foundation, they cause drainage problems as well. Plus, it is highly unappealing for a potential buyer to see puddling water when visiting your house.

Similarly, the roof will be examined during the home inspection, but it is still better to have someone take a look at it beforehand. Small cracks in the roof often go undetected, ultimately causing water to infiltrate your house slowly and damage the walls and ceilings.

  1. Paint

One simple way to make your house more attractive is to paint the walls with a neutral and soft color. The ideal color is off-white and, while your walls might have a unique, appealing color, others might not have the same taste in paint color. The same applies to carpet.

Four Ways to Overcome Discouragement as a New Landlord

New real estate entrepreneurs who have entered the field of owning rental properties have an all-too-common ailment called “landlord discouragement.”  After that first rental property purchase, the reality of becoming a landlord generally hits them right in the eyes.  Now they are faced with owning property, managing tenants, and continuing with an ongoing investment program.  Yes, owning one rental property is only the beginning of the landlord process.

The most important priority of the new landlord should be “the rent.”  Rent is what can create a positive cash flow and eventually allow the tenant or tenants to actually pay off the mortgage on the property.  As the rent increases, the actual value of the property will also tend to increase as well.  Everything you do as a landlord should be focused on collecting and protecting the rent.  When this is done correctly, the income increases and you will develop better and better tenants.

Why then is discouragement so common among first time landlords?  The answer is actually quite simple:  the new landlords become immediately responsible for maintaining the property, finding and keeping good tenants, and managing the finances of the property like an expert.  These multiple tasks far-too-often seem undaunting and formidable.  There are four easy-to-understand ways to overcome this ailment before it derails your future rental property adventure.  Each of these ways are based on conducting a review of certain key issues and concepts.

Way 1 – Review Your Personal Life. Before you can correct how you feel, you must determine what is causing you to have these personal feelings of fear and doubt.  Are you concerned because of the financial burden you are facing, or are you facing different challenges that are more evident because of the new burden of being a landlord?  Take a few minutes and evaluate your personal life and see if there are personal underlying issues that are manifest by your becoming a landlord?

  • Personal Health Problems. Are there health problems that are becoming more evident because you are now experiencing new investment challenges?  If you have problems dealing with people like your new tenants, you need to address that situation and consciously try to become more outgoing.

Perhaps you have a health problem that requires you to spend a great deal of time dealing with doctors and hospitals.  Now you may not have the time to spend looking for tenants or dealing with property issues. Whatever the issues may be, you need to prioritize your time in a way that allows you to also take care of your responsibilities as a new landlord.

  • Outside Distractions. Is there something in your life that is now taking more time to deal with?  Are you dealing with family and children issues?  Is there a personal problem with your employment?  In essence, is there some outside distraction or influence that is now taking more time than you had originally planned?  Whatever the distraction, you will need to deal with it and then manage your time more effectively.  Only when you control these outside factors will you become an effective landlord.
  • Personal Finances. Has the purchase of the rental property placed you in a personal financial hardship?  Needless to say, the investor should avoid placing personal finances in a precarious position due to a property purchase.  If you have placed yourself in such a situation, consult with professional help and consider getting a partner or garnering help from some outside resource.  Until your personal finances are in order, you will not feel comfortable in your new role as a landlord.

Way 2 – Review Your Property.  Just as your future success is dependent upon the rent from your tenant, the tenant is also dependent upon the property itself.  You, as the investor, need to evaluate and appraise that first rental property and make sure that it is conducive to providing the rent you are after.

  • Property Financing. The first thing you need to evaluate is the actual financing arrangements you have made for the rental property.  This financing should have been examined in detail before the purchase was made, but if there is something that could hinder your success, it should be evident immediately.

Perhaps your purchase was made with an upcoming balloon payment or an adjustable rate mortgage that could increase your payment dramatically, or maybe you accepted a high interest rate that now exceeds the norm.  Regardless of the actual financing problem that you identify, you need to consult with credible financing experts who can possibly guide you to a more beneficial arrangement.

If you identify a potential problem that is going to increase your payment or make it necessary to acquire outside funds, don’t disregard the opportunity to bring in a partner who can help.  Before selecting such a partner, make sure you will be comfortable in the arrangement.

  • Location Problems. It’s true that location is key to almost all real estate purchases and that is definitely true for rental properties.  If you are having problems renting or finding qualified tenants for your property, it’s possible that the location may be at fault.  Now that you own the property, you need to make the most of the situation.

Start by improving the “curb appeal” of the property.  Great tenants like to live in great properties.  The first thing your potential renter is going to see is the curb view, so make that first impression very important.  Mow the grass, trim the shrubs, and most importantly, remove all trash or discarded items from the property.  The better you make the property look, even in a lesser valued location, the better chance you have of finding the right tenant.

  • Repair and Maintenance Problems. Hopefully, you had a reputable property inspector due a complete review of the property before the purchase was closed, but if not, you need to carefully evaluate any existing repair problems that need to be addressed.

Start with repairs that will have to be done before any potential tenant will take occupancy.  These repairs generally include appliances, water heater, furnaces and the like.  It is important that you get credible help in choosing the right appliances for the right price.  The most inexpensive appliances are not always the best.  A truly inferior appliance that comes with a cheap price may have to be replaced much too often.  Get good appliances that don’t have all the bells and whistles.

Avoid renovations that won’t increase the rent you receive.  Adding an extra bedroom at a low cost may be wise, but only if the rent can also be increased.  If you allow tenants to request renovations, chances are that these same tenants will not want their rent to be increased.

Regardless of the repairs that need to be done on an immediate basis, you will continue to have repairs.  Make sure that you set aside a reserve account from the rent to pay for these repairs when they happen.  When unexpected repairs surface without funds set aside for their payment, you are headed for more discouragement.

  • Rent. You need to evaluate if you are charging the correct rent.  Are you asking too little or too much?  Take the time to compare your rent to comparable properties in the area.  Make sure you are comparing apples to apples by determining what you offer as to what the other properties offer.

Way 3 – Review Your Tenants. Prompt rent is dependent on great tenants.  This being the case, you need to review not only who your tenants are, but how you are getting them.  When you understand the marketing process, you will find tenants who are willing to pay top dollar for the right property.

  • Marketing Process. Since you are new to the landlord process, you will want to make sure you start with an application form that allows you to choose the best tenants.  Many new landlords become discouraged because they simply fail to use the right documentation.  Avoid this problem by collecting the right information to choose the best tenant.

The first thing you need to do is to advertise your property effectively.  You can use existing methods such as flyers and notices, but sometimes you will be more effective by contacting the HR Departments of local employers and governmental authorities who can provide your information to new hires.

Don’t forget to use proper signage on the property itself.  Once again, we can’t stress enough the importance of good curb appeal.  Let the property start to sell itself.

  • Get the Right Tenants. Once you have identified potential tenants, you need to screen them to locate the great tenants.  This process starts with a well-documented application form.  As you develop your personal application form you will see why the information you collect is so important.
  • Personal Information. This should include the name or names of the prospective tenants along with names of the children.  Don’t forget to include if they have pets and what type of pets they are.  Most landlords don’t allow pets, but if you do, you need to realize that there are expenses incurred with allowing pets in the property.
  • Social Security Number. Yes, you need to collect this in order to get a credit report and to verify employment information.  It should be guarded carefully, but it is essential to finding credible and qualified tenants.
  • Previous Address. You will want to check on their past rental history.  This also allows you to discover information about their past payment history.
  • Driver’s License Number. This information will allow you to do some local background checks.
  • Employment. You will want to know who their employer is and how long they have worked there.  You should also ask how much they earn, as this will assist you in determining if they will be able to afford the rent.  You should also ask for a contact at their employment as you will want to verify their employment.
  • References. Besides any family references they may provide, you will want to solicit at least two or three references of non-family references.  Once you have these references, make sure you follow up and talk to them.
  • Identify the Characteristics of Great Tenants. Every landlord wants great tenants and here are a few qualities of those individuals you would like as your tenants.
  • Prompt on their Rent. Naturally, you want to collect your rent on time.  The best way to do this is to offer an incentive to pay their rent through an “auto pay” arrangement with their bank.  When you talk to referrals from a prospective tenant, try to determine if they pay their bills on time.
  • Clear Communication. You need to be able to talk clearly and understand your tenant.
  • They Are Neat and Clean. If your prospective tenant comes to apply for the property in a dirty car filled with trash, chances are that they will treat your property the same way.
  • Good Employment. The more stable the employment picture, the more stable your rent will be.  This is why you want to contact their employer.

Way 4 – Review Your Management Options. If you are immediately discouraged as a new landlord, you may just be overwhelmed by the extra responsibilities you now have as a landlord.  Perhaps you are spending a great deal of time dealing with new tenants or just collecting rent.  Maybe you are flooded with minor repair issues or simple questions by tenants.  Regardless of the reasons, you are probably aware of increased time obligations that come with the landlord responsibilities.

  • Continue to Personally Manage the Property. If you elect to continue doing all the management of the property, the first thing we recommend is to document everything and keep great records.  This takes more time at first but will pay big dividends when you do your taxes and when you eventually decide to sell the property.  It will also help you in following up on repairs etc.

This is your first property and you should use it as a learning experience.  Yes, you have added time obligations and financial responsibilities, but these can help you learn the landlord business.  Consider this first property as an educational experience.  You will make mistakes, but if you keep good records, you will only make them once.

  • Consider Professional Rental Property Management. If the responsibility of being a landlord is too much, go ahead and seek professional help.  It will cost more, but may save you the added headache of managing the property yourself.

SEE ARTICLE: “5 Reasons Why Seeking Professional Help When Starting in Real Estate May Be the Key to Success”

Discouragement is natural among almost all new rental property owners.  How you handle it is most important.  There is no doubt that you may make a few mistakes or even failures as you learn to become an effective landlord, but remember what Dale Carnegie said: “Develop success from failures. Discouragement and failure are two of the surest stepping stones to success.”  Your future can be bright and success be right around the corner as a new landlord

 

Workshop Update | Week 28 – July 11–July 14

This week, Response delivered 13 Real Estate and Stock workshops. Our overall customer experience score, for all surveys received, was a 5 out of 5. We saw over 667 students. Here is what some students shared about their experience:

“I believe in this training!” —Sara D.

“Thank you for sharing good, useful information!” —Aera L.

“Extremely valuable information!”—Ryan O.

Simple Strategies Real Estate Entrepreneurs Can Use to Improve Their Credit Score

Every real estate entrepreneur quickly learns that establishing good credit is essential for structuring sound and profitable real estate deals.  Whether you are searching for long-term financing for a new rental property or looking for short-term funds for a fix up, your success may very likely be tied to your ability to secure loans with lower interest rates and great terms.

Lenders will evaluate your ability to repay these loans based to a large degree on what is known as your “credit score”.  This credit score is also referred to as your FICO Score. This term has become common place in the finance community because the software used to calculate the credit score was developed by the Fair Isaac Corporation (FICO).  Since 90 percent of all commercial lenders use the FICO Score to determine an individual’s ability to repay a loan, it makes sense for the real estate entrepreneur to improve his or her credit score as much as possible.

Creditors make their decisions based on your credit score.  The credit score is determined based on five factors.  Payment history accounts for approximately 35% of the score; amounts owed for approximately 30%; length of credit history approximately 15%; total amount of credit approximately 10%; and types of credit approximately 10%.  You can’t hope to improve your FICO Score unless you know what that score is.  Start immediately by obtaining a copy of your credit report.  You can contact the major credit reporting bureaus, including: Equifax, Experian, and TransUnion.  There are also numerous resources for obtaining a free copy of your personal credit report.  Simply log on to one of the major search engines and search for “FREE CREDIT REPORT”.

 

Strategy #1 – Obtain and Review Your Credit Report

Once you have access to your credit report, you need to commit yourself to reviewing the information contained in the report.  It’s possible that some of the information provided by the banks, financial institutions, and contributing companies could be in error.  It’s also possible in today’s climate of identity theft that your identity could be used in fraudulent transactions.  If you identify any errors, you need to call and contact the contributors to correct any mistakes that you identify.  In some cases, a simple contact by phone might immediately improve your credit score.

When you contact these companies, you must be aware that you will need to provide evidence of who you are and why the item you dispute is incorrect or outright false.   One entrepreneur recently reviewed his credit report and found that his score was negatively impacted by failure to pay alimony and child support.  He was quite surprised because he had never been married or fathered any children.  In his case, he had been misidentified because there was another man with the same name and the social security numbers were mixed up.

This action of reviewing your credit report should be done on a regular basis as new entries on your credit report are constantly being added.

 

Strategy #2 – Immediately Improve Way You Pay Bills

Your credit score is determined by five major factors starting with the payment history.  Approximately 35% of a credit score is based upon the history of the payments made on past and present bills.  This being the case, you need to take preemptive steps to maintain good payment practices or improve slow or late payment practices.  When you review your credit report, you will notice immediately the impact of late payments.  If that’s the case, now is the time to turn that trend around.

Start by the simple act of making a schedule of when you pay your bills and then pay the bills on time.  It helps to make a list of all your bills and the due dates on regular bills.  An added benefit is that you see in real terms what how much of your income is going out on regular bills.

Consider signing up for automatic payments on regular occurring debt.  The advantage of this is that your bills are paid promptly, and in many cases, you will get better terms from the lender.  Make sure that you have the funds on hand in the accounts you use to fund these automatic payments.

There may be times when you as an entrepreneur find yourself in a financial situation where you can’t avoid a late payment.  Avoid these situations whenever possible, but if it happens, make sure that you never let the late payment go more than 30 days.  Some lenders don’t always report late payments up to 30 days, but all report late payments that are 60 days late.  Above all, don’t make a habit of being late even for a few days on bills that become due.

 

Strategy #3 – Manage Your Personal Credit

Approximately 30% of your FICO Score is based on the amount owed by an individual.  Your first objective is to avoid opening new credit accounts.  In today’s world, you are offered incentives to open new credit accounts on a constant basis.  Even if you don’t plan on using this credit, the newly opened credit account will have a negative impact on your credit score.  Despite the credit account being open, the lender may believe that you may have future problems in reducing or paying off the debt.

Next focus on paying off credit cards.  Credit card interest is usually the highest interest rate charged for a loan.  When you have credit cards, try and pay off the loan as rapidly as possible, and once you have past credit card amounts paid, attempt to pay off the balance entirely when it comes due each month.  This will help raise your credit score right away.

It’s entirely possible to get into the position of having high credit card balances, but doing so will create problems with your credit score, while having a negative impact on your ability to make good real estate deals.  If you do have a balance on your credit card, it’s been found that you want to keep your credit card balance at approximately 30% of the card’s available credit.  This means, in simple terms, that if you had a credit limit of $10,000, you would not want to have a balance of more than $3,000.

 

Strategy #4 – Start Eliminating Debt

Naturally we all want to get out of debt.  When we do so, we have a much more enjoyable life, but it also allows us to increase our credit score.  There is a difference between investment debt and personal debt.  Your credit score can actually increase when you are purchasing a home.  If you haven’t had credit in the past, you will want to establish credit by purchasing an automobile or some other asset on credit.  The key is to establish the credit and then to pay it off.  It has been shown that if you maintain the loan and make regular payments for at least 8 months, you can establish regular payments.  Once you have established credit, start getting rid of as much debt as possible.

The first debt you want to immediately eliminate is credit card balances.  You should now be aware that these unpaid balances on credit cards will reduce your credit score.  Some entrepreneurs want to cut up their credit cards, which will help if you are overspending, but credit cards you’ve had for a long period of time that are paid off or have zero balances help your credit score.

When you have a lot of unused credit available and not using it, your credit score will improve.

 

Strategy #5 – Establish and Maintain an Emergency Fund

Financial advisors have suggested for decades that it’s always wise to have an emergency fund that will pay for dry periods when you can’t meet a portion or all of your financial obligations.  The ideal amount seems to be six months of your annual income.  This may seem daunting at first, but if you learn to budget, it’s achievable over time.  In order to build up an emergency fund, you will need to learn to live on a budget.

Six months of emergency funds won’t happen immediately, but if you start with the goal of having one month and then two, it can take place.  Once you have the reserve to meet your regular budget needs, and especially your debt payments, live itself becomes much better.  Your credit score with naturally improve.

The different credit bureaus have different ranges, but they all seem to be fairly close.  Experian uses the following range to evaluate scores:

RATING SCORE
Very Poor 300-579
Fair 580-669
Good 670-739
Very Good 740-799
Exceptional 800-850

 

Improving your credit score takes work and time, but the rewards for the real estate entrepreneur can be amazing.  With a better and improved credit score you can qualify for better interest rates, get faster approval on loans, and open the door for bigger and better real estate deals. You can improve your credit score with discipline, and when you do, you will have access to better and better deals.

Workshop Update | Week 27 – July 5–July 7

This week, Response delivered 5 Real Estate and Stock workshops. Our overall customer experience score, for all surveys received, was a 5 out of 5. We saw over 268 students. Here is what some students shared about their experience:

“This was a great experience!” —Crystal C.

“Incredible!” —Martha K.

“An opportunity no one should pass up!”—Valentin C.

Workshop Update | Week 26 – June 27–June 30

This week, Response delivered 15 Real Estate and Stock workshops. Our overall customer experience score, for all surveys received, was a 5 out of 5. We saw over 816 students. Here is what some students shared about their experience:

“It was great!” —George M.

“Great info!” —Krista O.

“I really learned a lot!”—Anthony C.

7 Elements of a Great Work Ethic for New Real Estate Investors

New real estate investors quickly learn that investing in real estate is far from easy.  Success is possible, but it is almost totally dependent upon the ability of the investor being able to acquire a strong work ethic.  The term “work ethic” is commonly described as having a belief that hard work and diligence have a moral benefit and demonstrate a high value in strengthening character.

Your ability in developing a great work ethic will ultimately determine the degree of success you obtain in real estate investing.  Regardless of whether you decide to invest in rental properties or determine to find good fix up properties and flip them for a profit, the work ethic you demonstrate to buyers, sellers, or other investors can be paramount in reaching your real estate goals.  This being the case, let’s examine 7 specific elements of a great work ethic and apply these elements to real estate investing in the economy of today.

 

Element #1 – Taking Responsibility for the Work from Start to Finish

Once you determine which specific strategy you are going to follow in your real estate investment endeavor, you must assume the role of principal leader.  Yes, you may have partners and investors that are part of your team, but you are responsible for your actions and for the work of your team.  You may hire competent individuals to assist you in finding properties, performing fix up and repairs, appraising, doing inspections and a myriad of other tasks, but it is still your responsibility to ensure that the work is done and done correctly.  You can’t assume that other individuals are doing what you asked them to do unless you check on them and review what they do.

As the responsible party, you must always be aware of what the other members of your investment team are doing.  When we talk about being responsible from start to finish, we are indicating that we won’t blame others when something doesn’t go as planned.  If you have hired a contractor to repair a sidewalk and you don’t give exact instructions on how the work is completed, and then you aren’t satisfied with the end result, don’t blame the contractor.  You must be involved and give specific instructions if you want specific results.  When you blame others when you haven’t given adequate and detailed previous instructions, you are showing the world that you have the exact opposite of a good work ethic.

Responsibility is often referred to as the state or fact of having the duty to deal with something or having control over someone.  This control doesn’t imply that you are mean or belligerent to others, but rather, that you are the final decision maker and the one who bears the blame or the rewards for the results that occur.  When you fully assume the role of responsible party, you are accepting the consequences of your actions and decisions.  However, with responsibility comes the ability to take action and direct changes when circumstances dictate.

In order to make changes, you must learn all you can about the real estate strategy you are going to follow.  The more you know, the better equipped you will be in directing others toward joint real estate goals.  As you develop the ability to assume the mantle of responsible leader, your real estate success can and should also increase.

 

Element #2 – Demonstrating Honesty in all Areas of Your Investment Strategy

Honesty means much more than just returning borrowed tools from your neighbor.  A truly honest person is recognized as being honest in all areas of his or her life.  If you aspire to be an honest person, you must first understand what honesty is in business, and specifically in real estate investing.  Honesty is basically defined as the straightforwardness of conduct along with the absence of lying, deceit, cheating, theft and the list can go on indefinitely.

A truly honest individual will always be trustworthy, loyal, sincere, and fair.  When you apply these traits in investing in real estate you quickly realize that you aren’t going to deceive another party.  When you are selling a property, you are not going to hide obvious defects in the property, nor are you going to say things that are not true.  Your ability to state the facts as you know and understand them will help you acquire properties that pay both short and long-term dividends.

Some new real estate investors may be tempted to overstate figures and facts, and when this happens, failure is soon right around the corner.  Always be truthful in your disclosures and in your goals and objectives.  When you do this, you will find that people trust you and will behave as you would want them to.

It’s been said that honest people don’t hide their deeds.  In real estate you can expect people to trust you if you do what you say you are going to do.  This level of trust then becomes reciprocal.  James Altucher once said, “Honesty is the fastest way to prevent a mistake into a failure.”  Almost all real estate investors make some kind of mistakes.  When it happens, own up to your mistakes and be honest with other people who may be involved.  When you do this, you are almost always rewarded in the future with respect from others who cherish your ability to be honest and straightforward.  If you make appointments and are running late, be honest and let the other people involved know of your delays.  The more honest you are with others, the greater respect you will receive, and this respect will directly affect your ability to achieve success.

 

Element #3 – Displaying Self-Discipline in Your Investment Strategy

Naturally, you must have learned and adopted a specific investment strategy before you can begin the process of being disciplined in following it. If you are interested in finding great rental properties, you must spend the time learning what are the attributes of such properties. There is a difference between short and long-term rentals, and you must first understand what these differences are.  Some rental properties are geared toward young families, while other properties are much more suited towards larger families.

Disciple means that you are willing to spend the time and effort in following through with your goals and aspirations.  Applying this to finding the right rental properties means that you will spend your time and efforts becoming more knowledgeable about market conditions and properties.  Being disciplined means that you have the strength to withstand hardships and setbacks as they occur.  And they will occur at one time or another in your real estate investment career.  Perhaps you will have a deal that doesn’t go happen as planned.  When this unfortunate event occurs, what will you do?  Will you give up or will you evaluate your mistakes and move forward?  You must have the fortitude to overcome setbacks and see them as stepping stones.

SEE ARTICLE: “How to Convert Stumbling Blocks into Stepping Stones.”

This ability to master self-discipline is best achieved by adopting clear goals and following simple steps.  In other words, develop an execution plan.  Know in advance what you will do in unexpected circumstances.  Planning for the unexpected prevents unexpected results. The more time you take in following pre-planned strategies, the better your short and long-term results will be.

Self-discipline has been defined as “the ability to control one’s feelings and overcome one’s weaknesses, or the ability to pursue what one thinks is right despite temptations to abandon it.”  In real estate investing this temptation to abandon a strategy is far too common.  Oftentimes investors become tempted to give up because of the amount of time and effort required to achieve tangible results.  When you are discouraged because you haven’t found the right property for the right price, hang in there and put in the extra effort required to achieve the results you are looking for.  As you learn to control your feelings and move forward when discouragement happens, you will develop more and more self-discipline.  When this happens, you will become more successful in your investment strategies.

 

Element #4 – Being Respectful to all Your Associates

Respect is something earned and not given, and when you learn to show respect to others, you will earn respect in return.  This is especially true when you are developing a real estate investment team.  How you deal with the people you come in contact with will directly impact how successful you will become in real estate.  These one-on-one contacts include interactions with real estate agents, property owners, buyers, and real estate professionals.  As you interact with these individuals, you should always show them respect through your words and actions.  This respect is demonstrated by the regard you give to others’ feelings, wishes, and beliefs.  The first time you show disrespect by disregarding the feelings and beliefs of others, will be the first real estate failure you encounter.

Some of the simplest ways of showing respect to others are through easily learned skills.  Start by learning to listen to what is being said.  This is more than just staying quiet while words come out.  True listening implies empathy towards the other individual.  The words “silent” and “listen” have the same letters, but have totally different meanings.  When you truly listen to another individual you are trying to understand what the person is feeling and implying, not just the words.  As you develop this skill, you will develop the ability to receive and interpret messages.

Consider meeting with a seller and asking him why he is selling the property.  You may be tempted to just listen for the price, but there should be much more.  You need to understand the reasons for the sale.  When you do this, you will make a better deal and will also show respect to the seller by listening to the reasons for the sale of the property.  You could also encourage the other person to reveal more and more information.

The more encouragement you offer someone else in revealing information, the more respect you are showing.  As you learn to do this, you will also develop better one-on-one relationships.  Encouragement implies giving support, confidence, and hope.  Once the other individual feels this level of support, the better he or she will feel about you as a person and a potential partner of some kind.

 

Element #5 – Showing Professionalism in Your Actions

Professionalism is a word used far too often and far too often misunderstood.  By definition the word implies confidence and skill.  And, yes, you do want to be a professional in your real estate investment endeavors.  How then do you develop and demonstrate confidence and skill as a “NEW” real estate investor?  Since you are new in the real estate investing world, confidence may still be lacking.  However, you still have certain skills.  Perhaps you have developed the ability to speak clearly.  If this is the case, demonstrate it.  Do a self-analysis and determine areas where you have skills and demonstrate and use these skills.  How you dress can also demonstrate professionalism.  If you are looking for investment partners, dress appropriately.  It’s often been said that how you dress impacts what you achieve, and this can certainly be true in real estate.

Professionals do what they say they are going to do.  If you want to be perceived as a professional, you must do the same thing.  If you set an appointment for a certain time, then keep it.  If you say you are going to show the seller of a property financial information that explains how you are going to pay for the property, then do it.  If you tell a potential buyer of a property that you will show where there was a leak in the roof, then show it.  Simply stated, do what you say you are going to do.

 

Element #6 – Exhibiting Teamwork when Developing a Real Estate Team

It is extremely doubtful that you will achieve success in real estate all by yourself.  You will undoubtedly need a team of some kind.  You may involve friends and family as investors. These could be silent or public partners.  Maybe you will include real estate agents and attorneys as part of the team.  Additionally, you may want to have a good financial partner as part of the team.  In a short period of time, your team could include many individual people who have different skills and talents.  How you develop that team will be crucial to the success of your real estate adventure.

Having the team is important, but how you operate the team is much more critical.  This is what we call teamwork.  The definition of teamwork is the combined action of a group of people, especially when effective and efficient.  Your real estate team must be both effective and efficient.  The failure of the team to exhibit this quality is the best definition of ineffective teamwork.

Teamwork implies a common goal achieved by collective efforts.  It is imperative that your team work together.  The only way this happens is when you lead it effectively.  This starts when you make teamwork a priority and reward the efforts of both the individuals and the team.  Your goals and the team goals must be one and the same.  When you are working together, you will achieve success.

Two qualities that are very important are trust and communication between team members.  If you are searching for the right rental property and are using a buyers agent, then you must communicate with the agent exactly what type of property you are searching for, and then trust the agent to locate potential properties that fit your criteria.  Ken Blanchard once said, “None of us is as smart as all of us.” This is certainly true when developing a team that works together in real estate.  When you rely solely on your own decisions, you are eliminating the power of teamwork.

 

Element #7 – Taking Pride in the Quality of Work

Work is the foundation of success in real estate.  Work is what fuels the engine that drives you toward your goals and aspirations.  As you complete goals, you should take pride in your accomplishments.  Others will see what you accomplish and value your efforts.  When you take pride in doing good work and accomplishing your goals, you are exhibiting the benefits of a great work ethic.  It’s only when you value what you do that you’ll be able to do what you dream of doing.  Learn to enjoy every facet of your real estate journey.  When your work becomes joy, your work ethic will increase.  Pride in the quality of your work is the deep pleasure or satisfaction that comes from accomplishing goals and achievements.  The key is the word “quality”.  Only when we meet our expectations can we truly say that we have achieved quality.

A great work ethic is something every real estate entrepreneur should desire.  When you develop these seven elements, the goal of a truly great work ethic is now attainable.

