Entries Tagged 'Real Estate Investing' ↓

To begin with, you should know that being a real estate investing can be extremely risky business.   So risky, in fact, a study commissioned in 2001 of large real estate investor associations in America found that 92% of fall first time investors drop out within 3 months.   Other research has uncovered that 9 out of 10 investors do not survive the first year of their investment portfolio.

What is equally sad, is that the Small Business Administration reports that 95% of all businesses fail within their first year.   Then, within 5 years, only the remaining five percent are left over.

Therefore, real estate investor attrition rates are Far HIGHER than the failure rate of small businesses!!!

As you can see, we’re not painting the most glamorous picture for you to become a real estate investor now, are we?  (Hey, like the title says…this is the “411”…the real lowdown on the ugly truth suppressed by those television programs and late night infomercials that paint a pretty rosy picture of real estate investors getting their way all the time).

However, there are a few causes – specific reasons why – such a high rate of investors fail.  Much of those reasons can be addressed by gaining access to a highly regarded real estate mentoring program.   Other causes, such as not have an appropriate business plan and set of step-by-step processes to following when becoming a real estate investor, can be as easy as pulling a real estate book off the shelf at your local book store, and reading through its contents.

There are 26 different reasons I can give you to as to why real estate investing is the IDEAL business for you. In fact, the word “ideal” is actually an acronym for the top 5 reasons why real estate investing is an excellent way to create ultimate wealth and freedom – unfortunately, I can’t claim that I came up with the acronym because I heard this from another great real estate investor, but it’s so good, I want to share it with you.

I – Income: You can earn a full time corporate salary in just one or two deals.
Interestingly enough, I learned this powerful principle when I did my first deal…all told I spent less than six hours looking for an investment property, contracting and closing on it, and had an immediate equity position that rivaled more than half of my corporate salary.   The message was clear; I was going to be investing in real estate full time no matter what it took.

D – Deductions: This is the only business in the U.S. and Canada that affords you to take advantage of the highest business deductions, personal deductions, and real property tax breaks and deductions available by either government.
Just imagine…you live a nearly tax free life (completely legit!).

E – Equity: Build $ value into the assets that you own, and take advantage of time value of money.

A – Appreciation: Law of Supply & Demand.  With the world population doubling in the next half-century, and no more real estate being made (except in Dubai), price (demand) will outstrip supply.
Regardless of how things may look in your market, today, over the long term, real estate always goes up in value.

L – Leverage: This is the secret that the Wealthy use.  If you’re a real estate investing syndicator, applying leverage in all scenarios (OPM, OPK, OPR, OPT) is what it’s all about.

There’s a poster on the wall at McDonald’s headquarters in Illinois which outlines their corporate mandate, “We Sell Hamburgers To Buy Real Estate”.

Since before the invention of the bread slicer, real estate has always been around…and unless you live in Dubai, they aren’t making anymore of it.  With the earth’s population expected to double in the next half-century, real estate is going to be at a premium.

What’s great about real estate is it’s one of the Essential Items for Survival:

1.    Water
2.    Food
3.    Clothing
4.    Shelter (e.g. real estate)

Which means, everyone needs a piece of real estate to live in, work in, shop in, be entertained in.  It’s diverse in its application to the individual: be it a home to reside in and utilize as a primary investment, or where people can learn how to build a real estate business altogether.

Moreover, it’s a fact that real estate has been the investment vehicle that has created more wealth than any other financial instrument in the history of humankind.  In the United States alone real estate accounts for enabling the largest political action committee and lobby group to exist – the National Association of Realtors (NAR).  NAR’s one million plus strong membership of Realtor’s nationwide aim to represent the buying and selling real estate needs of residential homeowners, investor buyers, real estate developers, and commercial property syndicates throughout America.

Now we’re well beyond your Power Team in terms of additional hard and soft resources you’ll require.  For example, do you have an investment advisor or real estate mentor to guide you through the growth of your business?  Do you need websites and marketing systems to promote your business?

How much money do you expect to generate in the next three months?  What do you need to generate a 6 figure bank account and 7 figure real estate gains within 7 months?   This final section of your real estate investing business plan shows your existing resource constraints, and profit targets – both short and long term – and how you arrived at these conclusions.

This is defined by the outsourced members in the real estate investing field who will be the “enablers” for you to start, run, and scale your investment business.  People like Realtors, Mortgage Brokers, Real Estate Attorneys, etc go here.  Be specific as to why you have chosen these individuals in terms of what value they bring to the table, and how they propose to deliver this value to your business.  Always have references (at least two) for each member of your power team.