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.

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.

 

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 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.

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.

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.

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.

Tortoise or hare? Why buy and hold makes for a winning strategy.

buy and hold real estateTortoise or Hare? Why Buying and Holding Real Estate Makes for a Winning Strategy.

Buying and holding Real Estate is a long-term approach to real estate investment. Instead of flipping for a quick lump sum, you’ll hold on to your investment and use the rental market to earn a regular income.

Buy and Holding Real Estate – why should I be interested?

There are heaps of benefits for investors who choose to hold onto their property portfolio. Flipping houses can be lucrative but risky. If you’re unlucky enough to hit a dip in the market you could be left with the dilemma of either selling for reduced profit or paying off a high-interest loan until the market improves.

Buy and hold also involves fewer transactions – and the cost is spread over a longer period of time. It’s also good news on the taxation front. Not only can the tax paid on long-term capital gains be lower but might only be due if you sell the property.

How should I go about it?

Properties that need maintenance, reconfiguring or repairs create value from the get-go– your work has just increased its asking price. Your investment needs to start paying, so get the property ready for the rental market as soon as possible.

The highest rent you can achieve isn’t always the best strategy – go for a low but regular turnover, so you’re not constantly on the lookout for new tenants.

So why should you go with buying and holding real estate? Hanging on to your investment makes the most of long-term market stability and gives a good rate of return. Flipping might sound exciting but playing the long game can give you a solid financial income – without losing sleep.

Benefits to Look Forward to with Buy and Hold Real Estate

buy and hold real estate

The Benefits You Should Look Forward – with Buy and Hold Real Estate

A buy and hold real estate strategy is one of the most effective ways of quickly establishing regular cash flow. There is a number of ways you can go about dealing with real estate. It’s important for you as an investor to weigh your options.

Rest assured, you will come to realize that using the buy and hold strategy in real estate is a great option. If you still are not convinced, here are a few benefits:

Value Appreciation

Generally, the price of land only appreciates. This means that as an investor, your equity will increase exponentially over the time you hold the property.

Great Source of Income

You have to keep in mind that not all investments are going to work the same way. Some will offer the potential for equity appreciation or a consistent return, but in the case of real estate, it offers both.

The latest findings have shown that the average annuity pays out no more than 3% per year, but an investor who makes even a half decent buy and holds investment can beat these rates any day.

Depreciation Is Not Necessarily a Bad Thing

Most people are not aware that the IRS writes off any property that is more than 27.5 years old. Depreciation is not exactly an income and is referred to as a liability.

Depreciation is only an expense on paper. The costs of keeping a property in good condition can be paid out of the rent earned. This actually leads to the elimination of tax obligations due to ‘losses’ on the positive cash flow from the real estate property.

These are 3 of the benefits of buy and hold real estate.