Workshop Update | Week 25 – June 20–June 23

This week, Response delivered 14 Real Estate and Stock workshops. Our overall customer experience score, for all surveys received, was a 5 out of 5. We saw over 675 students. Here is what some students shared about their experience:

“Really good workshop!” —Stephanie G.

“Tons of valuable information.” —Roxanne K.

“Looking forward to the next workshop!”—Enoch A.

Cash Flow in an Up and Down Economy

Cash flow: for some it is the thing they can never figure out; for others it flows like well water.

How do you set up cash flow? How do you keep cash flow coming in? What properties can bring in cash flow?  Cash flow can be set up through single-family homes, multiple unit properties and commercial properties. The focus for this article is on commercial property storage units.

Storage unit facilities come in varying sizes and layouts, from a small, single row of units to a multi-acre facility that has indoor and outdoor storage capabilities.

Storage units are able to survive in high and low economic times because of people’s need to acquire “stuff.”  In good times, people need a place to store the extra stuff they have. In lean times, downsizing happens so people store the stuff they cannot part with.  As a storage facility owner this is all great news, along with the fact that I will not need to unclog any toilets or worry about the eviction process.  If someone does not pay for their storage unit, the unit will be locked and the unit owner will typically be given a 30 to 45 day notice. After that the unit will be put up for auction.  At the auction, the unit will be opened and people can look, but not go in the unit itself. The unit goes to the highest bidder. Typically the unit needs to be emptied by the end of the business day.

Now, when evaluating cash flow from existing storage units, there are multiple considerations to make:

-What is the current occupancy rate? How do the prices compare to close by competition?

-What is the mix of size of units in the area? How many units are available in competing facilities?

-What type of storage is being offered: outside, RV, inside, climate controlled, small vehicle?

-Are there mixed-use facilities in the area: car wash attached, mobile home or RV park adjacent, vehicle rental facility or moving supply store?

-How long has the facility been in operation?

-How close are the nearest competitors?

This is a short list of things to check on a cash flowing commercial property, specifically a storage facility. As with any type of commercial property in a city, we want to make sure the city is still happy to have the facility operating within city limits. Talk to the planning and zoning commission to find out what the city’s 5-year plan is and how they see your facility playing into it.

I have seen facilities that went back and forth with the city for five years on what was needed and how the facility should look before the building was approved —it took four phases. But because planning was completed before the second phase of development, the facility was fully rented during phase one.  Understanding what your objective with your property is for the next five years will help you plan ahead and help your cash flow, even in a down market.

Workshop Update | Week 24 – June 13–June 16

This week, Response delivered 15 Real Estate and Stock workshops. Our overall customer experience score, for all surveys received, was a 5 out of 5. We saw over 734 students. Here is what some students shared about their experience:

“I haven’t slept since we started due to excitement!” —Cynthia M.

“I learned so much!” —Jacqueline S.

“Fantastic training!”—Odessa H.

Workshop Update | Week 23 – June 6–June 9

This week, Response delivered 14 Real Estate and Stock workshops. Our overall customer experience score, for all surveys received, was a 5 out of 5. We saw over 813 students. Here is what some students shared about their experience:

“One of the best informational programs for real estate!” —Melanie L.

“Very helpful event!” —Eve F.

“Fantastic class.”—Arlington L.

4 Factors Every New Real Estate Entrepreneur Must Understand About Positive Body Language

There comes a time in the experience of virtually every new real estate entrepreneur when they learn that what they say may not be nearly as important as to how their actions mirror their true thoughts. Body language is something that is critically important for every new real estate newbie. It will soon be apparent that your success in structuring true win/win deals will depend upon your ability to communicate effectively with the opposite party to the transaction, and your body language will play a major role in this vital communication.

If you search for the meaning of Body language, you will find that it is defined as the non-verbal communication between two individuals or a group of individuals through physical behaviors such as limb movements, facial expressions, eye movements, other bodily gestures and postures. Subtle movements you unconsciously make may determine the outcome of real estate transactions, both large and small.

Yes, body language is critical to your success as a real estate entrepreneur.  Let’s examine 4 factors every new real estate newbie must understand about creating strong and powerful body language.

 

Factor #1 – Power of Positive Body Language

Arthur Ashe, the great tennis pro, is respected around the world for his ability to project self-confidence.  He once said, “One important key to success is self-confidence. An important key to self-confidence is preparation.”  As you learn to project positive body language you will understand that your posture when speaking and listening is paramount.  Correct positive posture creates personal confidence, but this can only take place when you prepare ahead of time.  Imagine your first interaction with the seller of a property that you have identified as a great rental property.  If you fail to stand erect and straight, the seller may decide that you are not a serious investor.  How you stand, walk, and even sit is important as positive posture can provide the self-confidence you need as a successful real estate entrepreneur.

Your goal as an investor and negotiator is to create a positive connection with the opposite party, or in our case the seller.  Your eyes are far more important than you might imagine in establishing this link with the seller.  Correct eye contact instills a common bond.  It is vital that you look directly at the other party.  It is common for a new investor to look away from the other party.  Oftentimes this is done out of fear.  He or she may fear being rejected or they might fear making a mistake in what they say.  The common bond between yourself and the other party will often hinge on the connection made with the eyes.

It has been shown that smiling has many positive health and success factors.  Researchers have found that smiling can relief stress and even lower blood pressure.  There is, however, an even more important value of projecting an honest smile. A smile will improve your personal outlook on life, but it will also improve the mood of those people around you. True Smiling provides trust, and trust is an important key in structuring real estate transactions.

Touch is the first sense we acquire as a newborn and it is also important in creating powerful body language.   Matthew Hertenstein, a researcher from DePauw University, demonstrated in a study in 2009 that we have an innate ability to decode emotions via touch alone.  He found “that participants communicated eight distinct emotions – anger, fear, disgust, love, gratitude, sympathy, happiness, and sadness – with accuracy rates as high as 78 percent.”  The act of touching may be self-touching such as brushing your eyes or it may be a simple act of shaking hands.  A caveat is that we must avoid invasive touching of another person.  Non-invasive touching can open a door of understanding between 2 parties.

 

Factor #2 – Positive Body Language Can Be Learned at Any Age

We learn to project our feelings through body language from birth, and we continue to learn new ways of expressing our true feelings throughout our life’s adventure.  As a new real estate entrepreneur, it’s not too late to learn better and more effective ways of communicating through positive body language.  In order to correct negative body language, we need to realize that it is a step-by-step process. We can break it down into ten easy-to-understand steps:

Step 1 – Understand what you are presently showing. Before you can correct negative body language, you must be aware of what you are already doing.  Awareness should not bring self-criticism, but rather it should make you cognizant of what changes you need to make.

Step 2 – Examine and study others. Pay attention to what people around you are doing and acting.  As you consider their actions, take the time to ask yourself what feelings you are getting.  You will be able to survey both positive and negative body language.  As you review their actions, take note of the personal feelings you are generating from those actions.

Step 3 – Replicate other positive people.  You want to learn from others and the best way to do this is to mirror the actions of others.  Consider a friend who always seems interested in what you have to say.  Is that individual establishing good eye contact and exhibiting a true interest in listening?  If so, then start to do the same thing.  Mirroring success is a great way to achieve personal success in learning positive body language.

Step 4 – Be aware of crossing patterns.  We seem to always cross ourselves.  We cross our arms and our legs.  Crossing arms in front of your body can create the image of rudeness or self-importance.  However, if you cross your arms behind your back, it seems to illustrate a sense of being at ease.

Step 5 – Establish non-threatening eye contact.  If you are alone at night in a strange neighborhood, you have always been told to avoid making eye contact.  This is done out of fear.  In creating a positive body language, you want to establish direct eye contact.  It will draw the other person to you and create a bond.  The key is to always smile and show an interest in the other person.  A frown or passive look of disinterest will derail any negotiation.

Step 6 – Straighten and Relax your posture. Your posture is important and you should avoid slouching at all costs.  If you take the time to stand straight and relax, you will find that you are immediately interested in the other person.

Step 7 – Establish position.  If you are talking to another person, face them directly.  Don’t look away.  You want to communicate one-on-one.

Step 8 – Avoid unstated questions. Speech may not actually be considered as body language, but your intonation can have a profound effect on how you communicate.  If you sound gruff, it will be negative.  Avoid upswings in your intonation as they indicate a lack of self-confidence.

Step 9 – Control your hands.  Everyone wants to know what to do with their hands.  If you put your hands behind your back, you project confidence, while your hands in pocket can show over confidence or boredom.

Step 10 – Relax and sit in engaging position.  Finally, you need to learn to relax in a comfortable position.  It will take time to correct negative body language, but when you do so, you will have greater success in negotiating great real estate transactions.

 

Factor #3 – Understand the Body Language of Others

As you mirror the body language of others, you need to read the feelings of the other party.  It is equally important to understand what your opposite is actually communicating with you.  Your opposite will be more forthcoming if they see you responding to their body language.

Pay attention to the other party and don’t be afraid to take notes.  When you do so, it will demonstrate to your opposite that you are engaged and attentive.

Finally, when you are done talking and interacting with the other party, end with a positive handshake.  Look the person in the eye and smile.  This action will show that you are excited.  Most importantly, it will indicate that something more is to come.

 

Factor #4 – Avoid the Negative Signs Leading to Disaster

Watch for these signs in your personal body language as well as in the body language of your opposite. These are signs that will lead to negative outcomes.  It is important that you avoid these signs at all costs, but it is also important that you are aware when your opposite is demonstrating the signs.  If your opposite is revealing any of these signs, you need to evaluate whether you are negotiating in good faith.

  1. Distracted eye contact. Don’t look around the room. Treat everyone with respect.  When a person exhibits this sign, it indicates that the other party is not important and they are already moving on to someone else.
  2. Negative eye contact. Looking at anything or anyone else shows that the person has no interest in the other party or in what is being said.
  3. Gazing at your phone or ipad. . It emphasizes that you are not interested to what is being said.  You may hear the words, but to the other party, it is like talking to a brick wall.
  4. Failure to listen. Nothing will discourage the other party more than noticing that the other party isn’t engaged in the discussion.
  5. Rapid speaking. This is a sign of distrust or nervousness and nothing is more disruptive.
  6. Invading opposite’s personal space. Never treat the personal space of the other party as belonging to yourself.  When you invade their personal space you are creating a feeling of unrest or even fear.
  7. Non-response. It’s important to give clues that you are listening to the other party.  A nod or an indication that you are listening is vitally important.
  8. Making excuses with the word “but. When you make excuses, you are showing that you aren’t in control, but when you use the word “but”, you are outwardly acknowledging that you aren’t in agreement.
  9. Closed body language and crossed arms. When you fold your arms or cross them, you are showing that you are in a defensive posture and are not readily agreeable.
  10. Frowny face. When you have a frown or a negative expression, it shows that you come across as intimidating or hostile.

Positive body language is the key to successful real estate negotiations and subsequent real estate purchases.  When you learn how to manage your body language, you will be able to demonstrate trust and confidence to others, key factors in all great real estate transactions.  In every real estate deal, you will want to exude credibility and confidence, and the key to achieving these goals is to learn how to use your entire body as a communication tool.

As you learn to apply these positive body language factors, you will demonstrate that you have the interests of the other party paramount in your mind.  This will ensure that you open the door to Win/Win deals.

10 Most Import Items to Upgrade on Your Home

If you have a home that you are considering fixing up so you can sell it for the best price but you don’t have a fortune to spend on upgrades, focus on the following 10 items to make the biggest impression on potential buyers:

  • New Front Door: It is always important to make a good first impression and the front door is the first thing people see when they come up to a house. Replace an old, plain slab door with a new raised panel with a window in it.  Paint it a color that complements the house but also adds a little character and stands out.
  • Tile Foyer Entry: The next item buyers see when they enter your home is the entry, so make it look like an entry by laying some tile or hardwood in the space allotted.  If you walk into a house that is carpeted right up to the front door, the entry disappears into the living room and doesn’t look as classy.
  • New or Improved Doors: Another inexpensive replacement that can make a big difference is replacing the interior doors.  If your doors are plain, flat slab doors, upgrade them to raised panel doors.  Purchase a whole new pre-hung door, jamb and casing to replace the old ones.  They will come pre-primed so they can be easily painted.  Be sure to pick a color that offsets the walls for a two-toned look.
  • New Door Handles: Along with your new doors, jamb and casing you should replace the hinges and door handles with a nickel satin finish to match today’s modern look.  You can buy inexpensive handles for about $12 each and make a big impression.
  • New Electrical Switch Plates: Other items that are overlooked include electric wall switch plates.  A lot of people will freshly paint their place but leave the old, worn-looking electric cover plates on or even paint over them, which is worse.  Spend 35 cents each and replace the cover plates throughout the house.
  • Paint/Replace Trim: Painting the house will make one of the biggest best impressions of all, but if your walls look pretty good already and you are on a budget, consider just painting the doors and trim.  You can pick a color that offsets the wall color, like white when the walls are grey or beige.  This will create a two-tone look which is much more appealing than everything painted the same color.
  • Paint Kitchen Cabinets: Replacing the kitchen cabinets is nice but also one of the most expensive rehabbing items you could do, so if you are limited on funds, consider simply painting the cabinets.  Since today’s popular look is white cabinets, you can paint over any cabinet finish with semi-gloss white and make your cabinets look new.
  • New Shower Curtains: Another easy, inexpensive upgrade is to replace your shower curtains with new, decorative curtains that match the colors of the home.
  • Add Window Shutters: You can also add window shutters to cover up old windows and avoid spending the money to replace them.
  • Add a Nice Mailbox:  Lastly, you can help your house stand out from the crowd by replacing the mailbox with a new one that has a little more character than every other mailbox on the street. You can also paint the old one to stand out and tie the color in with your new front door for some added street appeal.

Workshop Update | Week 22 – May 30–June 2

This week, Response delivered 16 Real Estate and Stock workshops. Our overall customer experience score, for all surveys received, was a 5 out of 5. We saw over 908 students. Here is what some students shared about their experience:

“The speaker was passionate and the mentor answered all of my questions.” —Serrano P.

“Phenomenal!” —Marc C.

“I had such a great time.”—Salvador M.

3 Ways Entrepreneurs Can Use Crowdfunding

Whether you’re just starting a business plan or you’re already coming up with new ideas to grow your business, financial instability may always be a struggle. It’s not every day that you get support from people around you, especially if money is involved. Great ideas can go unheard or unfulfilled for many reasons, which is why you many need to look for other sources for your funds. Some businesses look for investors to sit on their board of directors and invest in their company, some look into banks or lenders to acquire a loan for their funding, and others look into crowdfunding.

Crowdfunding is the process of sharing your business/project ideas to the public with the goal of getting some support. You discuss your idea with people who could possibly be interested and willing to give small dollar contributions. The more people you get to believe in your project, the more support you get and the larger amount of money you raise.

This can be done in various ways. One of which is through rewards. You market your business idea online and offer rewards to your backers in return. The rewards can come in various shapes and sizes. They can include a personalized gift, a certificate, or any material memorabilia. Or, they can also come in the form of discount coupons, bragging rights, and such.

Crowdfunding can also be done based on equity. It’s quite similar to investments but it has a unique set of rules and terms. Backers can be offered equity stake in your business in exchange for the amount that they will give to your business as support. And, like many other investors, they would expect this investment to grow over time with the business. Or, it can be lending-based where backers lend the funds to put your business ideas into fulfillment but they expect the exact amount of the investment in return after a certain period of time.

These are only some of many ways crowdfunding can be practiced to help you collect funding for your business ideas. As long as your ideas are worthy and feasible, you’ll never lose support.

Understanding the Pre-foreclosure Market

The pre-foreclosure market has a phenomenal potential for profit. This can be particularly true for people with very limited funds. Yes, you will have to learn a lot and apply what you have learned. Not a lot of people understand the market, so most areas have a very limited number of skilled competitors. Just purchasing a pre-foreclosure property is not understanding the market. Understanding the market is knowing what to buy and how to buy it right.

The first and perhaps most important key is to find people who don’t want the home. Perhaps they are going through a divorce or a financial crisis. The second critical key is to learn how to focus on pre-foreclosures that have substantial equity. To make the big money you will want to purchase the property “subject to the existing mortgage.” Basically, either the property has equity, or it does not. mortgages that are more than the value of the property can be purchased via a “Short Sale.”

The strategy to close pre-foreclosure deals is quite different where there is positive equity than where there is negative equity:

If the home has negative equity…

You will need to get the banks permission to accept your offer. You will also need cooperation from the current owner of the property. In other words, both the current owner and the bank must agree “in writing” to sell this home to you at a price below what is owed on the mortgage. The current owner will need to sign paperwork agreeing that they still owe the difference to the bank. Obviously, this can be scary to the current owner. Historically, banks have just written these debts off. However, they could go after the current owner at some point throughout their lifetime.

Banks don’t enjoy losing money. Banks only agree to do so when other options appear to be worse. In recent years the banks have speeded up the process of what is called a “Sort Sale.” The name means selling a mortgage “Short” of what is owed on it. Someone in the bank needs to sign off on the deal. Generally, Bankers are reluctant to sign off on a money losing deal because they are looked on as the one who lost money for the bank. Even today closing a short sale doesn’t lend itself to an easily duplicatable process. Hence, every deal stands on its own.

Nonetheless, if you are dealing with a smaller Regional Bank where you have access to the decision maker and or you are dealing with a cooperative “current owner,” you will want to move forward with passion! One last positive point about many Short Sales. Because, the process often takes over three months banks are not that concerned with deposits. They often ask only for a small deposit or don’t really monitor deposits closely. Hence, you may only need to get the funds or a buyer with the funds when the deal closes. There is one way to increase your Short Sale Opportunities and we will cover that next.

If the home has positive equity…

Once you understand the pre-foreclosure market you will want to look for, market to, and or try to find these “cash cow” opportunities. Nonetheless, you are likely to run into deals where there is negative equity. A wonderful thing about purchasing pre-foreclosure direct from the current owner is that you don’t need the banks permission. You don’t want to offend them, but you can close these deals without getting banks to sign anything.

However, you will want the current owner to sign the appropriate paperwork and those things will want to be witnessed and notarized. But, that’s just paperwork. Finding a home with positive equity can allow you to fund your actions with the equity itself. Understanding the pre-foreclosure market means knowing where and how to find the money you will need to close these deals. We will cover these in copious detail in our next installment entitled “Conquering the Pre-foreclosure Market.”

If you market effectively for pre-foreclosure, you will also get some opportunities for Short Sales.

The most critical thing to understand about the pre-foreclosure market is how to know a good deal when you see one. Most of that is just a math problem once you get past the people part. Further, much of the people part is a math problem also. So, let’s start there. Even a modest marketing effort will have you working with people who have received a “NOD (Notice of Default) letter.” Of those 60% will resolve their issue without losing their home. Some of those could have resolved their issue with money they received from you or your sources. You can make a healthy profit right here while you build a compelling future kingdom.

You are looking for two kinds of people. Anyone who has equity, more equity is better, and wants to save their home but is getting turned down with every effort from the traditional lenders, is an ideal candidate to borrow money from you and your sources. Also, anyone who has equity but “doesn’t want” the home is a candidate for you to make money.

If you really understand the pre-foreclosure market, you will know that it is worth learning and understanding due to the large profits you can make. Further, you will be of service to those in need.

Workshop Update | Week 21 – May 23–May 26

This week, Response delivered 13 Real Estate and Stock workshops. Our overall customer experience score, for all surveys received, was a 5 out of 5. We saw over 462 students. Here is what some students shared about their experience:

“Pleasurable and informative.” —Archie E.

“Very pleased with all the knowledge and information provided.” —Mariaelena A.

“Great training! So glad to be a part of Response.”—Gerardo A.

Workshop Update | Week 20 – May 16–May 19

This week, Response delivered 14 Real Estate and Stock workshops. Our overall customer experience score, for all surveys received, was a 5 out of 5. We saw over 806 students. Here is what some students shared about their experience:

“I would highly recommend it to anyone.” —Nathan H.

“Overall great!” —Jose B.

“Training was valuable.”—Kasuma G.

Should You Sell Your Home Yourself?

The real estate industry can be very risky. Every move you make should be well-thought of. Whether you’re a buyer or a seller, you’ll always have a list of things to consider. Just like when you plan to sell your property, one thing to consider is when you should or shouldn’t hire a real estate agent to assist you. And, it’s going to be a tough call.

Selling your home without an agent sounds both good and bad. It may be good in some ways because you will be able to save thousands of dollars by not paying the agent’s fee, you’ll be able to do the selling exactly your way, and you’ll have complete control over everything from planning to closing. On the other hand, not having an agent that is knowledgeable in business and in real estate can hinder your real estate career and cause you to waste money in the long run.

Going solo in the selling process can make you ask these questions:

  1. Has the real value of your home been determined? It’s hard to do it yourself, especially if it’s your first time and you’re unaware of how to price a house. This may lead you to either overprice or underprice your property, and you may eventually end up with little to no income in return.
  2. Are you willing to add to your workload just to take care of this? You might already have a lot of things going on and putting this task on your shoulders might add another burden.
  3. Also, during showings or visits, are you willing to entertain potential buyers and screen them yourself? This may sound like an easy thing to do but it’s not. You’ll have to be very careful and observant so you can identify which buyers are good and have high potential.

Before coming up with a decision, you should weigh the pros and cons. Do not rush to conclusions. Do research and seek understanding before taking an action.

Rehab or Rental: What insurance coverages do I really need?

Congratulations on deciding to invest in real estate! Whether you are going to rehab and sell a property or keep it to add to your portfolio as a rental, you will want to make sure you are covered in the event of future liabilities.

As a real estate investor you want to protect your profit and your assets from the moment you acquire your property until the day you close and pass it along to someone else.

Let’s take a look at the timeline of a rehab property:
– Identify the target property
– Due diligence
– Call your insurer about the property
– Offer is accepted
– Close on the property
– Get all permits required
– Begin rehab, work with contractors
– Complete work
– Sell or find tennet

I hope that seeing “call your insurance agent” before “offer is accepted” was not a shock or surprise. You might have heard other investors talk about builder’s risk, a vacant home policy, a homeowners policy and a dwelling policy, but which one do you need?

A standard homeowners policy should cover the following; Coverage for the dwelling (your main house) and attached structures (such as a garage), contents of the home, loss of use for a hotel if you are unable to return to your home, personal liability and medical expense.

A dwelling policy is custom-built on what liabilities you need to cover, adding coverage for building materials and covering no occupancy while no work is going on.

Depending on the type of rehab needed, your agent will need to consider multiple policies.
If it is a cosmetic rehab, including kitchen and bathroom, you can get a policy that will cover home vacancy until the rehab is done and sold. If you are moving walls and dealing with structural issues, you may need a commercial carrier as that is closer to a builder’s risk policy.

Let your agent know how many homes a year you are planning on doing. Some have policies that will cover multiple homes. Most policies are on a per home basis, so ask your agent about what discounts or coverages you need to add. Water damage is always good to add to a policy in case there is flooding or damage from the city line if it backs up in your home.

Communicate with your agent to make sure you understand your coverage and how to make the process simpler and smoother for the next property you work on.

Now, if you are thinking of holding the property and becoming a landlord, you have different liabilities to consider:
– Standard homeowner policies will not cover a rental. In fact, they could deny some coverages if you are renting the property.
– Fire policies will need to be updated to cover any appliances or furnishing you have provided for the rental property.
– When protecting your rental income from loss and minimizing unnecessary expenses, make sure you are not paying to much for insurance.
– Replacement Cost or Cash Value Insurance: make sure you understand the out-of-pocket expenses for both as you move forward.
– Look into liability insurance in case harm or damage happens on your property to a guest or by the tennet.

Your agent will talk with you about dwelling policies. Typically you have DP-1, Dp-2, and DP-3.
– DP-1 is a basic policy covering fire and vandalism.
– DP-2 is broader adding wind, fire, hail and even collison if a car hits the property.
– DP-3 is a special form or open policy. Unless a peril is specifically excluded, it is covered.

Talk with your agent and figure out the best way to move forward with coverage on your property. Requiring your renter to have their own rental policy should be a hard rule that is always in place.

This article was intended to help you be aware of what to expect, not scare you from investing. When done right, having investment properties is a great way to build up income and assets for your future.

Workshop Update | Week 19 – May 9–May 11

This week, Response delivered 15 Real Estate and Stock workshops. Our overall customer experience score, for all surveys received, was a 5 out of 5. We saw over 544 students. Here is what some students shared about their experience:

“Mind blown.” —Paul N.

“Loved every second!” —Mariela M.

“Great teaching.”—Zalo D.

Workshop Update | Week 18 – May 2–May 5

This week, Response delivered 13 Real Estate and Stock workshops. Our overall customer experience score, for all surveys received, was a 5 out of 5. We saw over 630 students. Here is what some students shared about their experience:

“Blew me out of the water!” —Vanessa A.

“Fantastic opportunity!” —Keitha C.

“Tons of valuable information.”—Brian L.

How to Recognize and Avoid 8 Real Estate Financing Mistakes

Real estate investing may seem like it’s either easy or hard, and both may be correct. The secret oftentimes is dependent upon how the investor manages his or her Real Estate financing.  Nothing can be more discouraging than to structure a great real estate investment and then have everything come apart because of financial pressures that could have been avoided.

Possibly the problem occurs because of how the investor structured the purchase and financing, or maybe it’s because of outside personal financial pressures. Regardless of the cause, the problem is real and should be avoided.

Avoiding the financial problem in the first place is by far the best course of action, but unfortunately, that doesn’t always take place.  Recognizing the problem or mistake is only the diagnosis, but now you must take corrective action.  It’ going to be a process that can take both time and effort.  Once you recognize the mistakes, you can take action to avoid these problems altogether.

Mistake #1 – Not Obtaining Accurate and Complete Information on Past, Present and Future Expenses

You can’t expect to achieve success in real estate investing if you do not have accurate records of past expenses involving the property.  This includes all expenses related to the property itself including utilities, taxes, and especially repairs.  If the appliances pertaining to the property have been repaired in the past, you want to know when the repair occurred and what the actual expenses were.

It’s entirely possible that you will need to repair or replace the same items again.  You also want to know if there is any warranty on the work performed.  Failure to get this information forces you to become responsible for additional unexpected repairs.

One of the primary reasons for having a complete inspection report on the property prior to closing is so that you can understand and project upcoming expenses.  You must be prepared financially for repairs and maintenance to the property.  When you aren’t financially prepared for large upcoming expenses, you put yourself in jeopardy of losing the property.

If you are purchasing a rental property, you want to have a complete history of not only the revenue received but of all expenses associated with the property.  In essence, you are purchasing the new rental business.

Mistake #2 – Accepting Poor Owner Financing

Owner financing involves the seller financing the sale of the property to a buyer and can allow the buyer to achieve financing without normal banking approval.  With a traditional mortgage, you borrow money from a bank to pay for the property.

Then, you make payments back to the bank to pay off the loan. With owner financing, you make arrangements to pay the owner in installments, typically of principal and interest, until you’ve paid off the purchase price of the property.

Owner financing can be a valid and profitable way to purchase real estate, but you must ensure that you are not going to assume unwanted problems.  If at all possible, you should attempt to certify that the property is free and clear of Mortgages.

If this is not the case, you could be in jeopardy if the owner doesn’t make payments on the underlying mortgage.  You can solve this if you escrow a portion of your payment to go for payment to the underlying mortgage.

If the owner has legal or financial issues, the property is still in potential legal jeopardy and could be foreclosed on.  If the property is free and clear, you can get a title policy and have the owner actually take a first mortgage against the property and act just like a bank.  In this way, the property is transferred by title to you and is no longer in the name of the seller.

If you elect to pursue owner financing, make sure that you are protected in the case of the seller not paying any underlying mortgage.

