The Best Real Estate Investing Advice

I recently did a radio interview and this is a partial transcript from that conversation. Let me know what you think!

What is your Best Real Estate Investing Advice?

Don’t stop. Never quit. Never give up. You’re going to a hit ton of obstacles in this business – you CANNOT let them stop you. So many investors get stopped by either ignorance or fear saying, “this is just too hard” – “real estate doesn’t work for me” – “real estate doesn’t work in my area.” Then they get out! Don’t do that. Find someone who can guide you through. It could be someone in your REIA, another investor, an attorney, anyone successfully doing what you’re trying to do. Do what it takes to find answers to your questions. You don’t have to know everything today; you learn over time. Take the time to figure it out – but don’t get stopped.

Name on big obstacle.

Legislation – laws change and often investors don’t know their state laws or say “our laws don’t allow that” when actually they’re ignorant of the laws. The law may say you can’t do something a specific way, but you can in fact do it another way. Again – learn, find out, know – just don’t get stopped.

Best book you’ve read

I prefer business books because we run a business. If you have more than 2 properties, you have a business and need to treat it as such, rather than like a hobby. The great thing about business books is that most business needs are the same, no matter the industry. “The EMyth” by Michael Gerber is fantastic and “Think and Grow Rich” by Napoleon Hill.

Best personal growth experience and what you learned from it.

My best ever personal growth experience probably came from my worst ever life experiences. My three experiences were divorce and two extreme family health crises. One of the big things I learned through these was not to waste time – everyday is valuable, even the tough ones. Jim and I are so so busy every single day, our days are so full, but we love it because it’s all productive, it all serves a purpose, it serves others, and our activity constantly moves us toward our goal. We don’t have to be at our goal to enjoy life, just working for it and making steps brings us tremendous joy. Don’t sweat the small stuff because it really is all small stuff over a life span – it really does pass as time continues to march on. It’s precious, don’t waste it.

How I tie that into real estate is by pointing out that, if you decide to wait before you make a purchase, I promise that in five years you’ll be kicking yourself for waiting. Time is so precious.

Best success habit you practice

Not getting stopped. For that to happen, you must have a big enough “why?” You must have a big enough reason to be doing this business – and your reason’s gonna change. Starting out, our reason for this business was to provide for retirement (and of course I wanted to get to that sooner rather than later). Eventually, as we began to have income coming in for today, our reason became a better lifestyle for ourselves and our family along with being able to give more, which feels really good. Now our reason is to leave financial prosperity to our children and grandchildren

Best deal you’ve done

Our mountain house. About the time we started this business, we also bought a very nice house in our gorgeous North Carolina mountains. As it turns out, we just happened to buy it with private money because Jim was golfing with a friend one day and told him about a house we were hoping to get in spite of crazy lending regulations. When they finished golfing, his friend turned to him and offered to fund the deal. (We were shocked and amazed he even had the money – we’d worked with him and known him for years. If we didn’t have money, how did he???) Finding private money is easier than you’d expect – all you have to do is talk about what you do…

But, the point of this story is that this was 2005-2006 before the economy tanked. We bought the house and spent about $10,000 giving it a face lift. Shortly into owning it, Jim told me we’d have to sell as it was not generating cash flow and, with our new company sucking up cash, we couldn’t afford to maintain the mountain house. I was devastated, however… We agreed on a sales price, which I thought was high because I didn’t want to sell. It sold almost immediately. We had to set the closing date to a time when we would own it for 366 days. By holding it longer than a year, we would only have long term capital gains to deal with. We made $100,000 profit after loving it for 12 months. That was crazy huge money for us and we had super enjoyed the house and the mountains better than free all that time. We poured every dime of profit back into our investing business. This was another confirmation that real estate is an amazing way to make huge money.

Best quote

(1) Don’t Think for the Seller

Before you buy anything, you must always know your numbers. Their numbers and problems cannot influence your offer or you’ll pay too much.

(2) Failure is Not an Option

When we started out, we were at an age where we didn’t have time for a failure.

And, that’s what has kept us overcoming hurdles and knocking down walls even today. Failure is not an option.

(3) Hope is not a Strategy

There are so many moving parts in this business. You can never hope things will work out or the economy will remain strong or property values will increase. You must KNOW your numbers, your response rate, all the dynamics of your business at all times. That’s the only way you can improve what’s working, eliminate what’s not, and know the difference.

What’s the biggest mistake you’ve made in real estate?