Mistake #3 – Taking a Hard Money Loan with Unreasonable Terms

Hard money loans are loans made almost entirely based on the value of the property without regard to the creditworthiness of the borrower.  These loans are normally bridge or short-term loans and come with higher payments and interest rates than traditional loans.

The lenders are generally private individuals or entities and they are relying primarily on the value of the property if it were to be sold to pay the loan. These hard money loans have a lower loan to value ration than traditional loans and they generally have a loan period of one to three years.

Most of these loans are used when the property is going to be fixed up and resold.  Because the interest rate and payments are higher, along with a short-term payment period, you may be subject to an increased risk of foreclosure if your real estate business doesn’t go as planned.

If you elect to pursue a hard money loan, make sure that you are getting a loan with terms that are reasonable for your real estate business.  Don’t be caught unaware when the loan or payments come due and you don’t have means to make the payments.

Mistake #4 – Assuming Existing Loan with Underlying Problems

Not all real estate loans are the same, and when you assume a loan obtained by a previous borrower, in your case the seller, you will be subject to the terms of that loan.  Maybe the existing loan has restrictions or payments that don’t meet with your real estate business plan.

Take for example a loan with a balloon payment due in a short period of time.  An unexpected balloon payment could destroy your real estate investment.  If you were not projecting the large balloon payment, it could literally put your real estate investment into foreclosure.

Many real estate investors enter into adjustable rate mortgages that have increased interest rates.  As the interest rate goes up, your profits are going to go down.  Don’t be caught unaware of the potential increase in payment, nor on the potential for a requirement that the loan is paid off entirely in a short period of time.  This could occur in a matter of a few short years or even months.

Mistake #5 – Ignoring Potential Legal Problems

As a real estate investor, you should be cognizant of all potential legal problems involved with your real estate endeavor.  This includes not only your personal actions but the actions of other people who may be involved with your property.  Take for example an owner who is being sued personally from past tenants or even individuals who worked on the property.  If the previous owner had work done on the property and did not pay the person doing the work, there is a potential for a special kind of lien to be levied against the property.

These liens are called mechanic liens and are best described as a security interest in the title property for the benefit of those who have supplied labor or materials that improve the property.

Your seller may be facing legal problems of a personal nature, and if the seller is unsuccessful in such circumstances, the property could be subject to potential liens.  Make sure that you acquire the property in such a way that you get a title policy on the property that ensures that all seller legal issues are resolved.

There are also potential legal problems between yourself as a landlord and the tenants in any rental property.  It is highly recommended that you secure an umbrella insurance policy to protect yourself against such occurrences.

Mistake #6 – Not Vetting Existing Tenants

A major financial mistake that plagues real estate investors who acquire rental properties is having non-paying tenants.  There is no guaranteed that you can always secure great tenants, but you can do several things to improve your tenant payments.  When you purchase a property, ask for all rental records for each tenant.  If you have one or more existing tenants who have shown that they don’t always pay their rent on time, you need to make sure you correct this situation.

Perhaps you can get them to agree to use an auto payment program in return for not raising the rent.  Whatever incentive you come up with, you need to do all in your power to increase your success in collecting rent.

SEE ARTICLE: (Link to article written by Gary Cochran “Follow a 7 Step No-Fail Checklist When Purchasing Your 1st Rental Property”)

When you become a landlord, you are automatically assuming the role of rent collector.  It is critical that you establish strict payment policies with both old and new tenants.  If you have already identified a potential problem through existing financial records, try to replace bad tenants with good new ones.  If it’s not possible to do this, it might be best for you to pass on this specific rental property.

Mistake #7 – Purchasing Property with Excessive Leverage

When you purchase property with borrowed money, you are using leverage to potentially increase your return on the real estate purchase.  If you purchase a property with a one hundred percent (100%) leverage, you are borrowing the full purchase price of the property.  When you have excessively high leverage in real estate, you put yourself at risk of potentially losing the property through foreclosure if things don’t work out exactly as planned.  If you are in such a situation and expenses become larger and rents don’t come in as planned, you could be in danger of not having enough money to meet mortgage payments.

Most traditional lenders have found that if the borrower has at least a 20% down payment, they are in a much better position to have the borrower make payments.  It has been proven that excess leverage in real estate leads to much greater risk.

Mistake #8 – Excessive Personal Debt

Most financial mistakes can be overcome if the borrower or real estate entrepreneur has sufficient capital to meet future expenses.  If you are a new, or even experienced, real estate investor and you have a very high debt load, you are already in a position of risk.  The higher your personal debt, the higher your risk.  When you have excessive debt, you automatically are in the position of having to pay out more and more of your income.

In many cases you may feel it necessary to draw too much on the income coming from your real estate investments.  This puts those investments at risk.  It is recommended that you reduce your personal debt as much as possible when entering into real estate.

Financial mistakes in real estate investing are far too common.  Sadly, most of these problems can be avoided if we take the time and make the effort to follow proven solutions.

Some Additional helpful information

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Workshop Update | Week 17 – Apr 25–Apr 28

This week, Response delivered 15 Real Estate and Stock workshops. Our overall customer experience score, for all surveys received, was a 5 out of 5. We saw over 729 students. Here is what some students shared about their experience:

“Great experience!” —Robert G.

“Very nice.” —Marva D.

“This three day workshop was more than I expected!”—Emmanuel V.

3 Ways Entrepreneurs Can Use Crowdfunding

Whether you’re just starting a business plan or you’re already coming up with new ideas to grow your business, financial instability may always be a struggle. It’s not every day that you get support from people around you, especially if money is involved. Great ideas can go unheard or unfulfilled for many reasons, which is why you many need to look for other sources for your funds. Some businesses look for investors to sit on their board of directors and invest in their company, some look into banks or lenders to acquire a loan for their funding, and others look into crowdfunding.

Crowdfunding is the process of sharing your business/project ideas to the public with the goal of getting some support. You discuss your idea with people who could possibly be interested and willing to give small dollar contributions. The more people you get to believe in your project, the more support you get and the larger amount of money you raise.

This can be done in various ways. One of which is through rewards. You market your business idea online and offer rewards to your backers in return. The rewards can come in various shapes and sizes. They can include a personalized gift, a certificate, or any material memorabilia. Or, they can also come in the form of discount coupons, bragging rights, and such.

Crowdfunding can also be done based on equity. It’s quite similar to investments but it has a unique set of rules and terms. Backers can be offered equity stake in your business in exchange for the amount that they will give to your business as support. And, like many other investors, they would expect this investment to grow over time with the business. Or, it can be lending-based where backers lend the funds to put your business ideas into fulfillment but they expect the exact amount of the investment in return after a certain period of time.

These are only some of many ways crowdfunding can be practiced to help you collect funding for your business ideas. As long as your ideas are worthy and feasible, you’ll never lose support.

Creative Ways of Financing Your Business Project

Creative Ways of Financing Your Business Project

Getting a business off the ground costs approximately $2,000 up to $5,000 for home franchises and $3,000 for micro-businesses, according to Business News Daily. True to the words of Sol Luckman, “It takes money to make money.” The sad reality is that despite having brilliant billion-dollar business ideas and all the data in your favor, sourcing finance to start or finish projects can be quite taxing, especially for emerging entrepreneurs with little-to-no credibility. For this reason, budding entrepreneurs should take a minute to understand the changes in business funding over the last decade and come up with creative ways of securing the money bags for their business projects.

Social Media Marketing

In a world where people look to social media platforms like Facebook, Instagram, Snapchat, and Twitter for advice on how to eat, drink, live, dress and act, social media marketing can be instrumental in securing funding for business projects. How so? Well, for starters, marketing on social media platforms enable you to reach investors from the large pool of 2.77 billion Internet users in the world. Advancing your business via social media can also be done through influencer marketing. This is where you pay or partner with an influencer who has a huge following to post about your products or services and why people should invest in or buy them.

Going live and posting videos on your social media feeds is another way to help secure funding. Doing so creates awareness about your project, grows a fan base and promotes brand loyalty thanks to the fact that visual content is shared 40 times more than written or audio content. This fan base could help support you financially. Additionally, once investors see a huge number of people like and re-share your content, they will be more than eager to finance your project.

Participating In Saving Challenges

Saving is one of the best ways to create a fund pool for starting, expanding or finishing any business project. This is because it comes with zero baggage, seizure threats or debt.  Participating in any of the many saving challenges on the Internet is a fast, guaranteed way to source finances for your business idea over a defined period of time, say 52 weeks. These challenges state the time duration and the amount of money you will raise over the stated time. It is then up to you to find ways to source the money to deposit weekly, biweekly or monthly depending on the challenge. This could be through formal employment, side hustles or hiring out one’s talents and skills.

Approaching Angel Investors

Getting access to a good investor in this Internet age has become simpler. Getting them to invest in your project, therein lies the rub, as they are bombarded with constant requests. Social proof, a well-planned out business strategy, and specific objectives on how you’ll get your project finished are things that will give you an edge over all other applicants. Additionally, you want to look for an angel investor in your field. Having an angel investor who has succeeded in the same field as yours means they are in a position to connect you with all the power players in the field from suppliers to manufacturers and authority contacts. They also have invaluable insights on what might or might not work and you will, therefore, have your work cut out for you. Often your Angel Investors can be web based business and have an understanding of hands off investments.

Sometimes, traditional methods of sourcing funds like bank loans, peer-to-peer lending, venture capital, grants and crowdfunding fail. During such times, think of out-of-the-box ideas to generate the money needed to complete your project. Social media, angel investors and saving challenges are a great place to start.

Money Saving Home Repairs You Can Learn To DIY

Money Saving Home Repairs You Can Learn To DIY

Home repairs can get costly, especially with the national average cost of hiring a plumber coming in at $299 and the cost of hiring an electrician at $322. While these might not seem like outrageously high numbers, they can add up over the year when you factor in how many home repairs you typically need. However, there are solutions to these financial woes, and they lie in learning how to simply fix things yourself. Sometimes, the path to financial freedom includes learning how to take cost-effective detours in the form of DIYing what you can.

Easy Plumbing Repairs

When your toilet is clogged, it can be easy to want to call a plumber and pay the fee in order to avoid having to deal with it yourself. However, there are many easy fixes to plumbing problems. To repair a leaking toilet, for example, simply loosen the bolts located at the base, remove the toilet from the base and clean up any debris around the drain hole. To DIY a clogged toilet, you’ll need to put a cup of baking soda into the bowl and let it sink to the bottom. If it needs a little extra help, you can boil water and throw that into the mix. Add two cups of vinegar slowly and watch it unclog whatever is causing the buildup.

Replacing Kitchen Appliances 

It’s actually not that hard to replace various kitchen fixtures such as a faucet or parts of a refrigerator. You’ll want to begin by identifying the route of the problem. In most cases visible rust, leaking water, or reduced water pressure are signs of a problem and will lead you to the root cause. Once you’ve figured that out, you’ll want to remove the faucet or similar appliance and simply follow the instructions included in your new one. Nerd Wallet released reports stating that 31% of homeowners don’t have money set aside for these types of repairs, so by DIYing them yourself you can not only help save on unnecessary spending but also put that money back into your savings.

Remodel Areas of Your Home

44% of Americans who are homeowners said their first unexpected home repair or remodel occurred within the first year of ownership. This is why it’s a great idea to really learn how to DIY these tasks in order to save money while increasing your investment in the house as an asset. While some tasks are better left to professionals, remodels such as installing hardwood floors, resurfacing cabinets and updating the interior paint can all easily be done without any experience.

Taking on Electric Repairs

While it might seem like a daunting task, repairing something electrical can be as simple as knowing where to connect the wires. To replace a light switch, for example, requires you to simply choose the fixture you want. Then, once you’ve got it, you’ll want to turn off the power to your home, remove the existing light switch and pull it out away from the wires, disconnect the panel and then replace it with the new one. Now, take the money you’ve saved and add it to your savings account or some sort of financial fund. Use this money to invest in high-quality repairs and renovations down the road that can increase your home’s value.

The Joy of Saving and Learning 

If you’re constantly calling someone else to fix everything, you’ll not only drain your resources fast, but you’ll miss out on the opportunity to learn how to gain practical skills and feel a sense of accomplishment. Learning how to DIY home repairs is a great way to gain skills without tapping into your savings, and that’s a smart financial move you can apply to any area of your life.

Workshop Update | Week 16 – Apr 18–Apr 20

Workshop Update | Week 16 – Apr 18–Apr 20

This week, Response delivered 11 Real Estate and Stock workshops. Our overall customer experience score, for all surveys received, was a 5 out of 5. We saw over 682 students. Here is what some students shared about their experience:

“Received a lot of important information for my personal use as well as professional.” —Rosa L.

“The instruction on real estate was more than I hoped for.” —Lacy S.

“This event fully exceeded my expectations and blew my mind!”—Ryan D.

Workshop Update | Week 15 – Apr 11–Apr 14

Workshop Update | Week 15 – Apr 11–Apr 14

This week, Response delivered 15 Real Estate and Stock workshops. Our overall customer experience score, for all surveys received, was a 5 out of 5. We saw over 563 students. Here is what some students shared about their experience:

“I just love, love, love the knowledge that I gained from this workshop.” —Juliette S.

Great class. Thank you!” —Mary R.

“Awesome!”—Alex P.

The Baby Boomer’s Guide to Spending Time and Saving Money

The Baby Boomer’s Guide to Spending Time and Saving Money

We’ve always been told to save for retirement. “Start early,” they say. “Don’t waste money on frivolous things,” they say. Our existence seems to consist of working every day to live, only so we can retire one day with the money that we saved over the years. But at what expense is all of this to our quality of life? Why work simply to live without enjoying the life we’ve worked to achieve? Baby boomers, we’re talking to you. You’ve worked hard and earned your retirement; it’s not too late to start living it up. It really is possible to be frugal without giving up all the fun.

How You Save Your Money

Medicare

Prioritizing is a part of life; so, before enjoying the fruits of your labor, assess your responsibilities first. Housing, food, and healthcare are at the top of the list when it comes to seniors. Since maintaining one’s health is especially important during your golden years, look into Medicare coverage if you haven’t already. Online resources can help with enrollment and choosing Medicare Advantage Plans, which offer supplemental Medicare coverage for vision, dental, and prescriptions.

Long-Term Care

Another cost to consider is Long-Term Care (LTC). Long-term care insurance helps pay for personal or medical assistance when you’re unable to care for yourself. Assisted living and nursing homes fall under the realm of LTC. Not all baby boomers have the financial means to pay for these services out-of-pocket, so this is where LTC insurance comes into play. While you’re still healthy, you can prepare for your needs later by purchasing a long-term care policy. To compare prices and coverage, search online for LTCI companies on review sites like Consumers Advocate.

Life Insurance

The purpose of life insurance is to make sure your loved ones are financially taken care of after your passing. It’s there to replace the income you once provided, especially if you were the breadwinner. It’s also there to help cover funeral arrangements so your family doesn’t have to pay for it.

Some families benefit greatly from life insurance, but not everyone requires it. If your family has the means to financially support themselves without your life insurance benefits or if you don’t have to pay estate taxes, then there’s no reason to take out the extra cost. Adult children who are independent probably won’t need your life insurance benefits, nor will a spouse who has enough income or assets to be self-sufficient in the event of your passing.

How You Spend Your Life

Once you’ve covered the necessities, you can find discretionary ways to fit a quality lifestyle into your budget. Life doesn’t have to be put on hold just because you’re trying to be frugal, but there needs to be a balance between saving your money and spending it. You can have a life without sacrificing your savings by trying some of these tips:

  • Minimize your entertainment expenses by cutting your cable and replacing it with alternative streaming services like Netflix or Hulu. You’ll still be able to watch your favorite television programs without having to pay for the channels you don’t need.
  • Take a road trip instead of a pricey vacation or a cruise. Driving cuts down on costs and allows you to see more of the scenery you normally miss out on when you fly.
  • Take advantage of senior discounts at restaurants, retail stores, and travel services.
  • Host potluck dinners at home. Be social with friends without having to spend money on going out to eat and drink. Or, if you do go out, split a meal with your spouse and bring your own wine.
  • When it comes to entertainment, look for ways to buy discounted event tickets or opt for community theater or musical performances.

Ask yourself this: What’s the point of saving all of your money just so you can use it to survive? Without a healthy balance between saving and spending, you’ll slowly see the days pass by…and one day you might regret not doing the things that you wanted to do. If you’re not living life to the fullest, then what are you living for?

Shout out from Matt Walton, here in Lindon, for another great Real Estate Deal Lab!

Shout out from Matt Walton, here in Lindon, for another great Real Estate Deal Lab!

Shout out from Matt Walton, here in Lindon, for another great Real Estate Deal Lab!

Your Key to the Future – Becoming Part of the Response Team

Your Key to the Future – Becoming Part of the Response Team

You may have been told from an early age that your future is up to you, and yes, that is true.  But the future can be an even brighter place when you learn the importance of teamwork and how Response provides keys for success.  Let’s start by focusing on two entities.  The first entity is you.  You are the captain of your own destiny.  The other entity is your backup team, and that is where Response can play such an important role.

To understand the importance of the relationship between yourself and Response, consider the account of Charles Plumb, a United States fighter pilot in Vietnam.  He had completed 75 combat missions by the time he was shot down.  Plumb ejected and parachuted into enemy hands, where he spent six years in a Vietnamese prison.  After being released years later, a man come up to him and said, “You’re Plumb! You flew jet fighters in Vietnam from the aircraft carrier Kitty Hawk.  You were shot down!”

Plumb was confused and asked how the man knew about that and the man replied, “I packed your parachute.”  Then he continued, “I guess it worked.”  Plumb assured him it had and said, “If your chute hadn’t worked, I wouldn’t be here today.”

Plumb thought a lot about the man who held the fate of someone he did not even know in his hands.  He kept pondering how many times he might have seen the guy and not even said anything because he was a fighter pilot and the stranger was a sailor.

In today’s real estate investment world, you are the pilot, but you have people you may not know who are supporting you and insuring that you have the ability to succeed.  They are in essence packing your parachute and they are the members of your Response Team.

Ask yourself why this teamwork is so important.  Andrew Carnegie was responsible for a major change in the industrial world of today.  He pointed out the reason why teamwork in business is such an important ingredient when he said, “Teamwork is the ability to work together toward a common vision, the ability to direct individual accomplishments toward organizational objectives.  It is the fuel that allows common people to attain uncommon results.”  A great team doesn’t happen by coincidence.  Instead, a well-functioning team requires work from all team members as well as open communication and a clear vision toward an achievable result.

In real estate this teamwork concept is extremely important for both short and long-term positive results.  There are five important reasons why teamwork with Response helps develop successful real estate entrepreneurs.

  1. It helps develop a single purpose. You truly are the driving force for your real estate success, but when you involve the Response team, you learn to focus on specific, achievable goals—and you have help!
  2. It helps develop multiple options. The Response Team backs you up with a complete library full of training, tools, and resources that allow you to choose multiple ways of achieving real estate success.
  3. It helps develop efficiency. There is no reason for you to learn from your mistakes alone.  The Response Team gives you the opportunity to learn from the mistakes and successes of others.  It is a way to shorten your path to success.
  4. It helps develop new learning opportunities. With the educational resources available to you as part of the Response Team, you can experience success in multiple ways.
  5. It helps develop overall success. This is your opportunity to become a successful real estate entrepreneur.

It’s critical that you involve Response and make your team as strong as possible.  As the leader of your team, you can insure that your personal team is as strong as possible by following five teamwork rules.

  • Focus on personal objectives. The Response Team is part of your team.  Your personal real estate objectives or goals are the overall objective.  Focus your efforts on those personal goals.
  • Visualize the role of both Response and yourself as equal participants. Don’t try and do everything yourself.  Take the time to see what you need to do and how Response can help you. Seeing it first in your mind will help insure that you succeed.
  • Open communication with Response. The Response Team is at your disposal.  Don’t be afraid to contact them when you have questions or need help.
  • Create achievable goals. The Response Team can help you achieve success, but you have to be clear what your goals are.  When you can describe those goals simply, then the other members of your team can help you achieve them.
  • Balance problems with successes. You will encounter problems and obstacles from time to time.  It is important to let your Response Team know what the problems are, but you should also let them know of your successes.

Here at Response, we firmly believe that real estate success can best be achieved with teamwork.  My goal, as the Director of Real Estate Education at Response, is to provide the tools and training necessary for real estate success.  Working together, we can unlock your future.

Workshop Update | Week 14 – Apr 4–Apr 7

Workshop Update | Week 14 – Apr 4–Apr 7

This week, Response delivered 12 Real Estate and Stock workshops. Our overall customer experience score, for all surveys received, was a 5 out of 5. We saw over 734 students. Here is what some students shared about their experience:

“Changed my mindset on so many levels.” —Dominique D.

Amazing!” —Esther B.

“Very educational.”—Katherine B.

6 Easy-to-Follow Steps that Can Stop Disappointment from Turning into Deathly Discouragement for the Beginning Real Estate Investor

6 Easy-to-Follow Steps that Can Stop Disappointment from Turning into Deathly Discouragement for the Beginning Real Estate Investor

When you first start any new activity, it is entirely possible that you will experience pitfalls, set backs and even disappointments.  This is almost inevitable for most new real estate investors as they attempt to duplicate the success of others.  However, long-term discouragement that can cripple your investment efforts need not be the final result of real estate expectations that don’t come to pass as planned.

The words “disappointment” and “discouragement” may sound alike, but that is certainly not the case.  Disappointment comes from unfulfilled or broken expectations and is generally a short-term effect.  Discouragement, on the other hand, happens when you can no longer see the light at the end of the tunnel or when you abandon hope.  As a new real estate investor, you are setting out on a path toward success, and success is a continual process.  As you progress towards your goals and objectives, you will encounter both small and large things that may disappoint you and possibly lead towards discouragement.  Our goal is to learn from these disappointments and avoid discouragement.

Let’s suppose that you have decided to go into the business of finding good properties that can be used as rentals.  You have read and studied about the requirements for such properties and decide to find your first rental property.  After reviewing advertisements and using your spare time to drive and survey the area in which you want to invest, you notice a For Sale sign on a property with the number of the listing agent.  You note down the number and make a call to see the property.  After meeting with the listing agent, you are convinced that this is “the right property.”  You have studied how to fill out an offer to purchase, but you elect to have the agent you met at the property help you fill out the offer.  As you are making the offer, the listing agent says there is another offer on the property and maybe you can outbid them.  Before long, you have gone through a couple of different counter offers and you were outbid.  You lost the property and are extremely disappointed, but should you be?

Ask yourself, “What went wrong?  What could you have done differently?”  Now is the time to become proactive and change those things you can control.  The real question is, “How do you change your attitude and what specific strategy can you take to ensure that a simple disappointment, like a rejected offer or a lost property, doesn’t lead to long-term discouragement that can bring death to your new real estate investing business?”  Let’s examine a simple strategy of six steps that can make all the difference in the world.

Step #1 – Identify What Went Wrong

This identification process contains three individual elements: review, describe, and record.  Unless you can identify exactly why something happened that lead to disappointment, you will never be able to make the changes necessary to stop disappointment from happening again and again.

  1. Review exactly what happened. Before you can understand how to solve any problem, you must know exactly what the problem is and how it happened.  As a new real estate investor, you must know what strategy you are following.  There is a difference in finding a property that works as a fix up property and one that might be ideal for a rental.  You must also be acutely aware of why the problem occurred.  Why were there multiple offers on the property?  Did you wait too long or did you fail to follow a proven strategy in locating the property?
  2. Describe in detail the problem that occurred. In our example of being outbid because of multiple offers, there were multiple reasons why you may have lost the property.  Let’s start by examining what happened when you first saw the property.  You immediately called the listing agent and made an appointment to see the property.  What’s wrong here?

The listing agent is not your friend and he or she certainly doesn’t represent you.  By law, the listing agent is representing the seller and will do all in his power to get the very highest price possible for the seller.  Because the agent is representing the other party in the transaction, you have no control in the negotiation process.  In effect you were bidding against yourself.  Finally, the price you might have paid for the property was probably too high.  If you are forced into paying more than the current market price for the property, you are already in a losing position.

As you are doing an analysis of why a problem occurred, make sure that you are realistic in that review.  Don’t hide behind sayings like, “It was not my fault.”  The truth of the matter is that it might have been your fault from the time you decided to look at the property.

Record your findings.  It’s true that we can learn from our mistakes, but unfortunately, we often hide or forget those mistakes.  When you actually write down what happened and why it took place, you have something you can refer to.  I like to call these mistakes “min failures.”  They are not major failures because you can correct them.  Dale Carnegie is recognized as a foremost authority on self-improvement.  He once said, “Develop success from failures.  Discouragement and failure are two of the stepping stones to success.”  There is real value in recording these mini failures.  You can use this record to create an ongoing learning experience because identification of a problem truly is the first step in this all-important strategy.

Step #2 – Describe Corrective Behavior

Understanding what went wrong is important, but if you can’t correct the mistake, it will surely happen again.  When it does, you are on the road to long-term discouragement.  Identifying the problem should allow you to come up with possible solutions to the specific problem.  These are the corrective steps you can take to get past the disappointment and avoid long-term discouragement.

Let’s go back to our earlier example of losing a property to a higher bid.  What corrective steps could you take if you were to start over again?  In essence that is what you are going to want to do – start over again and find another, and perhaps better property.  In your journal or record, open up your mind and explore all the different ideas.  First of all, you are going to want to ensure that you have an agent who is going to work for you and not for the seller of the property.  Second, did you spend enough time finding the right property?  What could you have done differently?  Take the time and try and come up with multiple ideas and explain why each one might have been a better solution.  Be specific and give the reasons behind the choices.

What you are doing is moving from a reactive situation to a proactive one.  Just by doing this, you will become more positive, but even more importantly, you will become more realistic.  Writing it down will help you remember what to do when the time comes.

Step #3 – Change Your Mindset

Simply by following the first two steps of this strategy, you are becoming a more positive person.  You are in effect starting to change your mindset.  When you adapt your thinking in a more positive manner, you are moving to a positive mindset.  When you have a positive mindset, you are able to control what happens around you.

The first thing you want to control is the environment in which you live.  Don’t become a negative person who wallows in self-defeating thoughts and actions.  If there is anything around you that influences you in a negative manner, you need to get rid of it.  That may mean that you need new friends and associates.  Negative thoughts feed on other negative thoughts.  Anything you can do to rid yourself of these negative influences will benefit you.  Willie Nelson, the country singer, once said, “Once you replace negative thoughts with positive ones, you’ll start having positive results.”  He may not have been the greatest philosopher, but he certainly had wisdom when he left that thought.

Once you start thinking in a positive manner, you will be able to see clearly in the fog of depression that often accompanies disappointment.  In a short period of time you will be able to have a positive mindset.  When this happens, you will begin to express the traits of a new positive mindset:

  • Optimism. You will have the willingness to make an effort in your real estate strategies and to take a chance instead of assuming your efforts will fail.
  • Acceptance. Soon you will acknowledge that everything doesn’t turn out exactly as you thought it might.  This allows you to step back and then move ahead in life and in your real estate strategies.
  • Resilience. You will have the ability to get back up when things in your real estate adventure seem to knock you down.  When you meet stumbling blocks, you will smile and realize that next time things will go better.
  • Gratitude. You will appreciate the opportunities you are given and be thankful for learning from them.

The important thing to remember when adopting this positive mindset is that you should never “go it alone.”  Loneliness is the enemy of a positive mindset.  The last thing you want to do when meeting a disappointment is to separate from the world and believe you are alone.  Find friends and associates who are willing to build you up and support you in those times of mini failures.  Consider working with other real estate entrepreneurs and possibly coaches and mentors.  If you have the opportunity to attend live training events with other real estate entrepreneurs like yourself, do so.  It is a great way to create friendships with positive minded people.  It is also an opportunity to learn real estate investment strategies from experts who have gone through similar disappointments.

Step #4 – Explore Your Options

Now that you have recorded your alternative options and begun to think in a more positive manner, you are ready to change outcomes.  It’s time to control what is going to happen in the future.  The old saying “If you get thrown from a horse, get up and get back on” is true in the field of real estate investing.  You may need help getting back on the horse, but the ride will be worth it.

Once again, you must be realistic in why your disappointment occurred.  As you come to grips with why you were disappointed, you may have the tendency to move toward discouragement with real estate.  This is a negative thought and should not be part of your new positive mindset.  However, if you find yourself in this situation, consider asking for help.  Start by using all available educational options that discuss and explain your specific real estate strategy.  If you were going to invest in rental properties, make sure you understand all you can about how to find, fund, and purchase the right properties.  Continue your studies to find out everything you can about landlord experiences.

If at all possible talk, to other investors like yourself.  Spend the effort to meet with professionals who can guide and mentor you.  Once you decide to engage a professional mentor or coach, make sure that they have both the experience and the knowledge to help you on your journey to success.

Now, go ahead and make concrete goals and objectives for moving ahead in your real estate adventure.  Be specific with timetables and exact objectives.  If you are going to engage a buyer’s agent, write down exactly how you are going to find the right agent in your area.  Whatever the task, write down how you will go about completing it.  Every option or goal should have a specific action step involved.  The very act of describing future behavior ensures that positive results can occur.

Step #5 – Focus Your Behavior Through Personal Action

Your initiative will create positive results.  It really is up to you to move the ball forward and to ensure that your real estate goals are achieved.  Up to this point, you have identified the problem and found corrective options, but now it’s time to actually make some changes.  It’s time to complete your goals through personal action.

There are specific reasons why direct personal action is crucial to your success when starting to invest in real estate.

  1. Action activates information. You can gain all the knowledge imaginable from multiple sources, but the knowledge will remain silent and without meaning until it is activated by action.  Only when you personally take action will the knowledge be changed into results.  Only through direct action can real estate knowledge come to life.  This is especially true when solving real estate investment disappointments.
  2. Action helps eliminate techniques that don’t work. Your time is valuable and you must be able to focus on things that work.  Trial and error is only valuable in real estate if you take action and do something.  Yes, there are times that things don’t work, but unless you take action and try, you will never know.
  3. Action create positive habits. The strategy of eliminating discouragement in real estate is a process and that process is based upon developing positive habits, and these habits can only be developed when action is involved.
  4. Action builds self-worth. As you accomplish anything in life, your confidence grows.  When investing in real estate, this new confidence helps you move forward, while at the same time it creates a value in your accomplishments.  Success is built upon action and personal real estate success is built upon personal action.

Step #6 – Understand the Past, But Always Move Forward

Disappointments should be the key to learning, not the foundation of failure.  You must be aware of exactly what went wrong, but once you determine the cause, don’t dwell on past outcomes.  Your goal is to live both in the present and to move toward the future, not to continue to worry about events in the past.  Now it’s time to focus on learning how to improve your real estate success by eliminating the causes of those setbacks.

Be specific about making changes.  It’s not enough to say “I’ll do it differently next time.”  Rather, you need to be able to say exactly HOW it will be different.  Recommit to taking positive action.  Make your goals realistic and then publish them and let others know what you are doing to change your life.  When you tell others about your future goals, this will give you the incentive to take positive action.  Perhaps even more importantly, you won’t want to disappoint your family and friends.

As you start to have success, reward yourself with each small achievement.  You’ve done the work, now it’s time to start collecting the rewards.  If you find a property below market value that fits your investment criteria, that is a success, even if you personally don’t purchase it.  Go ahead and treat yourself to something as it is a step in the right direction.  Even better, reward yourself by making an offer on the property (through your personal buyer’s agent).

Above all else, eliminate emotion from your investment decisions.  Never believe that you “must have” any property.  Such a belief will lead to more discouragement than anything else.  When emotion in real estate is eliminated from the equation, answers will always make more sense – and yes “CENTS.”

Don’t let disappointment turn into discouragement that can destroy your real estate future.  Try this strategy of six simple steps and eliminate discouragement from your investment outlook.  Real estate investing can become a vehicle for financial success but achieving that success will be a process.  When you learn from your disappointments and leave discouragement behind, that process can truly be the key to your future.

Workshop Update | Week 13 – Mar 30–Apr 1

Workshop Update | Week 13 – Mar 30–Apr 1

This week, Response delivered 13 Real Estate and Stock workshops. Our overall customer experience score, for all surveys received, was a 5 out of 5. We saw over 806 students. Here is what some students shared about their experience:

“Great class and instructors.” —Lyndzi M.

Great workshop!” —Beverly L.

“Everything about this workshop was educational.”—Arsema A.

VR Technology in Real Estate

VR Technology in Real Estate

Life has so much to offer. The splendor of it is just waiting to be discovered. One of the greatest splendors of today’s generation is the birth of technology.

Despite the unstoppable advancement we are achieving today, the demand for shelter is not changing. Real estate is one of the many industries that benefits from modernism. The methods people use to search for properties have already evolved. The discovery of Virtual Reality has really changed the game of today’s world. Having a grasp of the real world without needing to actually visit it is an experience that is becoming gradually widespread in the industry of real estate. It is an exceptional and groundbreaking process. The era of brochures is bound to end.

We cannot deny that buying properties can become really strenuous. But through applications that allow customers to have a 360-degree preview of spaces, the stress on the buyers end can be lessened. Everything can now be accessed easily: style and color selection, furniture placement, lighting options, and so on. The advantages of virtual reality are too many. It provides a limitless feature that could turn actual visitation into a thing of the past.

The digital evolvement of today’s society, specifically in the real estate industry, has really upgraded the whole process of buying properties. This is indeed a stirring phase for the current real estate game. It is amazing how, in just a few clicks, one can automatically obtain an immersive experience and check out a future space without actually driving across towns or cities to see it.

Supercharging Your Marketing Efforts

Supercharging Your Marketing Efforts

It is actually very easy to supercharge your marketing. However, you must first realize that anything you do to get deals is marketing! Anything you do to get and keep buyers is marketing.

The first concept to understand is that marketing isn’t about you! It may be about marketing you, but it just isn’t about you. Probably, the most supercharged element to marketing is to care more about your customers than your deals.

There are three ways to reach people in our marketing efforts. First, we can meet with them in person. Second, we can reach them by phone. Finally, we can use advertisements, signs, email or even direct mail to reach out and touch these people. All these methods have their place, and we tend to use all of them from time to time. Further, each can offer synergy to the other. Your mission here is to discover and use better marketing than what is typically used by most people.

Suppose you are planning on visiting people directly to get started. Instead of just calling people one at a time, going to an investor club meeting is a more supercharged marketing technique because a lot of the people you want to meet will be there. You will find that buyers, sellers, lenders, agents and even investors often attend these meetings. You can meet and develop relationships with more key people at a club and in much less time than just hitting the streets. This is one example of supercharged marketing. Hence, you would be wise to hold off on going out and calling people one at a time until you know the people or have had an introduction. Not only is cold calling inefficient, but it can be disheartening, especially if you struggle meeting new people.

Calling people directly on the phone can be supercharged by zeroing in and calling only those you specifically need. For example, when calling real estate agents, you may want to seek out just those agents who either already own rental properties or who buy and sell properties like we do because they are more likely to be willing and able to help. You can find these people by calling real estate brokerages and seeking out either the broker or the office manager to help you zero in on the “investor-friendly” agents described.

Using direct mail advertising can be very expensive. However, this can become very effective. You can supercharge your efforts by compiling and mailing to lists that target specific individuals that most likely want what you are offering. For example: landlords. They are easy to find. They put up signs. They advertise on the Internet and in newspapers and in “For Rent Magazines.” Creating a list of just those owners who own multiple properties can supercharge your results. Having proven scripts and templates can also help supercharge your efforts. The following script has received from 5- 9% callbacks when sent as a letter by me, and many students as well. But this script can be used over the phone or in person as well:

Letter to Cash Buyers:

I noticed you have bought some properties in Your City, Your State. Like yourself, I am an investor. Hence, this letter. I just thought maybe I might have some properties you might want or perhaps you have something I should buy from you.

Not sure this is a fit, but I would enjoy getting to know you and see if we couldn’t be of value to each other. I can be reached:

 

Ted Wood

555.555.5555
Cell: 666.666.6666
Email: Me@There.com

 

Real estate investing is a business that can be supercharged by developing close personal relationships. To develop profitable relationships you need to be like-able, but you can’t care about being liked. Anyone who is too sensitive to push-back from others is going to find out how quickly push-back turns into being pushed around.

By calling the advisory line and listening to your coaches you can quickly learn how to make your business bloom through supercharging your marketing efforts.

Home Improvement Repairs to Ensure Better Sales

Home Improvement Repairs to Ensure Better Sales

Now that you have decided to sell your house, you might be tempted to make some basic home improvement repairs to make your house as attractive as possible and to appeal to only the best buyers. Of course, making repairs and beautifying isn’t wrong; however, homeowners tend to overdo it and waste dollars on unnecessary repairs.

So, before you put your home improvement ideas on the table and purchase supplies, take a step back and think about what would really make your property attractive to buyers. The following are three improvements that will go a long way.

  1. Keep walkways and the yard in shape

Even if you have moved out of the property, it is still a good idea to keep the landscape tidy by cleaning the flowerbeds, raking leaves, and removing dead trees. It is also a good idea to set a timer on the lights so your property doesn’t appear eerie and dark. Similarly, don’t let your mail or newspapers pile up. Arrange to have your walkways and driveways plowed every week.

  1. Check your roof and clean the gutters

Cleaning your gutters and checking your roof can easily slip your mind. However, neglecting roof and gutter issues can lead to a severe domino effect that can turn away potential buyers.

Overflowing gutters not only damage the foundation, they cause drainage problems as well. Plus, it is highly unappealing for a potential buyer to see puddling water when visiting your house.

Similarly, the roof will be examined during the home inspection, but it is still better to have someone take a look at it beforehand. Small cracks in the roof often go undetected, ultimately causing water to infiltrate your house slowly and damage the walls and ceilings.

  1. Paint

One simple way to make your house more attractive is to paint the walls with a neutral and soft color. The ideal color is off-white and, while your walls might have a unique, appealing color, others might not have the same taste in paint color. The same applies to carpet.

I am Amazing Because | Scholarships

I am Amazing Because | Scholarships

Response is proud to be a scholarship sponsor to graduating Seniors at Timpanogos, Pleasant Grove, Orem, and Mountain View High Schools. The “I am Amazing Because…” Scholarship has been awarded to members of PTSA, NHS, DECA, FBLA, and a club of the schools choice. Over the last 3 years Response has been able to give 29 amazing students a $500 scholarship to the school of their choice. These students have used this scholarship to help them attend BYU, U of U, UVU, USU, SUU and Snow College. This most recent round of scholarships were given to four deserving students.

The “I am Amazing Because…” scholarship application is a 30 – 45 second video finishing the sentence “I am amazing because…”. We expect students to be creative in their videos and over the last 3 years we’ve been continually surprised at the quality of applications we have received. Many of these students have accomplished amazing things such as starting community service programs that have helped thousands, school athletics achievements, and great academic excellence. At Response we strive to be involved in positive community outreach and we look forward to continuing to serve our community.

Workshop Update | Week 11 – Mar 14–15

Workshop Update | Week 11 – Mar 14–15

This week, Response delivered 14 Real Estate and Stock workshops. Our overall customer experience score, for all surveys received, was a 5 out of 5. We saw over 928 students. Here is what some students shared about their experience:

“It was amazing , tons of valuable information . Thank you!!” —Birgit B.

Well done! It was a great workshop.” —Dalvir S.

“Lots of information and instruction. Training was great!”—Darcy S.

United Way Event

United Way Event

Response recently attended a United Way event at the Nuskin meeting building in down town Provo.

The event was put on in an effort to create awareness of the ongoing community crisis of our young people dealing with depression and anxiety.

United Way is spearheading an effort to create more awareness and provide possible solutions to help our young people.

Click here to check out a video of the event.

EveryDay Strong is  asking for donations.

March 15 at 11:51 AM ·

Many of you have been asking for the opportunity to hear Dr. Swenson speak about how to build resilience in kids! Here he shares how adults helping kids feel safe, connected, and confident is a key to overcoming anxiety, depression, and all sorts of hard issues.

 

Dr Matt Swenson takes about 1 hour discussing where this is all coming from and ways to help our your people.

Response is dedicated to assisting United way in achieving its goal of making every child in our community #everydaystrong.

Please donate to the united way through their facebook page.

How to Convert Stumbling Blocks into Stepping Stones

How to Convert Stumbling Blocks into Stepping Stones

Mount Timpanogos is a majestic 11,752 foot guardian of the beautiful valley where I live. I rose early one morning several years ago and hiked twelve miles to reach the summit. Together with a close companion we moved from wooded slopes to barren rocky slides where the snow white glacier protected Emerald Lake. Prior to reaching the top of the mountain, we saw two athletic young men running barefoot through the sharp rocks. I was amazed. As they passed our small group, I asked them why they were running barefoot through the sharp and jagged rocks. Stopping for a second, one man replied, “These rocks are only stepping stones to the top and running barefoot helps find the best footing.”

Since that time on the west slope of Mount Timpanogos, I have reflected many times on their comments about stepping stones. There is no doubt in my mind that every one of us will confront sharp and jagged rocks on our journey through life. We can call these rocks stumbling blocks, and how we treat them will determine whether they cause us to fall or will lead us to a bright future. I believe that stumbling blocks can become stepping stones that provide excellent footing for reaching our individual summits.

There are many obstacles to success in today’s ever-changing world. As the Director of Real Estate Education at Response, I have witnessed many of the obstacles that many entrepreneurs face on a regular basis. Here are just a few of the stumbling blocks that can stop us from achieving success in our chosen fields.
• Poor Work Habits. The lack of proper dedication to completing a task is the first stumbling block most entrepreneurs encounter.
• Undefined Goals. If you don’t know what you really want, there is no way you’re going to achieve success.
• Using Shortcuts. The idea of a shortcut is to achieve success without putting in the work. Too often, shortcuts lead to the wrong destination.
• Failing to Get Expert Advice. None of us is born with the ability to do everything perfectly.
• Lack of Consistency.
• Unwillingness to Change.
• Falling into Negativity.

Stumbling blocks can be converted into stepping stones to success when you follow a plan based on outcomes and results. I can’t think of anyone who doesn’t want to succeed. Unfortunately, many people find success elusive because they encounter stumbling blocks and haven’t learned how to confront these obstacles and turn them into stepping stones for success. Let me offer six suggestions for using your obstacles as stepping stones. .

1 – Change your perspective. How we think determines how we act. Start thinking long-term and living short term. When you begin completing short-term goals as part of long-term objectives, life looks better. Don’t get discouraged when things don’t happen as fast as you would like.

2 – Forgive yourself. Don’t wallow and dwell on mistakes. Failures, large and small, will happen. If you make a mistake, recognize the mistake and be willing to forgive yourself for making it. Then move on towards your long-term goal and forget the pain of the mistake.

3 – Develop new strengths. As you progress towards your long-term goals, start finding new ways to do things. Look for new ways to accomplish your goals. If you have made a commitment to achieve success in real estate, search out education and experts who will help you make your dreams a reality.

4 – Enjoy the journey. When you hit those stumbling blocks, remember that they are only short-term bumps on your long-term journey to success. Don’t let the stumbling blocks rob you of the fun and enjoyment of life. Be willing to laugh at your stupid mistakes and enjoy the success of your micro goals.

5 – Be open to options. From time to time the stumbling blocks may require you to change your path. Perhaps you will need to alter your program as there are many different ways to reach your goals. If something isn’t working, don’t give up on the journey, consider taking a different path to reach your goals.

6 – Never give up. Babe Ruth once said, “You can’t beat the person who won’t give up.” That is as true today as it was then. Your ability to keep working will help you to achieve success when others fail.

A wise religious leader, Dieter F. Uchtdorf, once said, “Our destiny is not determined by the number of times we stumble but by the number of times we rise up, dust ourselves off, and move forward.” The question is whether you want to stumble or step, and when you make the right decision, the answer is even more clear. Stumbling blocks can be converted into stepping stones for success.

You Shouldn’t Buy a House If…

Almost everyone dreams of purchasing a house of their own. However, there are always downsides and upsides to it. And, home buying isn’t for everyone. When you are in your 20s, are young and confused, and haven’t quite got your life together, then maybe you should really think hard about whether buying a house at this point in your life is the best decision. If you’re uncertain where your life is headed because you have a lot of plans and not all of them are aligned to one path, then maybe you should think twice about home buying.

If you still have to or plan to go back to school, don’t buy a house just yet. Unless you’re certain that you can afford a monthly mortgage payment and you have enough resources to maintain the property, or you’re sure that you’ll be staying in that house for years, you might not want to buy one. You can always opt to rent first while you’re in this uncertain phase.

Buying a house isn’t as easy as 1, 2, 3. For young adults, it’s always okay to wait until you’re financially able to purchase a house of your own. Don’t feel rushed by society’s timeline. You are not obliged to buy a property of this type or that price or in this location. You have the freedom to choose the house you want in the neighborhood you feel comfortable in. Don’t get fooled by society’s present standards. So, wait until you’re ready to buy a house.

Even though you’re in your 20s, you will soon grow older and may have a family of your own. It’s hard to know what size of home will fit your needs. This may grow and change over time – soon you may have a significant other, have kids and even have some pets. The size of home you need may change, so it might be too early to decide what to buy right now.

Don’t buy just yet if you are the type of person who likes moving from one place to another. Take time enjoying this phase of your life. When you’re done wandering is when you can settle in a place where you’ll always feel convenient, comfortable and content.

Moreover, some young adults don’t consider buying a house because they don’t want to get caught up in the responsibility of owning one. They have other priorities, like traveling, seeing the rest of the world, saving for a car, enjoying a new hobby, and such. Home owning does not end when you’ve finally signed papers, moved in and the house is officially yours. You have to take care of a lot of things in order to maintain a property. That includes the maintenance and monthly utility payments. Sometimes these fees will drain you financially and get you really stressed out. Thus, if you think you’re not ready yet, buying a house should not be your main goal.

Workshop Update | Week 10 – Mar 9 – 10

Workshop Update | Week 10 – Mar 9 – 10

This week, Response delivered 12 Real Estate and Stock workshops. Our overall customer experience score, for all surveys received, was a 5 out of 5. We saw over 801 students. Here is what some students shared about their experience:

“This was a terrific workshop all weekend.” —Berwyn S.

“I can’t wait to get started. Thank you for the opportunity.” —Christy C.

Excellent learning experience.”—Edilberto D.

10 Most Important Items to Upgrade on Your Home

10 Most Important Items to Upgrade on Your Home

If you have a home that you are considering fixing up so you can sell it for the best price but you don’t have a fortune to spend on upgrades, focus on the following 10 items to make the biggest impression on potential buyers:

  1. New Front Door: It is always important to make a good first impression and the front door is the first thing people see when they come up to a house. Replace an old, plain slab door with a new raised panel with a window in it.  Paint it a color that complements the house but also adds a little character and stands out.
  2. Tile Foyer Entry: The next item buyers see when they enter your home is the entry, so make it look like an entry by laying some tile or hardwood in the space allotted.  If you walk into a house that is carpeted right up to the front door, the entry disappears into the living room and doesn’t look as classy.
  3. New or Improved Doors: Another inexpensive replacement that can make a big difference is replacing the interior doors.  If your doors are plain, flat slab doors, upgrade them to raised panel doors.  Purchase a whole new pre-hung door, jamb and casing to replace the old ones.  They will come pre-primed so they can be easily painted.  Be sure to pick a color that offsets the walls for a two-toned look.
  4. New Door Handles: Along with your new doors, jamb and casing you should replace the hinges and door handles with a nickel satin finish to match today’s modern look.  You can buy inexpensive handles for about $12 each and make a big impression.
  5. New Electrical Switch Plates: Other items that are overlooked include electric wall switch plates.  A lot of people will freshly paint their place but leave the old, worn-looking electric cover plates on or even paint over them, which is worse.  Spend 35 cents each and replace the cover plates throughout the house.
  6. Paint/Replace Trim: Painting the house will make one of the biggest best impressions of all, but if your walls look pretty good already and you are on a budget, consider just painting the doors and trim.  You can pick a color that offsets the wall color, like white when the walls are grey or beige.  This will create a two-tone look which is much more appealing than everything painted the same color.
  7. Paint Kitchen Cabinets: Replacing the kitchen cabinets is nice but also one of the most expensive rehabbing items you could do, so if you are limited on funds, consider simply painting the cabinets.  Since today’s popular look is white cabinets, you can paint over any cabinet finish with semi-gloss white and make your cabinets look new.
  8. New Shower Curtains: Another easy, inexpensive upgrade is to replace your shower curtains with new, decorative curtains that match the colors of the home.
  9. Add Window Shutters: You can also add window shutters to cover up old windows and avoid spending the money to replace them.
  10. Add a Nice Mailbox:  Lastly, you can help your house stand out from the crowd by replacing the mailbox with a new one that has a little more character than every other mailbox on the street. You can also paint the old one to stand out and tie the color in with your new front door for some added street appeal.

 

There is NEVER a Bad Time to be a Real Estate Investor

There is NEVER a Bad Time to be a Real Estate Investor

I had the privilege of beginning my investing career working with the Father of Creative Real Estate, Dr. A.D. Kessler.  Dr. Kessler had the wisdom of over five decades as a real estate investor and had seen several cycles of real estate ups and downs.  One of my favorite lessons from Dr. Kessler is: “Fortunes have been made in real estate investing in good times, bad times, and in-between times.  There is NEVER a bad time to be a real estate investor.”

After adding my 21 years of real estate investing to Dr. Kessler’s vast experience, I have realized that he was correct in this statement.  And now as I work with many other investors, it is my opportunity to remind you that investing works best when you add a long-term perspective to the short-term one.

What goes up must come down, and what goes down must come up.  These are the cycles in the real estate market, and no matter what the brilliant financiers and masterminds behind the Fed’s manipulation of interest rates may do, these cycles are still going to play out.  The “crash” in 2008 was going to happen with or without the issues of subprime or dishonest hedge funds. It may have happened with a little different timing, or a little more gradually, but it was the result of prices rising beyond the ability of many buyers to purchase properties.  And when it bottomed out, a reversal needed to occur because too much money was sitting dormant—it was “burning a hole” in people’s pockets.

I have the opportunity of speaking with numerous investors every day.  Many are new to the process and concerned because the current market is moving rapidly. Prices are going up, and there are housing shortages in many areas around the country.  This is what is called a “seller’s market.”  These investors are concerned because it is more difficult to make deals on properties at low investor prices.  For them, they are having a bad time in real estate investing.  It is harder to get good deals.   The funny thing is that if it was a buyer’s market it would be easy to get the deals, but it would be harder to sell the properties at a good profit.  Gosh, it starts to sound like you can never have the ideal market.

My perspective learned primarily from Dr. Kessler is that it’s always a good time to be a real estate investor, and we just need to learn how to work with things as they are.  The secret to success in a seller’s market is to become a Master of Marketing to find properties. Every business understands that they need to do marketing to find customers—the life blood of business.  In real estate, our marketing is to find properties, and to find people who want properties.  And the savvy real estate entrepreneur recognizes that they need to put together a diversified and effective marketing plan to find these properties and buyers.  In a seller’s market, it is easier to find buyers than properties, so we need to create a successful marketing plan to find properties.

Unfortunately, many new investors think they can simply line up a real estate agent, let them do all the work and go home and watch “Dancing with the Stars” and wait for the properties to roll in.  Well that will get you what most investors are getting—very little.  That isn’t a marketing plan, and every business in the country would fail if they only had one way to generate customers.

I’ve had the opportunity to work with some of the most successful investors in the country—the ones who write the books and have the television programs.  I’ve helped edit their books, and even been on their tv programs.  So I also had an opportunity to ask how they find properties.  Do you know what their answer has consistently been?  “Every which way we can!”  They know that in real estate, like every other field, there is no magic pill—no magic way of finding properties.  They cite online classified ads, multiple real estate agents, wholesalers, other investors, property managers, driving for dollars in neighborhoods, door knocking, attorneys and insurance agents, resubmitting on rejected offers, foreclosures and pre-foreclosure lists, calling on rental properties, probate properties, and many other methods as the ways to find properties.  Most importantly, they all have a marketing plan with at least a dozen or more methods that they use regularly, and they track their results.

Every investor must treat their investing as a business or it will wither and die.  Marketing can never become an afterthought. It must be front and center in your investing time. The allocation of time blocks must be created and used effectively.  If you need additional lists of ways to find properties, contact our office. We have lengthy lists that you can select from to create your marketing plan.  Let me ask a few questions to see if you have begun to think creatively about how to “turn over more stones” to find off-market properties.

  • Have you contacted any property managers to see if any of their clients are buying or selling?
  • How many neighborhoods have you driven through in the last two weeks to look for properties that are for sale?
  • Do you work from lists of foreclosures or pre-foreclosures to follow up on properties through direct mail, phone, or knocking on the property’s door?
  • Have you spoken to any probate attorneys to see if there is a way you can assist people with estate properties that they are handling?
  • Have you spoken to any administrators or marketing directors for assisted living or nursing homes? They often have potential residents who cannot move in until “mom or dad’s” house is sold.
  • Do you have online sources that list properties for sale and also properties for rent that you check daily?
  • How many wholesalers have you linked up with to see if you can do co-wholesaling together, where one of you brings the property and the other brings the buyer?
  • Are you checking on tax delinquencies in your area?
  • Do you have any bird-dogs finding properties for referral to you? I, at one time, had dozens of pizza delivery guys forwarding properties to me.
  • Do you know which areas of town have the most boarded up houses? And when was the last time you spent a couple of hours driving those neighborhoods?

Real Estate investing is not difficult, but it does takes diligence and an organized plan.  And at the root of that plan is your marketing plan.  I challenge you, on behalf of the entire program, to develop a marketing plan within the next two weeks that will have at least one dozen different methods of finding properties.  It may take longer to implement them all and establish tracking to make sure that they work, but a diversified and effective marketing plan will allow you to elevate and ramp up your success.  And if you already have a dozen, move to having two dozen methods and make sure that they are all producing successful results.

You will discover that this process alone will not only provide you with more and better property opportunities, it will also keep you so busy with success that you will forget about whether it is a seller’s market or a buyer’s market or an in-between market, and you will be many steps closer to building your own fortune!  Best wishes, and we’ll see you on the road to success!

Workshop Update | Week 9 – Mar 2 – 4

Workshop Update | Week 9 – Mar 2 – 4

This week, Response delivered 13 Real Estate and Stock workshops. Our overall customer experience score, for all surveys received, was a 5 out of 5. We saw over 856 students. Here is what some students shared about their experience:

“It was the best thing I ever did.” —Carol M.

Awesome – so excited for the future!” —Darnetta S.

“The workshop was very educational.”—Dwight D.

Feeding America Update | Feb 2019

Feeding America Update | Feb 2019

Through FEB 12, 2019 – Response event attendees have donated monies to feeding American totaling 37,700 meals.

As part of event VIP upgrades, attendees can purchase a VIP seat and the customer proceeds spent to upgrade their attendance is donated to the Feeding America organization.

Response is excited to continue is involvement in making a difference in the local community and participating in the vast reach of Feeding Americas service areas.

 

Letter from Feeding America

Hi to my friends at RMG,

Hope you are well !  I wanted to extend my thanks for your support and share an update – this is the work you make possible!  Thank you!

Because of your dedication to Feeding America, families are receiving the nourishing meals they need during the cold winter months. At the close of 2018, your support helped us fight hunger among seniors, college students, children and people recovering from natural disasters—including the recent wildfires in California and hurricanes across the Southeast. Children like Richard, whose story is included in the Winter 2018-2019 Impact Report, were able to move from hungry to hopeful because of you.