Being influence by sellers. It’s hard to not get caught up in the emotion of the moment and in their needs, but that can ruin your deal. One of our very first buy opportunities, Jim went to the sellers home and, later, when he walked back in our front door he said, “I just paid too much for this house.” The woman had recently found out she had cancer and, while Jim was sitting in the house talking with them, their attorney called to tell them their home was being foreclosed. She started crying and Jim wanted to help them out. You MUST know your numbers and stick with them. They are your numbers for a reason!!! You CANNOT be influenced by the sellers situation or emotion.

What Is The Difference Between Real Estate Agents And Brokers?

Real estate is one field that has been a favorite investment for people. The people like to invest in the field of real estate which has a lot of returns and the money invested becomes a lot over the years. The buyers have been buying property for a very long time now and that makes it a super easy thing as the whole process becomes easy once you are aware of the field. This is one reason that it has become a very lucrative field and many people want to be on the receiving end of the trade like builders and developers. The prices keep soaring each year and make the investment very fruitful for the buyers. The real estate agents and brokers are ones who keep all the information about the property scenario of each area. This has since long become a way for people to make things possible for people.

As the investor might or might not have all sorts of facilities and ways to know about the field of real estate and that becomes one point where most buyers hesitate and leave it to others. But gathering information and that too the right one, is something that can become an issue. People want to make the most out of the situation and so put all efforts to gain as much and as correct information as possible. But where to get it is another issue. So they turn to professionals like brokers and agents who work in the field and so know it all. Basically they have all the past and present information related to their field which makes it a way for the people to know about the current trends and other things. The buyers are mostly unaware of the trends and so this becomes the reason for them not being able to invest the money in the places they should. So this is where the agents and brokers step in. These people have all sorts of information and also about the future projects and that becomes a point where the buyers have to contact them.

An advice to the buyers would be that they should take to themselves to research and find the best of the lot. The buyers have to ensure that they go to only the best. But before you go and make the decision, know who is who. There is a difference between a real estate agent and broker. A broker acts as a medium between the buyer and the seller. He/she takes a certain amount for commission for doing so. This person is in contact with both the sellers/builders and buyers who make it a point of taking things in their favor. Agents are people who work for brokers and find buyers. This is the person you actually meet and so the relation is great. The people who work like this are the ones who do the ground work of making it possible for you to finalize the house.

The Top 10 Mistakes Most New Real Estate Investors Make

Real estate investment can be a great way to make money, assuming that you do it right. There are a lot of pitfalls that you need to avoid to make sure that you actually turn a profit, so here are ten mistakes you should avoid if you’re new to the market.

10. Not Knowing Your Budget

The cardinal sin for any real estate investor is trying to buy beyond their means. You should be aware of your maximum budget and never exceed it, even if a property appears to be perfect. You will be setting yourself up for a fall.

9. Not Doing Research

Before you commit to buying any property, you need to know everything that you can possibly know about it. This not only allows you to better estimate how much money you will need to invest after purchase, but can also allow you to negotiate a lower price.

8. Going Outside The Comfort Zone

If you have managed to make a little bit of money investing, be sure to stick to what you know until you have the budget to try something new. Even then, you should never invest without the proper advice.

7. Charging Too Little

If you are renting properties out, you need to make sure you are charging enough to turn a profit. This involves researching the area and the average prices for a property of the type you are letting out, to ensure you stay competitive yet profitable.

6. Chasing Deals

All investors have the one that got away, but sometimes that isn’t a bad thing. Just because something seemed perfect at first, doesn’t mean you have to buy it, especially if the numbers don’t add up as you go along.

5. Early Payments

If your property needs renovation work, you should never be in a position where you pay 100% of the cost before the work is completed. Be sure that you are completely happy before you hand over the rest of the cash.

4. Relationships With Tenants

Any sort of relationship with a tenant, friendship or otherwise, is dangerous. Your relationship should be strictly business so that you are never in a position where your emotions are conflicting with doing what you need to do to sustain the business.

3. Not Being Diligent

Just because a property doesn’t have a problem that is easily viewable, doesn’t mean it has no problems. Be sure to diligently check your buildings so that you can catch anything that would become an issue as early as possible.

2. Not Looking At Grants

You don’t necessarily need to go into real estate investment alone. A lot of states offer special loan and grant programs that can cover some of the costs for you. Be sure that you’re aware of what you can and can’t claim for.

1. Ignoring Cash Flow

You should always be completely aware of what is coming into your account from each of your properties. Just assuming everything is okay is a great way to leave yourself open to losing money. Find out what isn’t doing as well as it should and solve the issue.