As of this writing, the federal government reached an agreement to reopen for three weeks. However, as a result of the five-week shutdown, households across the country have been forced to make impossible choices between paying bills and buying food. Food banks and food pantries are witnessing increased needs in their communities, and in response they are sourcing more food, hosting special food distributions, extending their operating hours and helping federal workers apply for assistance programs. The shutdown has also highlighted the key role that dedicated partners like you play in helping us rapidly respond to people in need. For all you do to fight hunger, thank you.

As you read the report, please remember that your support makes a meaningful difference. Feeding America offers relief, energy and hope to millions of people each week, and it’s all because of your generous gifts. If you have questions about the programs your donations help fund, please reach out to me at any time. It would be my pleasure to share the multiple ways you make a difference for people struggling with hunger.

Best wishes always,

Stacey O’Malley
Director of Development

 

Joint Ventures on Spec Building

Joint Ventures on Spec Building

One way to invest in real estate is to joint venture with property owners by building a new home on their property for resale.  Buying a building lot and constructing a home on it for resale is called investing in a spec house because you are building it on speculation that it will sell for a profit.

To do this, you want to look up all the vacant properties in the neighborhood of interest and find those that are paid for free and clear.  Then contact the owner and propose the idea of joint venturing with them on a project on their property.  Ask them to sell their property to a joint venture partnership for a reasonable price. You will then build a house on their property and sell it, and after paying them the agreed price, split the remaining profit.  As the managing member of the partnership, you will obtain a construction loan to pay for the house building and the owner will subordinate his or her home to the construction loan.  Through this process an investor can start a project with zero monetary invested and make half of the profit.  An example is as follows:

Owner’s property:                                                                     $100,000

Construction cost to build house:                                               $150,000

Price of the finished home:                                                        $350,000

Other expenses:

Taxes, insurance, closing costs, commission:                    $35,000

Total Profit from Sale:                                                                 $65,000

Split 50/50:                               Each partners share:       $32,500

Not a bad profit for not investing any of your own money.  Your job is to line up an architect to design the home, get a general contractor to build it and procure the construction loan.  The owner’s job is to put up his property as collateral for the loan and, in doing so, make the agreed upon purchase price and the additional profit.  Of course the more expensive the project, the more money that can be made.  Imagine the profit in a multi-million dollar home still with no money out of pocket.

Banks are completely willing to do these loans when the property is free and clear because their loan will be less than 50% of the appraised value of the home when it is completed.  Of course, if you are a general contractor, you can build the home yourself and make an additional general contracting fee.  If you are a real estate broker, you can make an additional commission for listing and selling the property.

Workshop Update | Week 8 – Feb 23 – 24

Workshop Update | Week 8 – Feb 23 – 24

This week, Response delivered 13 Real Estate and Stock workshops. Our overall customer experience score, for all surveys received, was a 5 out of 5. We saw over 703 students. Here is what some students shared about their experience:

“Excellent workshop. The best!” —Angel M.

Very inspirational!” —Raquel E.

“This was an awesome class- so mind opening!”—Atiba T.

Cheap Bandit Signs

Cheap Bandit Signs

As you drive around your city, you have probably noticed signs in strategic locations advertising a house for sale, cash for houses or someone looking for an apprentice to make monthly income investing in real estate.

Did you ever imagine that you would be putting out signs to find properties and cash buyers? And not only signs but bandit signs! What is a bandit sign?  Bandit signs are typically used to promote limited time offers to a large group of people.  However, they may get quite costly when you find that you need to replace and buy them repeatedly.

You can order them from various web sites: www.amazon.com, www.gobigyellowletter.com, www.signsonthecheap.com or sometimes you can find them at a home improvement store.  You can even go to the dollar store and pick up white signs, paint them yellow and put them throughout town.

Do you want to pick up signs for free?  Let’s think outside the box for just a moment.  Is it an election year?  Whether it is a midterm election, primary election or a full-blown presidential election, candidates have flooded the city with their election signs.  They create them by the hundreds and put them out by the hundreds. There are signs for candidates ranging from city council to sheriff to mayor or governor or president of the United States.  These signs remind us not only to vote but to vote for a particular person.  After the elections are over, where do these signs end up?  Who goes around and gathers them up?  Wouldn’t it be great to help the candidate’s election committee and pick up these signs? What a Good Samaritan you are.

Simply contact the candidates, both winners and losers, and offer your assistance to pick up their signs.  They will be tremendously grateful for your help and you will have an abundance of signs that are ready to paint over with bright Rust-Oleum Painter’s Touch 2X 12 oz. Gloss Sun Yellow General Purpose Spray Paint from your local home improvement store.

Feel free to set out your new and improved yellow bandit signs around the city stating that you “Have a House for Sale,” “Must Sale” or “We Pay Cash for Houses.”

 

Home Down Payment

Home Down Payment

It’s every American’s dream to have a house they can call their own. And before that dream materializes, they’ll have to accomplish a number of things and have enough money for their home. Usually, the first thing that comes to mind when we think of buying a home is the down payment. A home down payment is the amount of money paid upfront to purchase a home. It is combined with the monthly charges added when applying for a home loan.

When preparing for a down payment, you’ll have to consider multiple things like the type of home you wish to have, the type of loan you want to apply for, the term of the loan, and so on. You’ll need to consider all of this before you truly start factoring your down payment cost. There are tools available to help you determine your expected down payment cost and how to save for it.

When you are able to save a large amount for the down payment, you’ll be more comfortable in your payment cycle for many months. For instance, if you can pay 20% of the home’s selling price as the down payment, you won’t have to pay for the private mortgage insurance (PMI). Also, a bigger amount of down payment results in smaller monthly mortgage payments. It also helps you qualify for a loan with a much lower interest rate. Having a larger down payment can make you an ideal buyer, making your offer more attractive compared to other potential buyers. Although a 20% down payment is enough for you to avail these benefits, you still have the option of paying an even bigger amount for your initial payment. It depends on how financially prepared you are and how bad you want to get the house yourself. The more beautiful and ideal the house is, the more buyers there are that you have to compete with, and a higher down payment offer can definitely do the trick.

Workshop Update | Week 7 – Feb 16 – 17

Workshop Update | Week 7 – Feb 16 – 17

This week, Response delivered 15 Real Estate and Stock workshops. Our overall customer experience score, for all surveys received, was a 5 out of 5. We saw over 753 students. Here is what some students shared about their experience:

“Awesome class!” —Beatrix W.

Amazing workshop!” —Noelle W.

“Let’s do this!”—Johan M.

Negotiating Earnest Money Deposits

Negotiating Earnest Money Deposits

An earnest money deposit is always a bit of a challenge for real estate investors.  Real estate agents and some sellers tend to ask for really large earnest money deposits, but paying large earnest money deposits can be a huge challenge for real estate investors, especially since they make multiple offers in order to make deals happen.  If you were to make 10 offers this week on properties and each one required $2,000 in earnest money, what would that do to your ability to be an active investor?  Let’s examine the truth about earnest money in terms of the law and provide a practical approach on how to make your offers include earnest money that is reasonable and practical.

As far as we are aware, the laws across the United States require that there be “consideration” in making an offer to purchase real estate.  Consideration refers to the offering of something of value from the buyer to the seller for them to consider the purchase offer.  In years past that may have been a chicken or a new harness. Today it is most commonly money.  The law does not usually specify how much money qualifies as consideration, nor when that consideration needs to be paid.

There are ample cases in most states indicating that $1 represents “good and valuable consideration” for the purchase of real estate. So to offer a relatively low consideration is a right that exists in all states, and the money does not have to be paid upon acceptance of offer to open escrow on the property.  Escrow is a collection of money and/or documents held by a third party in connection with a real estate closing.  Escrow can be opened with only a purchase agreement going into the escrow at the beginning.

I have found that in making offers, the person who makes the offer has an advantage, so we ought to use that advantage to make an earnest money proposal that works for us.  Here is an example of what we would suggest for an earnest money proposal: “The earnest money deposit shall be $300 due and payable at closing.”  It has been amazing to me how frequently this proposal has been accepted just because it is in writing and included with a bona fide offer to purchase.

Not all sellers will accept an earnest money proposal like the one above.  For example, on foreclosed properties, the lender who owns the property, or the government agency who owns the property, often has set regulations that they will not bend.  Institutional sellers have a right to set these regulations if they choose.  Since most private sellers are a little more flexible, the above proposal is more likely to be acceptable to them.  After all, earnest money deposits go into a safe or a bank account and cannot be accessed or spent until after closing.  There are no shopping sprees at Costco available to the seller.

If the seller resists your earnest money proposal, they will probably counter with a request for more money due sooner than closing.  Let’s say they ask for $2,000 and want it to be due within two days after they sign the agreement.  You can respond with the following:

  • Well, I’m reasonable and negotiable, and it sounds like you are opening some negotiation.
  • You have requested two modifications to my proposal—A) The amount of the earnest money deposit; and B) When the earnest money deposit will be made.
  • In the spirit of negotiation, I’m willing to allow you to select either one of the two modifications, and I will take the other one. So if you want $2,000, I get to select when it will be paid, and I choose payable at closing. Or if you want the money within two days, I get to select the amount, and I choose $300.
  • If you are unwilling to negotiate, then I will need to terminate my offer. Keep in mind that there are a lot of opportunities for me. I can make 20 offers today if I want to, but you need to sell just this one specific property, and I am a bona fide buyer making a bona fide offer.

Obviously, I’m not able to have this discussion in every situation, but I have made certain that my real estate agents understand and support my approach, and we use this “two choices” approach frequently, and we’ve shared it with many other investors who have also implemented it successfully.

You may have to make a few extra offers along the way, and you always have the right to agree to pay a larger amount if that works for you.  We want to assist in every way we can to create greater success for you as a real estate investor.  And remember that real estate deals are made, not found.

 

How to Overcome Personal Fear in Today’s Financial Climate

How to Overcome Personal Fear in Today’s Financial Climate

It’s difficult to not worry in today’s up and down financial times.  Newspapers, television, and social media outlets continually reveal the negative results of decisions made by entrepreneurs.  Unfortunately, the rush of bad news is only compounded when your friends, neighbors, and long-term associates join in and talk about their personal failures.  If you’re like most people, you might soon question your personal investment decisions, and before you realize it, you develop what I call “personal fearopia.”

In this “fearopia,” you start to question decisions you made without any basis for concern.  In today’s world of real estate investing, this is especially true.     When “personal fearopia” rears its ugly head, the decision-making process can quickly be impaired.  The first thing that happens is that you begin to question past decisions.  You worry that you made a mistake and start to financially retreat.  But beware: when you’re moving backward, there is no chance for you to progress.  Here at Response, we hear many financial success stories, and without exception, the individuals who have been financially rewarded have done so when they followed a simple well thought-out plan for overcoming fear of failure.

Entrepreneurs experience failure, but they should remember that they’re not alone.  Bill Gates and Steve Jobs both experienced setbacks and failures on their road to success.  What makes them different is that they treated these failures as temporary roadblocks on their path to ultimate success.  As the Director of Real Estate Education at Response, I believe it is critical for each new real estate entrepreneur to realize two important points.  First, failure is temporary and not fatal, and second, there is a proven method for overcoming fear in the tumultuous financial climate of today.

With the right attitude, failure is temporary.  In an earlier article, I explained why I believe that Michael Jordan is much more than a tremendous athlete and member of the Basketball Hall of Fame.  He has impacted countless individuals in their quest for success, both on and off the basketball court.  When asked about failure, Michael Jordan used his own quest for success on the court to emphasize that failure is temporary and nothing to be feared.  He said, “I’ve missed more than 9,000 shots in my career.  I’ve lost almost 300 games.  Twenty-six times, I’ve been trusted to take the game winning shot and missed.  I’ve failed over and over and over again in my life.  And that is why I succeed.”

I would like to suggest a simple five-step method for overcoming your fears as you begin your career in real estate investing.

Step #1 – Confront your fears head on.  Don’t ignore fear.  Instead act as if you have already succeeded.  Ignore the media and social media outlets who barrage you with negative examples of why you can’t succeed.

Step #2 – Develop a personal real estate plan.  Start by getting as much education as possible about your preferred real estate strategies.  Remember that Resource provides  training, tools, and resources.  Now use your education to develop a plan that includes goals and objectives along with timetables.  You will never succeed unless you are willing to challenge yourself to meet timetables that match your objectives.  This plan should be written out and then reviewed on a regular basis.

Step #3 – Eliminate negativity.  This new plan is a personal roadmap that can help you reach your financial objectives, but if you don’t eliminate negativity in your thoughts, actions, and associations, the plan can fall apart. Instead of thinking about negative “What if” questions, turn your thoughts to the positive and start dwelling on the “When this (positive event) happens.”  You will be surprised at how this new positive attitude will increase your ability to turn your plan into reality.

Step #4 – Take action.  You must put your plan into action.  Own your plan. These are your goals and objectives.  It can help to cut large goals into small, easier goals.  Prioritize your time and turn those small goals into completed tasks.  Take action and you will be actively conquering fear.

Step #5 – Build confidence by refining your plan.  As you take action and experience small successes in your real estate career, your confidence level increases.  When this happens, consider refining your plan to include larger yet still achievable objectives.  Every time you do this, your ability to overcome fear will increase.

It’s good to accept that fear could play a large role in your financial life. But you are in control. Your thoughts control your actions and vice versa. So eliminate that fear by taking steady, manageable action and you will soon find success in your real estate investing.

Workshop Update | Week 6 – Feb 9 – 11

Workshop Update | Week 6 – Feb 9 – 11

This week, Response delivered 12 Real Estate and Stock workshops. Our overall customer experience score, for all surveys received, was a 5 out of 5. We saw over 859 students. Here is what some students shared about their experience:

“Very, very informative! Thank you!” —Amy P.

“Can’t wait to start. Already recommended this to my cousin.” —Carmen J.

“The program was phenomenal!”—Monique B.

Improve Your Productivity: Know Your Numbers

Improve Your Productivity: Know Your Numbers

For many years I was in the Restaurant Business where, I owned and operated multiple restaurants along with a  restaurant consulting company. I also provided support to other independent restaurant operators. I taught them systems and skills on how operate more efficiently which in true made them more profitable. One of the lessons I learned early, was the importance of keeping track of activity. Without knowing their numbers and the activity level, it was almost imposable for them to understand what they were doing right or what wasn’t working. There was no way for them to know, where to focus their time and energy to make improvements.

Today in my role as a Real Estate Coach and Advisor I speak with very few students that are tracking their numbers let alone reviewing them with the idea of being able to improve their business. If you are not keeping track your activity, you are missing out on a tremendous opportunity for improvement.

Some of the data you should be tracking daily and reviewing at least monthly. How many people do you talk to daily and what is the mix? How many are real estate agents? How many are cash investors? What about sellers are they FSBO’s, pre-foreclosure, calls from you bandit signs, etc.? Which groups are the most productive for you and why? How many cold calls did you make? How many doors did you knock on?  How many people did you talk to while you were knocking on doors? How many ads are you running and which ones are working for you? Are you asking yourself questions and are they the right questions?

The real estate business is the same way. You have to know your numbers on your activities.  As you move forward, you will set goals for your activity and check yourself daily. You will find power along with insights you didn’t know you had. There are three major areas we need to track our activity in daily they are;

  • Finding Quality Cash Investors
  • Finding Deals
  • Writing Offers

In each of these areas, there are at least nine techniques.

We have developed a new tool that is designed to help you with your weekly planning. If you would like to receive a copy of this tool which list the techniques please contact the Real Estate Advisory Line at 877-394-4752 ask for the Weekly Activity Worksheet and the Advisor will email you a copy. It will help you to identify areas that you might want to study and improve your skills.

 

Real Estate Investing: 4 Ways to Fail

Real Estate Investing: 4 Ways to Fail

Real Estate Investing: 4 Ways to Fail. Most investors get started in real estate with a desire to be successful and make money. However, every once in a while investors find new (and sometimes not so new) ways to fail.

Know your market — I can’t stress this enough. If you don’t know your market, you won’t know what the other homes in the area are selling for and what the neighborhood expectations are or how long it’s going to take you to off-load a property. This can be detrimental to a deal. Nobody likes paying on a vacant house that is just sitting there because someone didn’t do his or her research.

Never pay full price — Agents are paid a commission or a percentage of a sale so they like to sell homes for as much as possible. With the market being so hot right now, they are getting away with selling high. However, as an investor you should never pay full price for a property. Always try to negotiate and bring down the price. That helps give you instant equity and sweetens up the deal.

Always have a business plan — Without a plan things can become total chaos. Make sure to keep organized. A good business plan should include both strategical and tactical plans. Make sure you are tracking all possible outcomes so you don’t get caught off guard with no plan. That’s when things can go south fast.

Beware of over-improvement — Don’t be the guy that thinks if he puts the nicest, fanciest, more expensive stuff in a property that he will make bigger returns. That is actually far from the truth. Always make sure your repairs compliment the neighborhood. Make your home one of the nicer homes but don’t overdo it. A great example of this would be if your neighborhood has no garages, don’t spend a ton of money building one, as it doesn’t fit the area. Same thing applies on the inside. If nobody has granite countertops, don’t be the only one who puts them in. You will lose money in those types of situations.

 

Workshop Update | Week 5 – Jan 31 – Feb 1

Workshop Update | Week 5 – Jan 31 – Feb 1

This week, Response delivered 12 Real Estate and Stock workshops. Our overall customer experience score, for all surveys received, was a 5 out of 5. We saw over 626 students. Here is what some students shared about their experience:

Best class ever!” —Blanc L.

“Great workshop, I learned a lot.” —Melinda D.

“The best of the best.”—Ryan R.

The Effect Rising Interest Rates have on the Real Estate Market

The Effect Rising Interest Rates have on the Real Estate Market

Interest rates are on an upward trend over the two years. As they continue to rise, let’s look at the affect they will have on the housing market.

The biggest effect is going to be, as interest rates go up consumers buying power goes down. Here is an example of how this would look. Let’s say a consumer can qualify for a home payment of $1000 per month.  They do a down payment of 10%, and they get a 4% interest rate. That would qualify them for a property valued at $232,500. This was the case a little over 1 year ago. In today’s market with everything being equal, but their interest rate closer today’s market rate at 5% would allow them to buy a property valued up to $207,000. With the rising interest rate, they have lost $25,500 in buying power. This along with the higher home prices in today’s market, make in hard for the end retail buyer to buy homes. This can also start putting some down pressure on the market which will cause property price to slow or even start going down.

Another thing that will be affected by rising interest rates is ARMs (adjustable rate mortgage), because it is directly correlated to the current interest rates. As interest rates go down ARM interest rates will go down, but as interest rates go up ARM interest rates will go up as well. ARMS will have an introductory period where interest rates will not change. When the introductory period ends the interest will start following current market rates. If they are not refinanced into a fixed rate, their interest rates will continue to rise with the market. As the interest rates goes up their mortgage payments will go up. This may cause some homes to be become unaffordable to the home owner, which will result in more foreclosures taking place.

Interest rate are still at a historically low rate, but they have been rising over the last couple of years. As they continue to rise, there will be more downward pressure on housing prices. Interest rates are an important element to pay attention to in the real estate market.

 

Smart Goals

Smart Goals

Several years ago, I attended a conference of business professionals where I was asked a simple question that ultimately had a major impact on my life and that of my family.  The presenter asked everyone in the audience to write down one major accomplishment they would like to achieve within five years.  After everyone had committed the overall goal to paper, he asked us the following question, “What will stop you from achieving this goal?”  What was interesting was that he didn’t ask how we could achieve the goal, rather he wanted us to clarify the reason or reasons why it would not happen.

I reflected on his question for some time and then listened as he pointed out the difference between dreams and goals The first thing I came to understand was that dreams and goals are not the same thing.  Goals can lead to results whereas dreams most often lead to frustration.  What’s the reason?  Dreams are all about the destination whereas goals are about the journey.  Also, for goals to be effective, they must be realistic and well defined.

How can we learn to set goals that will make the difference between success and failure?  I believe  the answer is a step-by-step process.

  1. Believe in yourself. Ultimately, success will be on your shoulders, so you must believe in your own abilities.
  2. Visualize the process. Achieving long-term success is a journey or process and your goals must be achievable.  You should be able to visualize yourself completing not only the long-term goal, but the smaller micro goals that are the foundation for success.
  3. Put it on paper. If you don’t write it down, you won’t remember it, and if you don’t remember it, you won’t accomplish it.  Be specific as to what you are going to do, how you’re going to do it, and when you intend to accomplish it.
  4. Commit yourself to action. This step is fundamental to success in business.  Unless you are committed to the process and taking regular, consistent action you are ultimately committing yourself to failure.
  5. Remain focused on micro goals. Micro goals are best described as the individual activities required for success.  Yes, you have a long-term goal, but you must remain focused on the individual assignments necessary to achieve that long-term goal.
  6. Follow a plan of action. Your plan of action must be specific and should be written down on paper.  Once you have recorded what you are going to do, you must remain focused on doing it.
  7. Adopt a review it now attitude. If you want to see success happen on a daily basis, review your action plan daily.  Make yourself accountable to your action plan by reviewing what you have accomplished, what you still need to do, and an up-to-date timetable for accomplishing the tasks.

 

Most entrepreneurs have heard of setting SMART goals. I have been fortunate to see countless individuals change their lives by setting realistic goals and then achieving success when the SMART acronym is applied.

 

SMART GOALS

  • Specific – Write down the specific tasks to be completed along with a detailed account of how you intend to accomplish the goal.  It should clearly detail what you are going to do.
  • Measurable – If the goal is well written, you should be able to measure how it was done, when it was accomplished and the final result.
  • Attainable – You must be able to achieve the goal. Once again, micro goals with concrete objectives must be part of your SMART goal program.  If you lack specific talents or education, then add micro goals that allow you to develop those talents.  In my role at Response, I have witnessed individual after individual develop real estate talents that allowed them to achieve or attain their micro goals.
  • Results – Your goals must be results-oriented. As you review your individual goals, you must evaluate the results themselves, not just the activity participated in.
  • Time Bound – Your goals should be tied to realistic time frames that stretch your abilities.

 

When I was in Europe I visited Picasso’s museum in Barcelona.  I was amazed at the achievements of Pablo Picasso as an artist.  His quote on goals explains how he was able to accomplish so much during his life, and I believe it can be a roadmap for how to achieve success today instead of experiencing failure.  Picasso said, “Our goals can only be reached through a vehicle of a plan, in which we must fervently believe, and upon which we must vigorously act.  There is no other route to success.”

Your ability to set realistic SMART goals and then to follow through with a well-designed action plan will determine the difference between success and failure.

Workshop Update | Week 4 – Jan 27

Workshop Update | Week 4 – Jan 27

This week, Response delivered 11 Real Estate and Stock workshops. Our overall customer experience score, for all surveys received, was a 5 out of 5. We saw over 511 students. Here is what some students shared about their experience:

“Different, in a very good way.” —Deshawna W.

“I like the fact that they are very willing to help everyone out no matter their financial position.” —Carlos C.

Very good class.”—Patrick D.

Negative Comments Should Never Define Your Financial Destiny!

Negative Comments Should Never Define Your Financial Destiny!

Life is difficult especially if you allow negativity to control your actions.  Far too often, we allow people’s opinions to define our expectations.  This is also true in the real estate investing world. As Response’s Director of Real Estate Education, I am constantly made aware of negative comments that can derail a blossoming real estate career.

In our world of high-speed Internet and with the growth of social media, it is easy to lose focus and get distracted from your personal financial goals.  This sometimes occurs when family, friends, or associates question your financial decisions.    If you allow these uninformed opinions to control your actions, you might soon doubt your decision to change your financial future using Response’s powerful training, tools, and resources.

Recently I had the opportunity of attending an NBA playoff game with several of my close friends.  While there, we talked about which Hall of Fame Players had influenced basketball the most.  Before the discussion ended, we had moved the conversation to the basketball players who had most impacted our lives.  After listening to my friends give their opinions, I said that Michael Jordan was the most influential player in my life.  When asked why, I responded with a quote from Michael Jordan himself.  He said, “If you accept the expectations of others, especially negative ones, then you never will change the outcome.”

This is especially true in the real estate field and establishing personal financial goals.  When your friends and associates offer ill-informed negative comments, they strike right at your emotional center.  Regardless of the fact that the negative comments are generally based on rumors and falsehoods, they can have an impact on your real estate decisions.  Perhaps you are ready to make that first offer, but your brother-in-law offers the comment that he read several negative comments online about investing in real estate education.  What do you do?

Let me give you a three-step process to keep you centered on real estate success.  First, and most important, you need to ignore mean-spirited feedback and responses based on false information.  Consider the comment of your “brother-in-law” about negative feedback he saw online.  Remember that comments found online are only opinions  and are often based on faulty or missing information.

The second step is to re-commit to working toward your personal goals.  You made the decision to pursue real estate education as a vehicle to achieve your financial objectives.  This education can change your life, but a specific action plan must be included with those goals.  So, step back and take concrete action to convert your education into a roadmap for financial success.

Step three Share your dreams with like-minded people.  It is critical that you associate with people who have a positive attitude.  These are the people who will rejoice in your success as you move forward.

Real estate investing is a key to wealth.  Andrew Carnegie said it best when he stated, “Ninety percent of all millionaires become so through owning real estate. More money has been made in real estate than in all industrial investments combined. The wise young man or wage earner of today invests his money in real estate.”  Unfortunately, there are many people who have not come to this same conclusion.  When they offer negative comments and try to influence you to abandon your real estate goals, they are not your friends.  They are not your supporters.  Take their advice for what it is worth – nothing.  Your financial future is in your hands.  Negative comments should never define your financial destiny.

 

Persistence is the Ultimate Key for Success

Persistence is the Ultimate Key for Success

What is the determining factor for success in business today?  Is there some secret certain entrepreneurs have learned that makes success a reality rather than a fantasy?  These questions have a  a one-word answer – persistence.

Zion National Park is less than three hours from my home, and I enjoy making the trip several times a year.  Together with several close friends, we hike the steep canyons where vertical cliffs of 1,500 to 2,000 feet in height tower above us.  On a recent excursion to this hiking paradise, I waded up through the Virgin River towards our ultimate goal called The Narrows.  I remarked to a close friend, “It’s amazing how such a small river can carve a canyon, thousands of feet deep through rock hard stone.”  I listened as my friend described the geological process unique to the Park.  When he finished, I added that it wasn’t power, but persistence that was responsible for the geological marvel.

As the Director of Real Estate Education at Response, I am acutely aware of the role that persistence plays in real estate investing.  Of course there are other elements in play such as education, training, experience, and hard work, but the ultimate key for success is persistence. Response has developed a vast library of training, tools, and resources that can provide the background necessary for success, but unless the individual understands the role of persistence, success will usually remain a fantasy.  Persistence is key.  Calvin Coolidge once stated, “Nothing in this world can take the place of persistence.  Talent will not:  nothing is more common than unsuccessful men with talent.  Genius will not: unrewarded genius is almost a proverb.  Education will not: the world is full of educated derelicts.  Persistence and determination alone are omnipotent.”

None of us is perfect.  We all make mistakes.  Failures, large and small, are a fact of life.  How we react to those hard times will determine how our lives and our investments end up.  Persistence and determination will determine whether you succeed or fail.  One opportunity for persistence comes when real estate investors come face to face with the obstacle of criticism.  Friends, who usually have little or no experience, offer unwanted and wrong advice.  They say they want to help you avoid failure by pointing out how you made one mistake after another.  Perhaps they criticize your current investment plans. The truth is that there will often  be people who tell you that something won’t work, that you don’t have the abilities or talents, or that you just can’t do it.  Don’t listen to the naysayers.  Instead seek the advice of people who have the experience and knowledge to help you succeed.  And then, make the determination to hold steadfast to your goals and objectives despite setbacks.  When you develop the trait of persistence you can and will overcome these negative attacks.

How do you develop the ability to become more persistent?

  • 1 – Identify your objectives. What do you want to achieve? What are your short and long-term objectives?  Be realistic and concise.
  • 2 – Determine your motivation. Why have you established your goals?  Goals are great, but unless you have a burning desire to accomplish them, they can slip by and soon be forgotten.
  • 3 – Believe in yourself. Everything starts with a self-evaluation.  What are your strengths and talents?    Acknowledge your weaknesses and commit to finding help in overcoming them.  You must believe that you can overcome weaknesses, use your strengths, and actually achieve your goals.
  • 4 – Learn through education and experience. Once you determine where you need help, find experts who can guide you and point you towards the resources that will give you confidence to actually do something.  But education is not enough.  You must gain experience by following through.  Yes, you will make some mistakes, but use those mistakes as part of the learning process.
  • 5 – Outline and live by an action-plan. Your plan should be a roadmap full of micro-goals with which you can measure your progress.  Your personal action plan should be written out in simple terms which allow you to complete short and intermediate goals.
  • 6 – Commit to remain positive. A positive mindset is critical when you meet obstacles.  If you are surrounded by negative people, change your friends and associates.  You will never be better than your own attitude.  Remove every source of negativity in your life.
  • 7 – Develop personal discipline. Minimize stress from other parts of your life and commit to following your action-plan on a daily basis.  You can measure your success by the amount of time you are following your plan.  When you set a timetable, be realistic in what is required to accomplish the task.  Once you’re committed, follow through on your decisions.

Persistence will determine how and when you will complete your goals.  No truly successful person has ever found success in life without experiencing setbacks, obstacles, or even outright failures.  Success is the byproduct of learning from these mistakes and continuing on.

 

Real Estate Investor Secrets

Real Estate Investor Secrets

It’s true that the vast majority of individuals who initially make the decision to invest in real estate soon fail.  In fact, real estate professionals have found that 95% of the people who start the process to invest in real estate never even make an offer to purchase a property.  Why does this occur?  It all boils down to one simple word – Discouragement.  On the other hand, there are a substantial number of people who decide to invest in real estate, using one or more investment strategies, and they prosper and succeed.  What’s different between these two groups of people?  The second group has learned to control and even eliminate discouragement from their mindset, while the first group hasn’t.

Let’s look at several things that successful real estate entrepreneurs have done that changed the way that they invest in real estate.  We like to call them the 7 secrets that can eliminate that dreaded discouragement for beginning real estate investors.  As you learn to incorporate these secrets into your investment strategy, you will soon recognize the benefit of eliminating discouragement from your mindset.

Secret #1 – Understand your Personal Investment Strategy

Each of us are different and we all have separate talents and strengths.  Some of us are great with numbers, while others are fantastic in developing personal relationships.  Regardless of the differences we have and the talents we share, it’s possible for all of us to succeed in real estate investing, but we need to be aware of our personal strengths and weaknesses.  The goal is to match a separate real estate investment strategy to your personal strengths.  For example, if you have a talent and skill of doing construction work, you might want to consider looking into finding fixer upper properties and flipping them for a profit.  If you are great with numbers and love working with people, you might best look into finding a rental property as your first purchase.

There are basically three major real estate investment strategies that include: rental properties, fixer upper and flip properties, and buy and hold properties.  Within these three major categories, there are multiple individual strategies.  As you begin your real estate investment adventure, you need to select your individual strategy and then begin to do the research on how that strategy works.  It is critical that you understand what to do and how to do it before you do anything.  If you decide to go into rental properties as your main strategy, take the time to learn all you can about the advantages and disadvantages of owning rental property.

Once you have a basic and sound understanding of how a selected real estate strategy works, you need to develop your own approach to the strategy.  We like to call this approach – your niche.  It’s what is going to make you special and help you make a profit from your real estate adventure.

Secret #2 – Create a Roadmap that Will Guide You to Success

Every new real estate investor should start by developing or framing a basic business plan based on the real estate strategy they have studied and chosen to follow.  This business plan is really a roadmap you can follow that will help you overcome obstacles and move towards success.

  • Set Specific Goals.  In essence, this roadmap will contain a list of short-term, mid-term, and long-term goals, all of which will guide you along the path of success. If your chosen strategy was rental properties, specific goals might include items such as; looking as specific properties in your target area, researching rental rates within the target area, identifying funding opportunities that match your credit rating; making the offer, etc.  This list of goals should be written out and be extremely specific in nature.
  • Each goal should have a timeline or timetable attached to it.  You must have a way to measure if you have succeeded reaching the goal. These timelines are not meant to be a constraint on your ability, but rather a way to motivate you to take action.
  • Create Rewards for Completing Your Goals.  Each goal is a step toward your ultimate success as a real estate investor.  Goals are nothing more than dreams if no action is taken, and if you reward yourself for completing the goal, action will usually take place.  For example, one of your goals might be to identify three specific rental properties in the target area.  Once this goal is reached, you might reward yourself with a special night out with your spouse or significant other.  The object is to create rewards that you will remember and enjoy as you reach and complete these initial goals.  If the reward you choose has meaning for you, you will work harder to complete the goal.
  • Establish Danger Points that should be avoided. Your roadmap should list things that can derail your success in real estate.  As you study and develop your personal investment strategy, you should understand all the risks involved and then work to eliminate them.  Some of these dangers signs might be:
    • Don’t over leverage your property.  It’s true that when you use borrowed money or capital to purchase a property, you can magnify your return, but, it’s also true that increased leverage or borrowing can also magnify your risk.  When you decide to purchase a property, you need to be aware of how you are going to repay the borrowed capital.  Every investor needs to control the leverage and not let the leverage control you.
    • Don’t fall in love with the property.  When you become emotionally involved with the property, you begin to make emotional decisions instead of fact based and financially sound decisions.  If you start to believe that you must have a specific property, regardless of the price or terms, you are setting yourself up for both failure and discouragement.  Wise investors always look at the numbers and base their decisions on those numbers.
    • Don’t over rehab when buying properties.  This is especially true for fixer upper properties.  You want to make to make the property as rentable or saleable as you can.  When you over rehab a property, you are spending your profis before you ever get them.

Secret #3 – Continue Your Education

Educating yourself should be a life-long pursuit, and it is extremely important for the aspiring real estate entrepreneur who wants to achieve success.  There is, however, another side benefit of continuing your education about real estate.  Discouragement often appears when things don’t go as planned.  By continuing your studies about real estate investing you will plan better and avoid those pains of anxiety and discouragement.  And when you are already discouraged because things haven’t gone as anticipated, continued education in the following ways will get you back on the path to success.

  • Educate Yourself Through Personal Study. This study can take place in a myriad of ways.  You might start by reading and listening to books written by other successful real estate experts.  Pay special attention to their stories of how they reacted when obstacles appeared unexpectantly.  In addition to discovering that you are not alone in these pangs of discouragement, you will learn specific steps to overcome the obstacles or setbacks that might be causing your discouragement.
    Your personal study should not be relegated to simply reading books.  You should also search out other successful investors and spend time talking to them about their experiences.  These discussions should always be centered first on identifying the problems they may have met, and second, on evaluating specific ways they solved the problems.  Don’t pass on the opportunity of learning about their successes in real estate.A third way to continue your personal education is to meet and greet the experts in the field of real estate.  Leverage their expertise by learning what they do and how they do it.  You may want to meet with well-known appraisers, bankers, and even surveyors.  All of these experts can give you information that will help you identify problems along with the best solutions.  The time you use meeting and interacting with real estate professionals will also teach you multiple languages.  Soon you will know how a plumber, appraiser, banker, title company officer etc. speaks.
  • Find a Mentor. Mentors may be paid professionals or they may just be other real estate professionals who have experienced great success.  When you are just beginning your career in real estate investing, take the time to meet other like-minded individuals in real estate.  When meeting these people, learn to ask questions that are based on specific examples.  You will find that when you ask knowledgeable questions, you will get real world examples of success.  You might find a mentor by becoming an unpaid intern for them.  Offer to do some of their research for them, naturally following their instruction.  As your relationship with a mentor grows, your education will also increase.
    If you have the financial capability to pay for professional mentoring, it can be worth the money you spend.  If you elect to pay for professional help and mentoring, make sure you establish the credibility of the selected mentor.  If you are paying for this valuable service, the mentor should be able to provide references and examples of how they have helped other people like yourself.
  • Attend Training Events.  If you belong to a local real estate investment organization, they will normally have access to local training.  Make sure you attend and take good notes.  These are also places where you might establish relationships with potential mentors.  There are also well qualified national organizations who can provide extremely competent instruction in the specific steps involved in different real estate investment strategies.  Many successful real estate entrepreneurs have found that the money they spent on their education was returned many times over in their personal success.
    There are also credible webinars offered online that can increase your knowledge about real estate.  When selecting a webinar, take the time to assess the qualifications and credibility of the person providing the webinar.  The more you learn, the better you will feel, and the better you feel, the quicker your discouragement will disappear.

Secret #4 – Buy Right

Every smart investor should always make money on the purchase.  This means that they are buying at market or below market.  Naturally, if you can purchase a property below market value, you have built in equity right from the start.  The question becomes, “How do you buy right?”  It starts by using the following simple steps:

  • Know Your Target Market.  If you are buying locally, spend time looking at what other properties have sold for.  It doesn’t matter what people are asking, what really matters is what people are getting for the property.  The saying “Location, location, location” is all important.  Make sure you are comparing apples to apples and not apples to oranges.  Pay attention to where the different properties are located in the area and then compare sales among true like properties.  Once you have established realistic values in a geographic area, then you are ready to start identifying prospective properties.
  • Look for Motivated Sellers. When you are ready to purchase a property, it will pay big dividends to know why the seller is selling the home.  Once you identify a well-motivated seller, you can make an offer that builds in equity for you at time of purchase and likewise get the property sold immediately for the seller.  It’s a win-win deal.
  • Learn to Negotiate. Negotiation techniques can be learned and the time you spend understanding how to negotiate will pay big dividends.  There are training courses and seminars that will help you learn how to do this.
  • Create an Exit Strategy. Many first-time buyers think the exit strategy just means how they can sell the property when they are ready to liquidate the property.  Yes, this exit strategy should be considered when purchasing the property.  You don’t want to buy a property that is a dog and will always be a dog.  You want a property that can be put in a position to be sold with good curb appeal.  Forgetting this fact, is the reason why some investors are discouraged when they are left with a property that is in the wrong location and can’t be sold regardless of the price.
    The second type of exit strategy that must be considered is an exit strategy that allows you to exit the purchase.  If you make an offer on a property and soon find out that it wasn’t what you thought it was when you made the offer, you need to make sure that your offer allows you to walk away.  The “subject to” clauses are an important part of the purchase agreement.  Discouragement can come when you are locked into a bad purchase.

Secret #5 – Follow the Roadmap

Discouragement and anxiety usually appear when the investor has gotten off course in their real estate experience.  These individuals have usually failed to meet short-term or intermediate goals.  Perhaps the individual is discouraged because they haven’t found a great under market property in their local area.  Maybe they are depressed because they haven’t secured financing.  There are numerous reasons why discouragement appears, and in almost all cases it can be traced back to not following a plan and taking action.

  • Match your Roadmap to your Market.  It’s important for you to immerse yourself in the real estate market on a local basis.  Unless you are aware of those things that influence the market, you will be in peril of making decisions that are unwise and possibly fatal.You need to know what things are driving the job market, which schools are best, and where the people are moving to.  Sometimes when you first draft your business plan or roadmap you may not be totally aware of changes that are taking place.  When you become aware of these changes, make subsequent changes to your goals and timetables.  Your discouragement may sometimes be a factor of what is happening around your property and not the property purchase itself.
  • Keep a Real Estate Journal. The best way to keep yourself on track and following your personal roadmap is to record what is happening and what steps you have taken.  It is a good idea to write your specific goals in your journal along with the timeline for accomplishing those goals.  When you meet an objective, write it down in your journal.  You will find that by recording both the positive and the negative things that take place in your real estate adventure, you will have a guide book to help you on subsequent purchases.
    Be honest with yourself when recording both the good and the bad things that take place.  Accuracy in your journal is important.  It has been found that this recording of events reaps rewards.

Secret #6 – Upgrade your Mindset

Your mind is a powerful tool and it can change how you act and how you perceive what is going on in your real estate business.  If you want to eliminate discouragement from your existence, you need to remove those obstacles that influence those negative feelings, but you must also change the way you think.

  • Eliminate Negativity in your Life. It has been proven over the years that we act as we think.  This is true in all aspects of our life and is especially true in the real estate business.  Start by doing simple things such as removing negative words from your vocabulary.  Surround yourself with positive reminders of what you want to accomplish.  If you have decided to fix up a property and flip it, then get a rendering done of what the property will look like when finished, and then put this rendering or picture in plain view.Instead of saying “If this doesn’t work, I don’t know what I’ll do,” replace it with “When I finish this property purchase, I’ll be able to create a regular passive income with that rental money.”  Start looking at what you want to do instead of looking at negative outcomes.
  • Surround Yourself with Like-Minded People. There is nothing that creates more discouragement than “naysayers”.  You don’t want to be around people who will tell you what is wrong with your ideas.  These type people never take action on their own behalf and deep down are envious of your efforts in improving your life.
  • Read Books on Positive Thinking. Books by well-known authors about positive thinking will influence how you think.  And when you start thinking different, your life will be different.
  • Consider Getting Professional Real Estate Help. If you are discouraged because you think you are alone, then maybe you just need to enlist the help of good professional rental management or the help of a good accounting firm.

Secret #7 – Take Immediate Action

It’s no secret that action creates habits and when a habit is fully adopted, the task in question becomes easier.  If you are discouraged, make the decision to do something that requires real action on your part.  If you are still waiting to make your first offer, then go out and make an offer that you don’t even expect to get accepted.  The important point is to make the offer.  And you may be surprised to find yourself in control of a great property at below market value.

One action may not be enough to get rid of the feelings of discouragement.  If you are still feeling discouraged after accomplishing just one of your short-term goals, go ahead and fulfill the action for another goal on your roadmap.  As long as you are acting, you are progressing.  Success in real estate investing is a process and action is also a process.  Make it the same process.

There is nothing that discourages discouragement more than simply taking action.  You have a roadmap to success in your business plan.  If you are discouraged, take the specific action steps you have recorded on your roadmap.  When you act, you really do change things.

 

Your Personal Trainer

Your Personal Trainer

A little while ago I was speaking with a man who owns a personal training company. He is successful and the business is expanding. As I was speaking with him I realized it is possible to draw a lot of parallels between healthy training and trading the financial markets.

Discipline

It takes discipline for a lot of people to maintain a healthy weight, but the secret is really simple. It’s calories in vs calories out. If you take in more calories than you expend you gain weight. If you burn more calories than you take in, you lose weight. Now you could argue for healthy calories vs unhealthy calories but we’re just talking about weight in this example and weight is just calories in vs calories out.

One “cheat day” can ruin weeks of dieting. In a similar manner, one “cheat trade” can ruin weeks, months, or even years of proper disciplined trading. If you want to find long term success in the markets, you cannot afford “cheat trades” that don’t follow your rules.

Routine

Achieving peak fitness requires a commitment to following a routine. The same is true with trading. You cannot afford to take a week off because you were “too busy” or “too stressed.” If you take a week off you are that much further behind in reaching your goals. That doesn’t mean you have to be always trading, but it does mean you have to be always learning and paying attention to the market. It only takes 10 or 15 minutes a day to review the market and monitor your portfolio. Make the time and make it happen or you have no one to blame but yourself if you fall short.

Risk Control

One of the biggest dangers to any fitness routine is the risk of injury. There are steps you can take to minimize the likelihood of getting injured. Proper warmups, proper form and technique, and proper cool down and rest periods can all contribute to minimizing the risk of injury.

In trading the risk we talk about is losing money. Proper analytical techniques, management techniques, and position sizing all contribute to helping prevent catastrophic losses in your portfolio.

Long Term Goals

Your health and fitness should be an ongoing process. Most people who sign up with a personal trainer are looking to accomplish long term changes in their life. There may be short term goals along the way such as running a race or participating in a competition but the real goal is to be as healthy as possible long term.

Trading should be approached the same way. A focus on only short term goals such as weekly or monthly returns can skew your perception of your own success and lead to emotional mistakes. You are probably going to have short term setbacks in trading just like you would in a fitness routine. Keep in mind that you are in this for the long run. A focus on annualized return goals is a great way to keep things in perspective and can help you better handle the short term setbacks.

Summary

Just like anything else in life, if you want to be a successful trader it is going to take discipline, the commitment to developing a routine, risk control, and a focus on your long term goals. Enjoy the process, have fun, and make money.

 

 

 

 

 

Defining Hard Money vs. Conventional

Defining Hard Money vs. Conventional

When doing deals in real estate investing, the time could come when you need to borrow funds to buy, fix and sell a property for a profit or to buy and hold it as a rental. In either situation you can either borrowing the funds from a traditional lending institution, such as a bank or mortgage company, or from private and/or hard money lenders.

In this article I am going to break down the pros and cons associated with each, along with the details of each lending situation.

  • Traditional/Conventional Lenders – These are typically banks and mortgage brokers who require an approval process that can be very involved and sometimes extensive. It involves pulling a credit report for your current credit score, a thorough screening of your current and past financial status, and an evaluation of your total net worth and the cash value of your assets. You need to provide a number of supporting financial documents to show the lender that you are not only qualified but also highly capable to pay back the loan as well as the 10% or larger down payment. This screening process can most often take several weeks to accomplish. Despite these lending standards, an investor might choose this type of loan because of its much lower interest rate (typically below 6-7%) with much longer terms, such as 20-30 year loans.
  • Private and Hard Money Lenders – These are the lenders that real estate investors take advantage of the most. Private money lenders are typically individuals that loan their own money from their own accounts and assets. They usually charge a higher interest rate and points in accordance with what they believe is their risk in the deal. Hard money lenders are more often a group of investors that have pooled their resources to be part of a bigger group. One of the biggest reasons a real estate investor would consider borrowing from either of these two types of lenders is because of the simpler lending requirements. In the case of the conventional lenders, they first look at the financial status of the borrower more than the property. In the case of the private/hard money lenders, they look at the numbers in the deal as well as its profitability. These lenders can provide funds in less than 30 days on a regular basis and in some cases less than 14 days. This alone is one of the reasons this type of lending is so attractive to investors who buy, fix and sell properties. Despite the much higher rates (such as 8% and higher), the terms are usually much shorter and in most cases less than 12 months. Under these considerations investors that are rehabbing properties find this acceptable as they are usually on a much shorter time frame, around 90 days to 6 months, from close to close.

It is always to your advantage to look at all options when it comes to borrowing funds for deals. Always look at your budget and the direction you want to go before deciding which lender better fits your needs.

Workshop Update | Week 2 – Jan 10-11

Workshop Update | Week 2 – Jan 10-11

This week, Response delivered 11 Real Estate and Stock workshops. Our overall customer experience score, for all surveys received, was a 5 out of 5. We saw over 503 students. Here is what some students shared about their experience:

This was phenomenal!” —Emmanuel W.

“I have learned so much more than I anticipated! So glad I came!” —Linda H.

“Mind blowing information presented. Can’t wait to get started.”—Tad M.

Funding – Part 2

Funding – Part 2

Let’s visit a few ways you can find funds to complete a real estate deal.  What about those retirement accounts that aren’t performing as well as you would like?  Sometimes the stock market is up, but by the time you get done celebrating it is down again.

As you advance in years you may start to seriously think about whether you are going to have enough saved to live a comfortable life when you retire.  You can self-direct the money in your IRA, 401(k), or even RRSP (Registered Retirement Savings Plan in Canada), and use these funds to invest in real estate.

Note that it is extremely important for you to consult an experienced administration company that understands the laws and tax implications of self-directed accounts.   Some sites you may want to research are:

www.checkbookira.com

www.accuplan.net

www.mountainwestira.com

www.equitytrust.org

www.newdirectionira.com

The economy will continue to have its ups and downs, as will traditional savings, but people always need a place to live.  Rents stay the same or even increase when home prices drop.  Isn’t that interesting?  So once you have a self-directed account collecting rent, you are pretty darn secure.  That feels a lot better than being at the mercy of what the next election results may do to your savings.

Banks have tightened up their lending, but it is still possible to get traditional mortgages on investment properties.  If your personal financial situation is good, you have the option of mortgaging your investment homes.  Most banks follow the guidelines set by Freddie Mac and Fannie Mae, those big government agencies in the sky.  Therefore, the number of traditional mortgages you can hold is limited.

A good mortgage broker is your best guide.  You can likely find a knowledgeable broker at your local REI Club.  The cost of getting the loan and paying it for a few months can be greatly outweighed by the profit made in reselling the renovated home.

You can also get a mortgage on a property you intend to hold as a rental.  Just be sure you are getting more each month than the payment and other holding costs.

There are literally tens of thousands of banks and credits unions in the U.S. The smaller financial institutions (those with one to five or so branches) have more options for investors.  These local banks have portfolio loans that are kept in a house, meaning they make their own loan decisions over muffins and tea.

They are not bound to follow the guidelines set by Fannie Mae and Freddie Mac.  Go in and talk to these nice people. See what the possibilities may be.

Lack of funds should not be a roadblock.  Think in and out of the box and you will discover sources of funds you may not have previously considered.

Funding – Part 1

Funding – Part 1

For many investors, funding is a bit of an enigma.  Let’s clear the air with a couple solutions.

Let’s begin with no money.  You may even have lousy credit.  Or maybe you have money and good credit but you don’t want to use it or risk losing it.  Begin with wholesaling.

When you wholesale a real estate transaction, you essentially act as a matchmaker.  You find other investors who buy properties for cash.  You talk to these fellows and see what they buy, where they buy, and how much they pay.  Next, you essentially go shopping for them.  Who doesn’t like shopping?

Once you know what your cash buyers want, you find highly motivated sellers with matching properties.  These sellers might have their house listed on the MLS, in which case you will work with a real estate agent.  These sellers might have them advertised as For Sale by Owner (FSBO), in which case you work with them directly.  Or these sellers might not be waving any kind of flag saying “I want to sell my house” until you dig them up with your creative marketing.  You make a lot of offers, which costs nothing.

Once you have a property under contract (the owner has agreed to your price and you have a purchase agreement signed), you essentially sell the deal to your cash buyer for a fee.  You can wholesale, wholesale, wholesale to make money, money, money.

 Or you do have cash…

Now you’ve wholesaled some houses and you have cash or maybe you are starting out with cash.  Cash is king as the saying goes. You can make cash offers, get better deals, and then fix and-flip or hold properties for cash flow for yourself.

You may have sources of cash you have never considered.  One potential source of funds is a Home Equity Line of Credit (HELOC).  Do you own your home?  Is it worth more in today’s market than the balance of your mortgage?  If the answer is yes, then very possibly you could get a HELOC.  This can be a very effective way to use your money to grow more money.  If you took out a HELOC and were paying perhaps 4% interest and you used these funds to purchase, renovate, and resell a house to make a 10-20% profit, you are ahead of the game.  Or maybe you use the funds to purchase a home as a rental and get a 10-15% return on your money.  Again, you are ahead.

In fact, you have created what in the financial world is called “arbitrage,” a profit based on the spread of two purchase prices, or in this case two rates of interest. Just toss that word around at your next REI Club meeting and you’ll immediately sound like a savvy investor

There is a myriad of ways to fund real estate transactions.  These are just a couple.  Make your money work for you! Don’t let lack of funding be a roadblock in your investing endeavors.

Workshop Update | Week 1 – Jan 4

Workshop Update | Week 1 – Jan 4

This week, Response delivered 14 Real Estate and Stock workshops. Our overall customer experience score, for all surveys received, was a 5 out of 5. We saw over 732 students. Here is what some students shared about their experience:

“One of the most informidable and fun seminars I’ve attended. ” —Skylar L.

“You guys are great and inspiring! Thank you for everything.” —T’kya H.

“This event was very eye opening, what a great experience. Thank you.”—Jennifer J.

Why Invest in Real Estate

Why Invest in Real Estate

There are many ways to invest your time and money. You can invest in a variety of investment strategies with banks like bonds, stocks, annuities, interest bearing savings accounts or interest bearing checking accounts, certificate of deposits (cd), and many others. You can invest in the stock market with its large variety of investment strategies. You can invest in IRAs and other retirement funds. All of these and many other types of investments provide ways to make your money work for you.

Real estate investing also has several different strategies that you can use to get your money working for you. Fast cash strategies include buy-fix-n-flips or wholesaling. Creative financing strategies include seller financing or a lease option. Long-term strategies include buying and holding residential or commercial properties. All of these real estate investment strategies are great ways to not only make a lot of money but also to leverage your money as well as other people’s money.

There are many advantages of investing in real estate. Housing is something that everyone needs. Like other types of investments, real estate values go up and down. However, over time, the downs aren’t as low as previous downs, and the ups are higher than the previous ups. Buy-and-hold strategies have the advantage of passive monthly income, appreciation over time, equity, and tax advantages. Fast cash strategies allow you to make a profit quickly and move on to the next deal. Real estate trust strategies allow for consistent income that can be reinvested to continue growth.

Real estate investing can bring you a great return on investment whether the economy is going up or down. Choosing a real estate investing strategy that meets your specific financial goals can be safer than other types of investments, as well as an excellent way to gain true long-term wealth.

 

Helping FSBOs Sell

Helping FSBOs Sell

Selling your house is a big and scary step as it involves a lot of uncertainty. Most people opt for a realtor so that they don’t have to handle the stress and hassle that comes with the sale of a house. Selling a house, yourself is no easy task, but the reward is well worth it. When you sell a house via a realtor, you lose about 6% of the sale price as that is shared between your realtor and buyer’s agent. Therefore, it might be prudent to sell the house yourself so that you get exactly what your home is worth. This process can be daunting but here are a few things that you should keep in mind.

Appraise your house

This task is often difficult because you might be biased towards your house. A good way to properly appraise your house is to look at the listings and pricing of houses that are in your neighborhood. You should also look at houses that are similar to yours and thus you can get a good estimate of what is a fair price on your house. Don’t make the mistake of overpricing because that will send all your effort down the drain.

Market your house

It is also important to get your house out there. To do that you can have someone build you a website or you can arrange for flyers and signs. This will let people know that your house is for sale. This process can be expensive, but it is worth it simply because this is the only way that people will know that your house is available.

Make your house look good

After you have done the marketing, you should start getting calls from people that want to see your house. You need to prepare for this. Give your house a thorough cleaning, hire someone if you must but make your house look the best it can. The yard and fences should also be touched up because that stuff counts a lot. Remember you only get one “first impression”.

Be prepared

Talk to a Real Estate attorney, someone that can help you look over contacts to make sure you don’t miss anything important. Have a title company chosen. Be ready to negotiate.

Success Is Not Final and Failure Is Not Fatal

Success Is Not Final and Failure Is Not Fatal

My parents taught me from an early age that I could learn some of life’s greatest lessons from historical figures and how they reacted to personal challenges. World War II was known as The Great War in Great Britain and Winston Churchill offered some advice gleaned from his role as Prime Minister of England during the War. He said, “Success is not final, failure is not fatal; it is the courage to continue that counts.” Perhaps the major challenge entrepreneurs face today is learning how to treat failure as a blessing instead of a curse.

As the Director of Real Estate Education at Response, I am acutely aware of the fear of failure that many real estate entrepreneurs face as they embark on a new venture. What is most important to remember is that failure is in fact the seed of success. It is a key element in helping us grow, and failure allows us the opportunity to evaluate our personal progress. If it is so helpful, why then, do we fear failure so much? Each of us has an ego. When we fail in any way, we experience shame of some kind. When we learn to overcome the “ego trip” associated with failure, we are well on our way towards eliminating or minimizing the fear of failure.

The first thing we need to realize is that failure is a natural part of the success process. Thomas Edison failed thousands of times in learning how to harness the power of the light bulb. Once he succeeded, he stated, “I have not failed. I’ve just found 10,000 ways that won’t work.” If you are starting a career in real estate investing, you will find some things that don’t work immediately for you. Some people will call these things failures, but I see them as simple steps toward your ultimate success. Remember that Response has an extensive library of training, resources, and strategies that can help you on your way towards success.

Overcoming the fear of failure is a worthwhile goal, but it is also a difficult thing to accomplish when starting a new venture. I’ve found that there are some simple strategies to eliminate the fear of failure. Remember we are not going to eliminate all failure, but rather we are finding a way to dispel the fear associated with it.

  • Strategy 1 – Don’t focus on future failures. When you start thinking about future mistakes as permanent failures, you will do nothing. When this happens, you will regret having done nothing at all. If you spend your time thinking about the failure taking place, you will soon wallow in negativity.
  • Strategy 2 – Become a positive person. Think, act, and speak positive thoughts about your goals and objectives. When you encounter a setback or small failure, look for ways to turn the failure into a learning experience. Visualize yourself turning the experience into a great success.
  • Strategy 3 – Stay focused on your goal. Unless you are committed to achieving your goal, the natural tendency is to do nothing at all. When this happens, you often move away from your goal and put off correcting mistakes.
  • Strategy 4 – Trust your abilities. Don’t be afraid of making a mistake. None of us is perfect and mistakes are part of the process of achieving success. Trust your ability to learn from mistakes.
  • Strategy 5 – Build on past failures. Since we all experience failures, use them as building blocks for a successful future. Review past failures and analyze how to correct the mistakes. Don’t, however, spend time thinking about how the failure made your life worse. You must stay positive when doing any evaluation of past failures.

Yes, failure hurts, and as human beings we spend time trying to avoid failures of all kinds. However, failure can be life’s greatest teacher when we adopt the attitude of Arnold Palmer who said, “The road to success is always under construction.” It is up to you to decide whether your future is one filled with hope and achievement or despair and inaction. Success is not final and failure is not fatal; it is the courage to continue that counts.

Workshop Update | Week 1

Workshop Update | Week 1

This week, Response delivered 5 Real Estate and Stock workshops. Our overall customer experience score, for all surveys received, was a 5 out of 5. We saw over 326 students. Here is what some students shared about their experience:

 

“Very informative!” —Carla S.

This is life-changing.” —Wendle S.

“No regrets, best investment of my life.”—Miguel T.  

Real Estate Investing and Technology

Real Estate Investing and Technology

There was a day when real estate investing was done in person with carbon copy contracts. Just imagine working with a 25:1 acceptance ratio and having to go out and visit each and every property. That was the day where your CRM or lead data base consisted of a three-ring binder or notebook. This process was long and very drawn out, especially in comparison to today.

By simply logging in on the internet you are now able to access a sea of leads and knowledge. Anywhere from pre-foreclosure leads to probate or FSBO. You can also access the processes and information to help walk you through any of these transactions.

You are now able to view homes through pictures provided from online listings. You are able to run your numbers and submit your offers via phone or email.

Marketing online allows you the opportunity to reach out to a larger group of individuals and even customize it to be more direct. Don’t get me wrong, good old door hangers are still a great option, they just take a lot of time and online allows for you to keep marketing even when working on other things. This is a great and healthy form of multi-tasking.

There are tools and resources like software and programs that can be used to help with the process as well, whether it be evaluating a deal or simply data or lead organization. The number of apps that are geared towards this profession are amazing. Apps as simple as a mileage tracker can save an investor loads of time and energy that can now be used for other things.

Technology has made it so that you can invest remotely, or even simply just at home in your jammies at two in the morning. The way technology is changing this field of work is absolutely amazing and I only see it continuing to grow and continue to get better over time.

Why Invest in Real Estate

Why Invest in Real Estate

There are many ways to invest your time and money. You can invest in a variety of investment strategies with banks like bonds, stocks, annuities, interest bearing savings accounts or interest bearing checking accounts, certificate of deposits (cd), and many others. You can invest in the stock market with its large variety of investment strategies. You can invest in IRAs and other retirement funds. All of these and many other types of investments provide ways to make your money work for you.

Real estate investing also has several different strategies that you can use to get your money working for you. Fast cash strategies include buy-fix-n-flips or wholesaling. Creative financing strategies include seller financing or a lease option. Long-term strategies include buying and holding residential or commercial properties. All of these real estate investment strategies are great ways to not only make a lot of money but also to leverage your money as well as other people’s money.

There are many advantages of investing in real estate. Housing is something that everyone needs. Like other types of investments, real estate values go up and down. However, over time, the downs aren’t as low as previous downs, and the ups are higher than the previous ups. Buy-and-hold strategies have the advantage of passive monthly income, appreciation over time, equity, and tax advantages. Fast cash strategies allow you to make a profit quickly and move on to the next deal. Real estate trust strategies allow for consistent income that can be reinvested to continue growth.

Real estate investing can bring you a great return on investment whether the economy is going up or down. Choosing a real estate investing strategy that meets your specific financial goals can be safer than other types of investments, as well as an excellent way to gain true long-term wealth.

Exercise Danger!

Exercise Danger!

Would you ever sign a contract without knowing what you were signing? Hopefully the answer is no. Remember when you are trading options that you are signing a contract.

The simplest definition of an option is that it is a contract. Contracts have rights and obligations.

An option contract is the right to buy or sell an underlying security at a set price on or before a set date. For example, we may buy an option contract that gives us the right to purchase shares of a stock for $50 per share at any time within the next 90 days. In this example $50 is the strike price and the expiration date is in 90 days.

Exercising an option is the terminology used when putting into effect the conditions of the contract. In our example, we have the right to purchase a stock for $50 per share. If we exercise our right, we are choosing to purchase the stock for $50 per share. A standard option represents 100 shares of stock so that would cost us $5,000 plus whatever fees and commissions we owe.

There are two common types of equity options. European style and American style. American style options can be exercised at any time up to expiration. European style options can only be exercised at expiration. Most stocks and ETF options trade American style. Most index options trade European style. You should contact your broker if you are not completely sure which type of option you are trading.

Most options are not exercised. They either expire out of the money or are offset by closing positions prior to expiration. Most options that do get exercised get exercised at expiration, however, early exercise is a possibility on American style options.

The OCC (Options Clearing Corporation) uses a process known as exercise by exception to exercise options at expiration. Simply put, options that are in the money by the threshold amount will be exercised at expiration unless the OCC is instructed otherwise. Since June of 2008 the OCC has had an exercise threshold of $0.01. That means any option that is in the

money by $0.01 or more will be exercised at expiration unless the OCC is instructed otherwise. Individual brokerage firms may have a different threshold for exercise from the OCC.

Generally speaking it is safe to say that options that are in the money will be exercised at expiration. If you are unsure of whether your option is in the money or not please don’t hesitate to reach out to your broker for additional assistance.

Managing Trades

It is critical that we are aware of exactly what we are investing in. Since options are contracts we need to be sure that we understand our contractual rights and obligations. If our options are in the money at expiration they will be exercised.

For example, if we own a long call at expiration and it expires in the money we will end up buying the stock at the strike price of the call. We would then be responsible for the full risk of the stock position.

If we are short an in the money call at expiration we would be obligated to sell the stock. If we already own the stock then we have to sell it. If we don’t own the stock then we have to borrow the stock from the broker and sell it anyway. This means we are short the stock and are responsible for the full risk of the short stock position.

Early Exercise

American style options can be exercised at any time. Options that are deep in the money have a higher chance of getting exercised early. This is because they are made up of mostly intrinsic value. If an in the money option has little or no extrinsic value remaining then it has a high chance of being exercised early.

Let’s say we sold a $45 strike call. The stock is now trading for $50 per share. The call option is trading for $4.85 per share. The buyer of the call has a choice. They can choose to sell the call for $4.85 or they can exercise the call and purchase the stock for a $5 discount. Mathematically it makes sense for them to exercise the call early. As the seller of the call, we would be obligated to sell the stock for $45 per share. This could happen at any time. This is why it is so important to manage our trades properly and be aware of our contractual rights and obligations.

When we short a call we are also exposed to dividend risk. Since selling a call requires us to sell a stock if exercised we could find ourselves short a stock through a dividend. When short a stock we are responsible for paying that dividend to the owner of the stock we borrowed. If the dividend payout on a stock exceeds the extrinsic value of an in the money calls corresponding put, then that call is in danger of getting exercised early.

Let’s say there is a $50 stock that is issuing a $1 dividend. We own a $48 strike call on that stock. If the $48 strike put is trading for less than $1 then our call is in danger of getting exercised early for the dividend.

Education

Options useful tools when used properly. As option traders it is our responsibility to master the

fundamentals of options; be aware of the contractual rights and obligations involved in options, understand how options are priced, master risk management techniques, master basic option strategies such as long options and covered options, and learn vertical spreads and other more advanced strategies.

Most importantly, control risk. Options are leveraged instruments and leverage works both ways. Know what the maximum loss is. Don’t invest with money you can’t afford to lose. Don’t be intimidated by options. They are wonderful tools. Have fun learning, be safe, and allow us to assist you in this journey.

Workshop Update | Week 50

  Workshop Update | Week 50

This week, Response delivered 15 Real Estate and Stock workshops. Our overall customer experience score, for all surveys received, was a 5 out of 5. We saw over 593 students. Here is what some students shared about their experience:

 

Fabulous event! Can’t wait to get started.” —Marty B.

“I had a wonderful three days. The staff was very professional and my eyes have been opened financially.” —Gift C.

“Very good, informative, inspiring and motivating. .”—Amechi O.

 

The TLC Your Garage Deserves

The TLC Your Garage Deserves

The first part of your home you step foot in is most likely the one you give the least attention to. This first impression of your home can not only have a strong psychological effect on your personal mood and perspective, but it can also equate to more tangible damage, in the form of diminishing financial value. That is why 82% of 500 realtors surveyed stated that a disorganized and messy garage has a considerably negative impact on potential home buyers (Braun Research survey). Here, we examine a few of the most common long-term effects of a neglected garage and how we can begin to quickly address them while transforming your garage into a portion of your home you want to show off.

 

Cracks in flooring

One of the most common issues that arise in a garage are cracks in the flooring. We’ve almost accepted them as inevitable, but the truth is they don’t have to be. Cracks in the floor are most commonly caused by things like shrinkage, settlement and exposure to cold and frost. They also have real effects and are subject to regulation, as demonstrated in industry standards manuals everywhere. The real issue with cracks is the extra damage caused by water seeping into them followed by freezing occurring in the winter time, which can cause expansion and excess pressure against the garage slab. This can lead to excess cracking and heaving. Try to eliminate exacerbating these cracks by utilizing a garage floor mat in your garage.

 

Staying organized

The clutter overflows, spring time comes around, and we finally decide to spend a day solely devoted to cleaning out the garage. The only problem is, this is a band aid on a larger issue, as next spring we will be doing the same thing. Sound familiar? One way to help with this is installing garage organizers. Purchasing some storage shelves and cabinets go a surprisingly long way in keeping your garage clean and clutter free. Just having the ability to put items away in a specific place instead of stacking them on top of each other leads to a more habitual upkeep of your garage, ensuring it stays organized.

 

Outdated or broken garage door openers

As with all technology in the last two decades, developments have been consistent and continuous. A unique issue has risen with garage doors, as they aren’t as easily replaceable as an iPhone or a pair of headphones. They also aren’t anywhere near the top of our list – until they are. Having an updated and fully functional garage door system is a necessity in this market, and goes a long way as far as presentation. They are after all, one of the most frequently used doors in the home.

 

You’ll find it surprising how tending to just these three simple aspects of your garage can be completely transformative. Potential buyers will see your house as much more valuable, and you’ll also feel significantly better as you return home every day. You may even be able to make it to the door without having to avoid stepping on any old toys or furniture

Overcoming the Fear of Making Offers

Overcoming the Fear of Making Offers

The first thing required to make deals in real estate is to overcome the fear of doing what is necessary to get properties under contract. Only then can you sell a property to willing buyers.

Obviously, if you don’t make offers, you won’t get deals. Having a “due diligence clause” and an assignable contract should help because you can sell the contract to a buyer if you find one or get out of the deal if you can’t without costing yourself any money.

For some people doing deals comes easy. Some investors even make money without using any of their own. The way to make money starting off without using your own money, or by using very little of it, is to get properties under contract and then sell those contracts to rehabbers or landlords and landladies.

Even if you only buy a home to live in, the home appreciates as the years go by and equity is gained as the mortgage is paid down. Naturally, most investors want to make more money and gain faster returns than just that.

The concept is simple: buy properties for less than you sell them for. When wholesaling you don’t even have to buy the property. Just get the property under contract at a price that allows a rehabber to buy the property from you at a higher price so you can make some money. By having a property under contract you have the right to purchase it if you so choose or you can turn those rights over to a buyer. As an exit strategy you should have a “15-day due diligence” clause. Never forget that this is how you protect yourself if you can’t use or sell the property.

The best way to remove the fear of making offers is to have a “due diligence” clause that allows you to get out of any deal for any reason during the time period of the clause. Here is an example of an effective due diligence clause that will allow you to just walk away as long as you exercise the clause with written notice as indicated in the clause itself: “Commencing upon receipt by Buyer’s Agent of a mutually executed Agreement of Sale, a Fifteen (15) day period shall begin (the “Due Diligence Period”) during which the Buyer shall have the right to carry out and perform all reviews and investigations deemed necessary by Buyers, including, without limitation, a physical review and inspection of the conditions of the buildings and the soil, environmental inspections, review of title, review of zoning, and review of any permits and approvals for property deemed necessary by Buyer. If Buyer, in its sole discretion, is not satisfied with the review, evaluation or investigation during the Due Diligence Period, Buyer may terminate this Agreement by written notice to Agent for the Seller prior to the expiration of the Due Diligence Period, and at such time, shall receive back deposit and neither party shall have any further obligation hereunder. If such notice is not given, this Agreement shall continue in full force and effect in accordance with its remaining terms.”

 

As you can see from the due diligence clause, there is nothing to fear. But, you may decide to be fearful anyway. If so, it is time to do a little soul searching. We can help. Give us a call on the Advisory Line.

Workshop Update | Week 49

Workshop Update | Week 49

Our overall customer experience score, for all surveys received, was a 5 out of 5. Here is what some students shared about their experience:

“Amazing class! I am very excited to start investing and learning more.” —Garrett J.

“Great training! Information was valuable and presented in an easy to understand format.” —Cristina Bolis.

“I’ve learned so much in such a small time. I plan to get additional training so I can excel at it and change my life.”—Mark M.

Food Drive for Tabitha’s Way Food Pantry

Food Drive for Tabitha’s Way Food Pantry

Tabitha’s Way provides food and supplies to an average of 5,000 individuals monthly.

Food Drive

https://player.vimeo.com/video/305595077

On December 7, 2018, Response participated in a food drive for Tabitha’s Way, and donated 2,978 pounds of food!

Tabitha’s Way got its start when God put it on Wendy’s heart that help was needed for the less fortunate in Utah County’s south valley. After much prayer and fasting, Wendy decided to quit her successful career in Telecommunications and start Tabitha’s Way.

Tabitha’s initially started in a small space at 200 North 37 West in Spanish Fork. After a little more than a year, Tabitha’s moved to its current location at 140 North Main Street.

Today, Tabitha’s provides food and supplies to an average of 5,000 individuals monthly. We recognize that the ability to provide these services through the support of the community and by countless businesses.

Tori B., Food Drive Coordinator, Tabitha’s Way, reports:

“We are very grateful for all of the donations from Response and will be using them to help the less fortunate here in Utah.”

Tabitha’s way is just one of many organizations where Response volunteers for. See a list of others here.

Link to Tabitha’s Way

Breathing and Counter Trend Lines

Breathing and Counter Trend Lines

Most people, in order to survive, rely on the age old practice of breathing. This breathing process adds oxygen to our lungs and eventually to our blood where it can invigorate and assist our bodies. Breathing involves both breathing in and breathing out. Some people can breathe in and hold their breath for long periods of time.Many stocks follow this same breathing pattern. They move up for a period of time and then move back down, just not as far. This pattern is known as an uptrend. Once an uptrend has been established, traders may want in. Establishing an entry is a key facet to any trading plan, especially traders who want to be consistent and disciplined in their approach. One type of entry that waits for the stock to stop breathing out and tries to catch it just at the switch to breathing in is Counter Trend Lines.

In order to understand counter trend lines, we first need to understand a trend line. A trend line is a line drawn on a chart that connects a series of higher lows or lower highs. This line is important for 2 reasons. The first reason is the line represents the trend. The second is that when the line is broken, that trend is over.

The rising dark trend line in the chart represents the trend. This is also the base line for breathing. It is connecting the previous lows and demonstrates rising support. Remember support is drawn as a general area, so it will not always align perfectly. Also remember, the trend line should include almost all of the price action. It would look something like this:

counter trend lines

Now that we have an established trend, we can begin to notice the counter trend lines. Counter trend lines are drawn when 3 or more points on the chart, usually daily highs, lows or closing prices align. They are connected with a line that is traveling in the opposite direction of the overall trend. In the example listed, the down red lines are the counter trend lines. The consistent and disciplined entries happen when the stock or ETF in question closes above the counter trend line. Thus the dark line is the breath in and the red lines are the breathing out. Not all stocks or ETFs trade this way so make sure it fits as you begin to apply this strategy.

Instance #1 is where is the stock tops and then begins to drop for 3 days and then goes back and forth for a few days until it clearly breaks the line after threatening to break the line the day before.

Instance #2 is the worst of the bunch. As the stock topped and pulled down for a few days it gapped down and then went sideways until it broke back up, without lining up too many highs or lows.

Instance #3 is a little way away from the uptrend line but it is the instance where the price clearly started below the line and clearly closed above it at the end of the day. In the book Technical Analysis of the Financial Markets John J Murphy states “a close beyond the trendline is more significant than just an intraday penetration”. With this being the case, one could have gotten in at the end of the day with limited risk.

Instance #4 took a lot longer time to play out. It did pull back the furthest but it also touched the uptrend line and showed strength, bouncing off of it. It then continued it’s up trend.

As you look to apply this concept remember the keys to drawing trend lines are: 1 Connect multiple points (at least 3, the more the merrier) 2 Draw trend lines that are relevant to current price. Best of luck in your continued breathing and trading!

Follow “No-Fail” Checklist When Purchasing Your 1st Rental Property

Follow “No-Fail” Checklist When Purchasing Your 1st Rental Property

Every new real estate entrepreneur needs to understand the concept of “No-Fail.” Real estate investments have been proven to contain significant advantages in providing a way to both earn financial rewards as well as to protect personal assets. In the world of financial investing, there is no such thing as being a true “No-Fail” strategy. There are risks associated with all real estate investments, but rental property can be purchased in such a way as to approach the threshold of being a “No-Fail” strategy. In order to take full advantage of the benefits of owning rental property, it is recommended that the beginning real estate investor consider drafting and following a 7 Step Checklist when purchasing that 1st rental property.

Purchasing Your 1st Rental Property

Step 1 – Understand the Case for Owning Rental Property. When you make the decision to own rental property, you need to be aware of both the advantages and the disadvantages associated with this investment strategy. Yes, there are risks associated with rental property. Many of these risks can be reduced or even eliminated when a “No-fail” approach to ownership is adopted.

SEE ARTICLE “Understanding the 5 Risks of Investing in Real Estate

As we examine the benefits you receive by owning rental property, you will quickly realize that there are five power advantages that should be important for almost all real estate entrepreneurs.

  1. Power Advantage of Leverage. Leverage can best be described as using financial instruments or borrowed capital to increase the potential return from the investment. If you own a rental property that increases in value by six percent and you had purchased that property with “all cash”, your return on investment for that period of time would be six percent. However, if you had put down a 20% down payment and the property increased in value by the same six percent, your actual return would on the investment of 20% would be five times the original amount. This same power translates across all the real estate investments and is especially true for rental properties that generate a positive cash return. Keep in mind the fact that as you increase the leverage, you also increase your risk. A good rule of thumb is to keep the leverage at a level that allows you to be positive cash flow on the property.
  2. Power Advantage of Potential Tax Free Cash Flow. Every investor will have individual tax issues, but rental property has the ability to allow the investor to receive a positive cash flow while still being able to deduct depreciation and other expenses that in essence creates free cash flow.
  3. Power Advantage of Tax Deferred Investment Growth. Rental property will generally increase in value as a direct correlation with the increase in rental income and profits. While the property increases in value in real time, your tax obligation will not accrue until you dispose of the property.
  4. Power Advantage of Appreciation. As you pay down the loan on rental property, the rental property will actually increase in value. This power has been demonstrated long-term across almost all properties. The one major caveat to remember is that you must select the right property at the time of purchase. Rental property can in effect produce equity for the future.
  5. Power of Cash Flow for Retirement. Tenants pay rent, which increases in amount over time. This cash flow continues and increases in size as the rental rates increase. Well-selected rental properties can provide a retirement income.

Step 2 – Evaluate Your Personal Situation. The decision to own real estate comes with responsibilities and that is especially true for owning rental property. Even prior to beginning your search for the perfect property, you should examine two areas of your life.

  1. Personal Abilities and Desires. As soon as you purchase that first rental property, you take on the responsibilities of being a “landlord.” There are ways to mitigate this responsibility when you are in the position of obtaining professional management.SEE ARTICLE Five Keys That Can Open the Door to Professional Rental Property ManagementYou should be realistic when purchasing that first property by realizing that you will be a landlord with “hands-on” responsibilities at first. Yes, it may seem daunting, but the rewards can be significant. Ask yourself the following questions and decide if you are personally ready to get started.Purchasing Your 1st Rental Property
    • Do you want to be a landlord?
    • Do you have the experience to do the repairs or can you find someone who can?
    • Do you have the time to collect rent, do marketing, and complete repairs?
    • Can you manage that first rental by yourself
      It is important that you be realistic in answering those questions.
  2. Personal Financial Situation. When you purchase that first property you will be incurring added financial responsibilities. In order to make the purchase as “No-Fail” as possible, you should take the following actions:
    1. Pay Down Debts. If you have outstanding credit card obligations and short-term debts, you probably have large recurring expenses. When you purchase that first property you will most likely have additional expenses that need to be paid. If you are financially burdened by debt, you may not be able to make these expense payments on time, which will put your new rental property investment at risk. As much as possible, try and pay down your short-term debt. The more you do this, the better equipped you will be to make your rental property purchase a success.
    2. Secure Cash Requirements for the rental property purchase. In most cases, this is the down payment required to purchase the property. Additionally, you will need the earnest money deposit along with funds for immediate repairs and improvements to the property that will help in securing rental tenants. Don’t go into a rental property without the funds necessary to complete the purchase and get the property leased.

Step 3 – Find “No-Fail” Properties. Not all rental properties are equal in value and not all such properties make good first purchases. As a new real estate owner, you need to find the best properties that will attract the best tenants who will pay the highest rent. Because this is your first rental property, you need to decide whether you are looking for a single unit or multi-unit purchase. In most cases you will be safer in finding a great single-family home as your first purchase.

Single family homes have the advantage of requiring just one tenant, while multi-unit properties will need to be filled with more tenants. You will want to find a perfect tenant for the purchase and it is easier to find one great tenant than many great tenants. As you experience success with your first purchase, you will soon learn the skills to find more and more great tenants. Keep in mind the fact that when you purchase a single-family property, repairs are less, there is less upkeep and management involvement is much less.

Purchasing Your 1st Rental Property

When searching for the great “No-Fail” properties, it is important to remember that location is extremely important. When future tenants choose between comparable properties, they will compare them the same way you would if you were looking for a new home for your family. Search for properties that meet the following guidelines:

  • Near to Quality Schools. It has been proven that young families use the proximity to good schools as a major factor when choosing a home or rental. The closer you are to great schools, the faster your rental will lease up.
  • Near to Shopping Districts and Malls. If you can find a rental property that is within walking distance to good shopping, it is a plus.  When you separate yourself from the shopping, you are eliminating much of your market audience.
  • Close to Amenities. Your new tenants will want to be close to amenities like movies, entertainment, fitness centers, day-care, and personal services.
  • Near to Job Opportunities. If you can find a property close to major employment opportunities, you will increase your potential list of possible tenants.

Purchasing Your 1st Rental Property

Don’t forget the condition of the property itself. The more desirable the property, the greater chance for finding a great tenant.  Unless you are specifically searching for fixer-up properties, stay away from properties that need major repairs. There is a major difference between choosing a “fixer-upper” and being dumped into one when you weren’t looking for one. Make sure you know what you are getting by getting a competent house inspection.

Finally, look for a home priced below market with minimal repairs. A little bit of paint can go a long way. Curb appeal is important.

The best “No-Fail” property is one that can be purchased below market value. We don’t recommend buying in blighted areas or in economic distressed areas. Rather try to find a property that meets the criteria of a great property that can be purchased at a reasonable price. Your ability to negotiate is important in finding the right “No-Fail” property.

SEE ARTICLE Negotiation Real Estate

Step 4 – Believe the Numbers. If you are purchasing a property that has been used as a rental prior to your purchase, make sure you get access to the true expenses and rental payments on the property. If there have been major repairs made to the property, you need to know what they cost. Numbers don’t lie.

Start by doing an accurate proforma on the property in question.  If you enumerate all the potential expenses before you start calculating the rents, you will be more in line with real world figures.  Make sure you include all the expense items as well as a reasonable reserve for repairs.

Purchasing Your 1st Rental Property

Unless you have a property that is already rented, you will need to use rental income that is accurately based on comparable properties.  Look for other rentals in the area and your projected rental rates will be more accurate.

When completing the property analysis, you should avoid extreme assumptions on both the expenses as well as the income. The more accurate you make your analysis and pro-forma, the more realistic you will be in determining value. In the end, the key is to do the math.

Step 5 – Draft a “No-Fail” Contract. Once you have identified a great rental property, you need to negotiate a contract that will give you the highest probability of making a regular recurring profit and positive cash flow.  What you agree to with the seller of the property must be codified in writing as part of the earnest money agreement and subsequent closing documents.  The exact terms of your “No-Fail” contract will be determined through your negotiation process.  There are, however, some key elements to consider when drafting your agreements.

Purchasing Your 1st Rental Property

  • Determine Who Is Purchasing the Property. It sounds simple to say that the answer is yourself, but, you need to determine how you will take title to the property.  A great many real estate investors have found that they can establish a fence of litigation protection by taking title to the property through a properly organized LLC or Corporation.  If you are unsure of how you are going to take title to the property, a good option is to make the offer “under your name and/or assigns.”  If the seller questions why you put “and/or assigns”, you can honestly answer that you are consulting with your legal counsel on the best way to hold ownership.  One final thought on taking ownership is to allow yourself the option of bringing in a partner if the need arises.  The “and/or assigns” allows you to have this option.
  • Acquire Competent Legal and Brokerage Help. If this is your first rental property purchase, getting proper professional help for the final legal agreements is a priority.  Don’t make the mistake of thinking you know everything.  This contract is the key to setting up your future, so don’t skimp on the expense.
  • Allow Proper Timing for Closing. Once you secure the property through a well-drafted earnest money agreement, you will want to begin the process of finding tenants, preparing for needed repairs, and finishing your due diligence.  Make sure you have left enough time to get this done.  Finally, try and avoid the clause “time is of the essence” unless your legal professional has some sound reasons.  If the seller includes this clause and for some unforeseen reason you are unable to close by that specific date, the seller would be able to sell the property to someone else.  Remember, you are looking for properties priced below market and you don’t want to lose the deal because you are a day late in closing.
  • Include Escape or Exit Strategies. It is doubtful that you have been able to complete a full due diligence on the property when you make the offer, and you want to ensure that you can get out of the deal if the property isn’t what you thought it was.  You also want to make the offer “subject to” your financing unless you have already make financing that won’t fail.  The “subject to” clause can apply to financing, approval of a property inspection or a myriad of other things such as property zoning for rentals.  This is especially true if you are purchasing a property for short-term rentals and you aren’t sure if they are permitted in that area.
  • Include Access to Existing Property Expenses and Rental Documents. If the property has been rented in the past, you want to verify both the rental contracts as well as existing utility expenses, taxes, repairs etc. Even if the property hasn’t been rented before, you will want to review these same items.
  • Include a Survey and Property Inspection in the Agreement. You want to make sure that you are in fact getting everything you think you are getting.  The survey will document the physical aspects of the property and the property inspection will ensure that needed repairs are addressed as part of the purchase.
  • Include a Clause That Allows You to Start Showing Property to Prospective Tenants Prior to Closing. Your goal should be to have tenants in place as soon as you take ownership of the property.  If the property is not presently rented, make sure you can show the property to prospective tenants even though closing hasn’t happened.  Keep in mind the fact that your rental agreement will also be “subject to” closing on the property.

Step 6 – Identify “No-Fail” Tenants. Your future tenants are in fact going to pay off the loan on the property through their rent payments.  This being the case, you want to make sure that you can find the best tenants as possible.  If the property is presently being rented, take the time to interview the existing tenants and to verify their payment history.  If you are going to change the rent amount, you will want to see if the existing tenants will balk at the increase.  During the time you will own the property, you will undoubtedly need to find new renters.  The following tips will help select tenants who will protect the property, keep it in good repair, pay their rent on time, and avoid disputes.

Purchasing Your 1st Rental Property

  • Start with Verified References. Ask prospective tenants for three to five references.  If they have rented previously, ask for the information as to that property.  Then follow up with the references and ask probing questions like:
    • Did the renter pay rent on time?
    • Did the renter do minor repairs and keep the property in good shape?
    • Were there any disputes between the renter and neighbors?
    • Were there any legal problems with the renter.
  • Ask for Social Security Information and Get a Credit Report. Avoid Prospective Renters with Past Delinquency Issues.  This pertains to both past rent problems as well as credit issues.  If the prospective renter has a poor credit rating, chances are that your rent will be late or non-existent.
  • Ask for Employment Information. If the renter has a good job, then your rent will be a lot more regular.  In addition, the renter will not like a bad report to get back to his employer that he is not paying rent on time.
  • Do a Personal Interview. Don’t just accept anyone as a renter.  If possible, you want to make sure that you are getting people of good character.  When you interview them, take the time to find out their interests and hobbies.  Doing so will help you avoid having a renter dismantle a motorcycle on your new carpet, which I can tell you has happened.
  • Offer a Discount for Auto Payment of Rent. This discount will pay for itself each month.  The auto payment from their checking, savings, or credit card should also have a substantial penalty if the payment is not made or refused because of insufficient funds.
  • Require a Reasonable Security Deposit. When taking the deposit, you should specify how the deposit will be refunded and what charges will be taken from the deposit.

Step 7 – Prepare Yourself for Ownership. The purpose of a great “No-Fail” checklist is to ensure that your rental property purchase provides a long-term positive return.  Once you close on the property, your ownership responsibilities will fall into two different categories.

  • Management Responsibilities. As soon as the closing takes place, you will be a landlord and will assume ultimate responsibility of managing the property.  If this is your first rental property, you don’t have to start from scratch.
    • Enroll in rental property associations. These people will have suggestions on management based on personal experience.
    • Read books on rental property management. There are numerous books online and in the bookstore that include sample forms and ideas on keeping the books and being a landlord.
    • Attend seminars and webinars on property management. These forums will provide advice and guidance.  Pay special attention to new ideas on increasing cash flow through management techniques.
    • Become friends with other rental property owners. If you are purchasing a property in an area surrounded by other rental properties, find out who the other owners are and meet with them.  Become friends and accept their help when first starting out.
    • Start looking at professional management. If you have chosen a great “No-Fail” property, you will soon be looking at a second and then a third property.  It won’t take long and you will realize the value that comes with well-chosen professional management.  When the time comes that you are ready for professional management, you will already have someone in mind.
  • Financial Responsibilities. Yes, your tenants will be paying you rent and helping you actually pay down the loan on the property, but you will need to be prepared to pay for repairs etc on the property.  Make sure that you have the financial resources to make these payments.  Financial preparation is the key to finding both short and long-term success in rental properties.

Your success as a real estate investor in rental property can be increased dramatically by avoiding the dangers that come by being unprepared.  This checklist can be your guide to finding “No-Fail” rental properties that create wealth and prosperity.

Purchasing Your 1st Rental Property

Understanding the 5 Risks of Investing in Real Estate And How to Combat Them

Understanding the 5 Risks of Investing in Real Estate And How to Combat Them

In today’s tumultuous times, investing in real estate may very well be your best bet in protecting your future while at the same time creating new streams of income.  On the other hand, real estate investments don’t come without risks and the unforeseen dangers of foreclosure and the loss of capital.  Just as there are potential advantages and benefits associated with real estate, the perils of real estate are also real.  Each real estate strategy has specific risks associated with the investment method.  Every real estate entrepreneur should take the time to evaluate both the real estate itself as well as his or her investment temperament.

There are five major categories of risk associated with most real estate strategies. When you fully comprehend the dangers, you will be prepared to confront these risks and use real estate as a tool to create wealth and establish new streams of income.

Categories of Risk Associated with Real Estate

  1. Risk of Unpredictability. The future is unknown and you can’t determine in absolute terms what will happen to any specific property at a future date. Long-term historical data has shown that real estate has appreciated, but the rate of appreciation has varied and at times has even dramatically dropped in value.  When you purchase a property, you control the asset without any ability to control outside factors which can determine the value of the property.  Even when you purchase the property you may believe that you understand all the information about it, but experience has proven this to not always be the case.  There are unexpected events or undisclosed facts that may appear.  Naturally you try to minimize these factors, but it may not always be possible to do so.
    1. Economic Downturns. Recent history has shown that when the economy stumbles or even collapses, so do real estate values.  Thousands of home owners found themselves owing more money on their homes than they were worth.  When you are upside down like this, the value of your real estate can fall dramatically.  Historically, the values have returned to their previous values and even appreciated, but if you weren’t prepared for this situation, you would have lost money.  These economic downturns can happen on a nationwide basis, but far too often take place on a local or regional basis.  If a major employer closes or moves to another location, there are naturally more properties that come on the market, which in turn can cause values to decrease.  It’s all part of the supply and demand cycles.  When demand exceeds supply values increase, and when the opposite happens, values can also decrease.  Good real estate markets are best characterized for having strong occupancies and regular increasing rents.  When a downturn occurs, occupancy rates fall and rents decrease, which in turn can lower real estate values.
    2. Interest Rate Fluctuations. The majority of real estate today is purchased using other people’s money through loans.  These mortgages are secured by the properties themselves.  These loans are based on interest rates that can change with major impacts on both cash flows and corresponding property values.  When you purchase a property, through a bank or a private lender, it is imperative that you protect yourself from interest rate increases.  Many real estate purchasers were unprepared for large balloon payments or the requirement to refinance the property under the original mortgage.  When this situation occurs and you are unable to meet the terms of the mortgage agreement, you can face the condition where you are forced to sell the property at a reduced price.  Whenever possible, you should lock in long-term stable interest rates on your loans.  Failure to do so is disaster waiting to happen.
    3. Changing Demographics. With urban development comes change and the changing demographics associated with “Baby Boomers” and other age groups, real estate values can change unexpectantly.  The demographics of a certain location may include the need for more rental housing while other demographics may suggest investing in other commercial ventures.
    4. Legal Entanglements. Because you control the asset, the real estate could become at risk through legal disputes that may occur against you.  You can also be subject to risk associated with accidents that may take place on the property itself.  Additionally, there may be zoning or similar issues that could create some form of cloud against your property.  Finally, we seem to live in a litigious society where lawsuits are far too common.  Fortunately, most of these types of issues can be combatted effectively when choosing the right professional and legal help.
  2. Risk of Negative Cash Flow. Negative cash flow can be the demise of the unwise and ill-prepared real estate investor.  When cash out exceeds cash in, you have a situation that may be short-term, but can be the start of long-term financial headaches.  There are many reasons for this condition to occur.
    1. Rental Property Negative Cash Flow. When you purchase rental property and the expenses; such as interest, maintenance, repairs, and management exceed your rental income, you face negative cash flow.  In some cases, this situation is a short-term occurrence, while oftentimes the negative cash flow is ongoing.  When this happens, you may face the problem of finding outside capital to finance the short-fall.  Failure to prepare or to avoid this dangerous situation can ruin you.  It’s critical to complete an accurate property analysis prior to purchase of the real estate.  Once this is done, you need to evaluate your personal financial situation.  Negative cash flow from rental property can be reduced or even avoided completely by using proven real estate strategies developed by professionals.
    2. Land Negative Cash Flow. Many real estate investors purchase land on the expectation of increased appreciation.  This increase may happen through inflation or when urban development encroaches on the property or zoning laws are changed.  Regardless of the reason for the appreciation in value, you may have interest or loan repayment obligations, along with other expenses such as taxes.  In these cases, you can immediately experience negative cash flow without any income to offset the expense.  Holding land for resale can be an effective real estate strategy, but you must be aware of and prepared for the potential negative cash flow.
  3. Risk of Liquidity. Real estate is often categorized as a hard asset, and as such it may be difficult to get needed cash from the property in a short period of time.  Real estate loans and the sale of the property itself can provide the cash liquidity you desire, but there is always time required to complete these transactions.  When purchasing or controlling real estate, make sure you are aware of your personal liquidity requirements as well as that of the property itself.  It is important to prepare for needed cash infusions into the property as well as to insure that you can meet your personal financial obligations.
  4. Risk of Depreciation. This risk has nothing to do with depreciation schedules for taxes and accounting.  Rather we are referring to the situation where the property actually decreases in real value.  Even though this is a less frequent risk in a good economy, it can happen.  Property values can decrease when interest rates are increasing dramatically, when there is damage done to the structures on the property, when zoning laws are adopted that decrease the uses of the property, or when the economy itself suffers.  These risks can be minimized or reduced by wise purchases and through the use of professional help.
  5. Risk of Management Problems. Almost all real estate requires management of some kind.  Rental properties require more management than holding land for resale.  Even if you are just doing a “fix up” on a property there is management involved.  Management of real estate can be done by the investor, property owner, or through professional management concerns.  The potential problems associated with management of rental property generally involve tenant problems and repairs.  As the real estate owner or controlling party, you will need to be prepared to meedd these management problems and expenses.

These risks are real and happen on a frequent basis, but there are proven strategies that can reduce these risks dramatically or even eliminate them altogether.  Here are 5 proven strategies to avoid real estate risk.

Five Strategies to Avoid Real Estate Risk

  1. Complete a Property Analysis. As an investor in real estate you must start by completing a comprehensive and accurate property analysis.  Regardless of the investing strategy you are using, you must start by accumulating accurate complete information about the property itself.  You want to understand the history associated with the property and all expenses, past and present, that can impact the value of the property.  Don’t rely on the previous owner’s representations.  Take the time to consult tax records, property management records, and local zoning and urban information.  Eliminate the unexpected by doing your ground work before purchase.  Numbers don’t lie.  Spend the time doing a complete analysis of the property using the investment strategy you have chosen.  For example, if you are going to do a rehab on the property and then rent it out, you would want to get bids on repair work, consult records on comparable properties, and work with reliable realtors.  Every property analysis must include the bad information along with the good factors.
  2. Control the Money. All real estate investments require capital of some kind.  If you are going to involve financing, make sure you get the best rates and repayment schedule that meets with your personal financial situation.  If you have the capital to invest, make sure you aren’t using funds that have to be replenished in a short period of time.  Your ability to control the money and the financing in a way that meets your investment strategy will determine if you succeed or fail.
  3. Understand your Strategy. It can’t be over emphasized how important knowledge is to real estate success.  There are a great many ways to profit from real estate strategies, and they are all different.  When you decide which strategy you are going to implement, take the time to learn as much about the investment strategy as you do learning about the projected property.  If you believe you lack information or expertise in adopting a specific strategy, find help in learning more about the real estate strategy.
  4. Get Proven Professional Help. The importance of finding professionals who can become part of your real estate team is paramount.  Theodore Roosevelt once said, “Believe you can and you’re half way there.”  The importance of his statement is as true today as it was last century.  You may believe you understand the real estate strategy perfectly and you truly are half way there.  Don’t be fooled into thinking you can go it all alone.  Use professionals to build a team that works together.  Find people who can do the things you can’t.
  5. Protect your Future. It all starts with protecting your real estate.  Use insurance to protect real estate structures and insurance to protect your title to the property itself.  You can also protect your future by insuring that you can meet your liquidity requirements.  Don’t allow lack of capital to spell disaster.

Real estate can provide a second stream of income and help develop wealth.  Yes, the risks are real, but the rewards and benefits are also real.  Your ability to recognize the risks and to take the steps to avoid as many of them as possible will determine your overall success.  It’s your discipline that will provide the key to your real estate future.  Warren Buffett is regarded as one of the world’s best investors, and he summed it up well with his comment, “We don’t have to be smarter than the rest. We have to be more disciplined than the rest.”  Use real estate as the vehicle to your future and success can be right around the corner.

Workshop Update | Week 48

Workshop Update | Week 48

This week, Response delivered 4 Real Estate and Stock workshops. Our overall customer experience score, for all surveys received, was a 5 out of 5. We saw over 198 students. Here is what some students shared about their experience:

“I would recommend the seminar to everyone. I learned more information about real estate than I even thought possible.” —Joyce G.

“Very informative and enjoyed the class.” —Sasha S.

“I am hard to impress but I would recommend this course to anyone looking to learn real estate investing.”—Anthony K.

Five Keys that Can Open the Door to Professional Rental Property Management

Five Keys that Can Open the Door to Professional Rental Property Management

It has been proven across continents and throughout centuries that real estate can be a true source of wealth and prosperity, and the person that owns the real estate generally comes out far ahead.  Unfortunately, not all people can afford to purchase real property, nor does everyone have the desire to pay for and maintain the real estate.  Yet, we all need a place to live, and that creates the roll of the real estate investor and landlord.

Purchasing Your 1st Rental Property

The first question you need to ask yourself is, “Do you want to be an investor and a landlord?  Sounds simple, but it’s really not.  Far too many entrepreneurs start their real estate adventure believing they will become rich by just owning a number of properties where other people pay them rent.  There is no doubt that the concept is true, but there is much more to the real estate strategy than simply collecting the rent.  The time will come when every investor/landlord discovers that there is much more involved than simply depositing the rent check.

As an experienced investor, I soon learned that I was troubled about becoming a landlord and experiencing the trials and tribulations associated with multiple tenants and rental properties.  John Quincy Adams was the sixth President of the United States and was formerly the Secretary of State.  In his lifetime he had become closely associated with the dilemma you may be facing today.  He once made the statement, “I inhabit a weak, frail, decayed tenement; battered by the winds and broken in on by the storms, and, from all I can learn, the landlord does not intend to repair.”  In one simple statement, he expressed many of the problems associated with rental properties and the role of the landlord.”

I decided that I would dedicate my time to improving my talents as an investor and find someone to help me manage the problems that are normally associated with being a landlord.  Through personal experience and the help of other property owners like myself, I soon found that I could offload almost all the heartaches and problems that come with rental properties to a professional real estate management company who had the experience and expertise to provide the management, while still creating great returns from my rental properties.

I know that I’m not alone when I was trying to decide if I needed professional help in managing my properties, nor was I the only one who didn’t know how to proceed in finding the right help.  It was from this experience that the Five Keys that Can Open the Door to Professional Real Estate Management was developed.  These keys are focused on the principle of two people working together for a common objective.  In musical terms this would be called a duet.

Five Keys that Can Open the Door to Professional Rental Property Management

The same principle is also true in owning and managing rental properties.  If you decide to engage a professional real estate management firm, the two parties to the duet are you and the management company.  In some cases, you might be dealing with multiple properties and more than one management company.  This being the case, the term DUETS can be a great acronym for understanding the keys to quality professional rental property management.  DUETS are, in fact, five keys that can open the door to professional rental property management.

Five Keys that Can Open the Door to Professional Rental Property Management

D – Key #1 – Define the Underlying problems. It’s critical that you go into the proposition of owning rental property with your eyes wide-open.  Yes, there are a number of economic advantages that come with ownership, but there are also some very real factors that should concern every prospective investor/landlord.

  • Investment Funds. It is possible in some situations for the investor to get started with creative “no money down” strategies, but these opportunities are not the norm.  In most cases, the investor will be required to have a down payment of approximately twenty percent (20%).   If you are going to occupy at least a portion of the property, you may be successful in applying for an FHA 302K loan.  Regardless of the exact amount of the down payment, you will have both capital and credit invested in the property.  You must decide if owning rental property is the best alternative for these funds.  The decision is a personal one that will vary depending on your personal situation.
  • Preparing and Maintaining the Property. Rental properties are entirely different than purchasing raw land.  You need to be aware of existing repairs required on the property.  These repairs might include structural items such as roofing, drywall, and plumbing issues.  You should also take a close look at any appliances that will be included with the rental.  Are those appliances in good working order and will there be other repairs coming in the future?  Wise landlords learn to maintain a reserve to cover ongoing repairs.  As a future or existing landlord, your financial obligation and the personal time required to make these repairs should be at the top of your list of potential problems.
  • Collecting the Rent. Renters need to be notified of the due date of their rent.  When you draft your rental agreement, you should include exact instructions on how the rent will be collected.  Renters are notorious in being late on the rent.  Anything you can do to improve this situation is a plus.  Landlords have found that collecting the rent can be time consuming and even impossible at times.Five Keys that Can Open the Door to Professional Rental Property Management
    One way to ensure that your rent is made on time is to structure an auto payment from the prospective tenant’s checking account.  A discount on the monthly rent has been found to be an excellent incentive to get this auto payment accepted.  This auto payment is not always feasible, but, should be attempted whenever possible.  Additionally, your rental agreement should include a reasonable security deposit along with financial penalties if the rent is not paid on time.
  • Tenant Problems. Naturally, you will always try to get the very best tenants.  When selecting tenants, always ask for references.  A strong recommendation is to get at least three references and to make personal contact with each of them.  Your goal is to avoid as many tenant problems as possible.  This includes much more than just the person’s ability to pay the rent.  If the prospective tenant has been a problem to previous landlords, you want to know it.  A good practice is to ask references if they know anyone else who has dealt with the tenant.  The more you can find out about the tenant before they move in, the less problems you will have in the future.  In dire situations you may be faced with the eviction process.  You need to know how to manage this problem and you should be aware that any eviction will cost you time and lost income from the rental.  In most states there are governmental fees that have to be paid as part of the process.  Finally, tenants can become dependent upon the landlord and call upon them at all hours.  Are you prepared for this?
  • Personal Financial Situation. Are you prepared to meet unexpected expenses and large one-time obligations?  These could be tax obligations, reserves for repairs, and legal expenses.  It’s important that you manage all of the financial payments including any utility payments and associated expenses in a timely manner.  If your personal financial situation will put you at huge financial risk if one rent payment is not made on time, you should know this in advance because not all rent is received on time.
  • Security. Is the property safe from vandals?  This sounds simple, but it’s not.  You need to ensure that the property is safe and that the renters are also safe.  In essence you have a responsibility to both.  The first thing you need to do is to review the property and be confident in the security of the building using proper locks and similar things.  Second, and most importantly, you need to acquire adequate property insurance and usually an umbrella policy to protect you in the case of lawsuits.

All of these problems may seem daunting at first, but they don’t need to be.  Once you have identified the problems, you can find and implement strategies and policies to move forward.  The rewards are yet to come.

U – Key #2 – Understand the Rewards. As you review the potential problems associated with owning and managing rental property you may believe that the problems aren’t worth dealing with.  Nothing should be further from the truth if you decided to open the door to professional rental property management services.  Professional management is not cheap and the exact benefits you will receive will be determined by the amount of involvement you retain and how much you are willing to spend.

  • Investment Funds. When you purchase the property, the financing arrangement you make are your sole responsibility.  The professional manager doesn’t get involved until you actually take ownership of the property.  You should, however, consider looking into the benefits and expenses of retaining management as you investigate rental properties.
  • Preparing and Maintaining the Property. The professional manager can offer excellent advice in regards to which appliances to offer with the rental, which major repairs should be done on which schedule, and can provide the resources to complete all maintenance on the property.  You will ultimately be responsible for paying for the maintenance, but the property manager can alleviate many, if not all, of the day to day maintenance problems.
  • Collecting the Rent. A competent professional manager can solve many of the rent collection problems.  In most cases, they have had the experience to overcome renters’ excuses.  As a third party, they can relieve you of the personal one-on-one confrontation problems.  Many rental property owners have found that this benefit of collecting and managing the process pays for the entire cost of professional management.Five Keys that Can Open the Door to Professional Rental Property Management
  • Tenant Problems. Here is where the professional manager relieves you of the day-to-day worries and hassles of owning rental property.  Regardless of the problem, the contact with the tenant is with the professional manager.  When the water heater breaks or the heating is acting up, the tenant deals with the professional manager.  You, as the owner, don’t have to interact and become personally involved with personal problems and tenant disputes.  Naturally, the professional manager will keep you as updated as you want to be, but the amount of involvement in tenant problems you want to hear about can be determined in advance.
  • Personal Financial Situation. This area is still in your total control.  You don’t need to involve the professional manager in any financial matter outside of the property itself.  What is important to you are the records that the professional manager will keep on the property.  These records are critical for filing out tax forms.  Additionally, you can determine in advance how you want the rental income deposited and managed.  It is highly recommended that you stay personally involved in the record keeping process, but a quality professional manager can help tremendously in keeping up-to-date accurate records.
  • Security. A good property manager will maintain regular contact with the tenants and make security tours of the property.  This will help you know what problems exist and which potential problems need to be addressed on an immediate basis.  The manager can also make the payments for all insurance payments along with paying the regular expenses associated with the property.  Never allow the property manager to make financial decisions affecting the security of the property without your express approval.

E – Key #3 – Educate Yourself. There is no doubt that professional real estate management can solve many day-to-day problems, but you still need to know what your manager is doing.  It is important for you to be educate yourself to every facet of the duties of the professional manager.  Take the time to attend seminars, enroll in online webinars, and participate in forums and communities among property owners.  Not all property managers are competent and not all property managers are experienced.  When you take the time to educate yourself about the complete landlord experience, you will be able to select the proper management solution.

T – Key #4. Timing. When are you ready to choose a property manager for your rental property?  Timing is a question that confronts almost all rental property owners.  A better question might be: “Are you ready and do you need the help of a professional management company?  The best way to determine the answer to this question is to answer a series of additional questions.

  • Number of Properties. How many properties or rental units do you own?  The more units you own, the higher the probability that you will need property management.
  • Proximity to the Property. How close are you to your property or rental units?  It is much more difficult to manage a property when you live along ways away from the property or even in another city.
  • Time Constraints. Is your time limited as to the amount of time you can spend dealing with tenants or dealing with problems?  Do you have the time available to go to the property or properties and continually collect rent?
  • Personal Talents. Do you have the skills necessary to complete regular maintenance on the unit or units?  If not, do you know who to call to make these repairs?
  • Existing Management Problems. Are there existing management concerns that are consuming most of your time?

S – Key #5 – Select the Right Property Manager. The choice of the property manager for your property may be the single most important decision you make after you purchase the property.  Once you determine the amount of involvement you want to have, you can then start the process of finding a competent and qualified professional rental property management person or company.

  • Comparison Shop. There are numerous companies and individuals who offer professional management services.  Don’t be satisfied with an interview of just one company.  Compare prices between different companies along with an evaluation of just which services they offer.  Make sure you are comparing oranges to oranges when evaluating the different companies.
  • Get Recommendations. If you belong to an association or community of real estate investors or property owners, solicit their help in identifying different management companies.  As you get the recommendations, ask for both the good qualities and bad qualities.  In some cases, you may get recommendations from friends or family.  In these cases, make sure you compare the management candidates in the same way as you would any other candidates.
  • Get References from the Management Companies. Once you have identified the top management companies or individuals, make the effort to get references from them.  These references should include other property owners or clients, like yourself.  The references should also include some of the companies that the management company uses to do repairs and complete maintenance.  The final word of caution here is to follow up on these references and make personal contact.  The more you know and understand about the professional management company, the better equipped you will be to make the final decision.
  • Get It in Writing. A competent and qualified professional rental property management company will have a contract that is fairly lengthy and detailed.  It should enumerate exactly what the management company will do and won’t do.  Your responsibilities as property owner should be explained in detail.  The agreement should include how finances, expenses, and rents are handled.  Don’t rely on just your “understanding.”  Get it in writing and you will avoid unexpected decisions.
  • Make the Selection. In the end, you must make the decision as to who will manage the property.  After a period of time, according to the terms of the agreement, you can re-evaluate the management arrangement.  If you are satisfied, then renew the agreement, but if you’re not, don’t be afraid to make a change.

These five keys will help you open your eyes to both the advantages and concerns that come with professional rental property management.  Remember that your rental success starts with you.

 

 

Real Estate Deal Lab | Week 46

Real Estate Deal Lab | Week 46

On November 15th through the 17th, Response hosted its Real Estate Deal Lab. They had over 145 students attend the advanced Real Estate training event. Students also had the privilege of meeting and hearing from Bud Lethbridge, an asset protection and investment strategist. It was a great event with very high customer satisfaction ratings. Here’s what a few customers shared about their overall experience:

“The materials and education presented was amazing and beyond my expectations.” Abdirazak O – MA

“The Affordable Housing and Negotiation training was excellent.” Michael T – WA

“So much information to learn that the general public is aware of. So blessed to have been a part of this.” Jason L. – FL

“Quality of speakers and trainers. They are all professional RE investors.” Virginie J – FL

Workshop Update | Week 45

Workshop Update | Week 45

This week, Response delivered 12 Real Estate and Stock workshops. Our overall customer experience score, for all surveys received, was a 5 out of 5. We saw over 542 students. Here is what some students shared about their experience:

“Great information and tools was on the cutting edge of real estate.” —Kathy G.

“I always wanted to invest in real estate. This is clearly a structured path to success with many options.” —Charles S.

“The most professional training I have ever received.”—Mark M.

Come Have A Look

Come Have A Look

Response has been under construction and has completed its redesign. Although they have not officially moved, they have a new office space which will enable employees to more effectively collaborate. Additionally, the upgraded facilities will provide more support and space for employees as well as for customers.  Next time you are in town, be sure to get a tour of their very impressive work environment.

Workshop Update | Week 44

Workshop Update | Week 44

This week, Response delivered 13 Real Estate and Stock workshops. Our overall customer experience score, for all surveys received, was a 5 out of 5. We saw over 759 students. Here is what some students shared about their experience:

“Awesome presentation and the staff was exceptional. Great job!” —Mitchell V.

“Great information. Very educational to open up your mind to all the different aspects of real estate.” —Csantecia W.

“It was the best money I’ve ever spent. The knowledge was invaluable!”—Louise L.

Response Adds New Advisory Board

Response Adds New Advisory Board

Response’s greatest assets are its customers. Given this, Response created a customer advisory board, giving Response customers a powerful collaborative platform to influence Response’s instruction. Within the advisory board are sub-committees focusing on specific interest areas. Through this collaboration, Response can pro-actively align and effectively build the products, tools, and curriculum needed to help our customers succeed. For example, Response is in the process of rolling out a new Real Estate curriculum. To ensure curriculum alignment with customer needs and industry trends, Response’s instructional designer and management team is working closely with an advisory board sub-committee to explore and test the new curriculum’s learning effectiveness. Through this process, Response will get direct customer feedback, prior to releasing the new curriculum to a wider customer base. There are currently 1500 Real Estate and Stock advisory board members. If you are interested in being an advisory board member, would like to know what the respective requirements are, and/or want to apply for an annual speaker opportunity, please visit https://response.com/advisory-board/.