The Frequently Asked Questions Of Real Estate Investors

Oct 24

The Frequently Asked Questions Of Real Estate Investors

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So, you?re serious in becoming a real estate investor or you wouldn?t be reading this, right? In the search for quality info, remember you’re going to through a lot of poorer quality sources as well. When you are listening to investment advice, you’re going to have to watch out for of the source you gather your information from. There is more than one person who will give you answers to your real estate investing frequently asked questions but not all of them are of the same value.

Don’t be afraid to ask if that person is really using their own personal real estate investment advice to produce a profitable living through real estate. If the truth is “not really,” then you ought to take that advice with a bit of caution.It’s really important that you learn to take your advice from proven investors.

Whose advice should I be leery of?

Watch out as you?ll observe that many casual friends, members of your family, realtors, brokers and even attorneys can give you a whole lot of misinformation. In all fairness, if they knew all the solutions to what worked and didn?t work in investing in real estate, they?d already be using their own advice to become financially free. Don’t confuse the significance of your mom’s advice about life with the significance of her real estate advice. Do you believe that Donald Trump would give you the exact same advice on investing in real estate? Which of those two do you think would give you better investment advice? My mom is one of the most amazing women on the globe but I have to put her real estate advice in perspective.

Since chances are all those people have probably not fully figured out investing in real estate, you?ll probably want to look for more qualified sources for your advice.

The Real Life Investor Tells the Honest FAQ Like It Really Is

Q: Can people actually get rich from investing in real estate?

A: Ahh… Everyone wants to know is real estate investing actually a good way to make money? Investing in stocks has made a lot monopoly man types but it’s also made a lot of break even investors and a whole lot more “average Joes” who have lost money. For the people who don?t succeed, is it that stocks don?t work or that the people using them don?t all have the right knowledge and skills?

It?s ironic everyone is a ?self made man,? it?s seems that it’s only the wealthy who admit to it. The wealthy are what they are because they have applied knowledge and skills that work. Have you ever actually looked at the independent statistics? Do you know what they always reveal? Over 90% of wealthy individuals can directly attribute their wealth to real estate. Can it really work? I think the statistics really speak for themselves.

Q: Which techniques work and which ones don?t?

A: Unfortunately, there is no ?one size fits all? answer to that question. In the United States of America, bank short sales and lease-purchases are great techniques to get started towards producing strong cash reserves. In other parts of the world with more stringent banking laws, you may need more complete knowledge on how to start private capital funds and other similar ventures to get around having to have out of pocket funds.

Q: How much money do I have to have to start?

A: Donald Trump once said that using your own money in a deal is just ?lazy.? If you really get how to create a steep discount than the money sources are probably a lot easier than you think. There are always banks, private money partners, hard money lenders and other money sources willing to back a “secure” deal irrespective of income and/or credit. Besides, no matter who you are, eventually your money runs out and so you have to learn how to raise capital in order to build and sustain wealth. No one ever got really well off using only their own money.

The single biggest thing that people don’t understand is that having ?debt? is not a good thing. It’s impossible to get rich without it. It?s true however that high interest credit cards and consumer debts are bad. However, all businesses use loans and private capital debts that create more incoming profits than the debt requires them to make payments for. That is the only path to wealth. There is no limit to the number of money making debts you can afford.

Q: What is the best place to get started?

A: There are loads of free resources online that will teach you the basics you will need to proceed forwards with making money in real estate. I would strongly advise that you simultaneously learn some marketing techniques as you will observe that most investors don’t succeed are not because they have a shortage of techniques that work but simply due to their inability to utilize effective marketing. Marketing is 90% of every business. You cannot achieve long lasting financial success in any business without effective marketing.

Q: What is the best area to buy in?

A: There is another staggering misconception that you need to buy property in the right location. Learn to invest your cash in great deals, not great areas. If you?re looking to buy a second property and you desire to hold it for a very long period of time, then I?d strongly advise you to check out the fundamentals of cash flow course by Matthew David. However, if you know how to purchase real estate investments with large discounts built right into the purchase, you will be unaffected by almost any local market conditions. To successfully make money in real estate you need to learn to buy significant equity at the instance of purchase and then sell that equity. The ?best area? to accomplish that is anywhere you can find such a phenomenal deal. That?s why all true investors know that making money in real estate happens when you buy, not when you resell.

Q: What are the best types of properties to buy?

A: The best types of properties to acquire are much like what are the best areas to buy. The best types of investments to buy are ones that give you significant equity right at closing. That should mean that you are buying it for much lower than the rest of the local market would buy that real estate for. The best types of properties to buy are the ones that offer the steepest discounts with a fixable solution to why they were sold to you for that low. That can be any type of property. A soon to be foreclosure is a perfect of that but it is not the only one.

Q: Should I “flip”/rehab real estate?

A: You’ve most likely heard a lot on Television about this type of investing. There are many people who get rich knowing full well how to invest in high risk stocks and there are many people who are content getting 4% in a savings account. Most generic ideas that are pitched to the public produce ?slow, steady, gradual, and secure returns.? They may produce a little bit of returns but they can’t ever achieve wealth.

When you rehab or ?flip? a property, you?re actually just exchanging your money for time. Having said that, you will never get an unlimited amount of time to rehab and fix properties. While you can definitely earn a profit this way, it is extremely rare for people to become wealthy from ?flipping.? I have actually seen investors who knew little about buying with equity put their time and sweat only to walk away breaking even with 6 months of labor and time lost. I would suggest you learn to fix contracts and financing rather than learning how to swing a hammer. The first option is much more profitable and it consumes less time.

Q: Where can I get my investment advice from?

A: There are many ?gurus? who offer $2500 two day boot camps and expensive coaching. The bulk of what they will teach you is motivation. While motivation is an essential part of your success, you will probably not get any return on your investment. The best investment advice is always located at your local real estate investment club’s next networking meeting. There you will see real investors who are using systems that work. If you don?t waste their time, you will usually get 15-30 minutes of their time to hit them with detailed questions about how you should focus your efforts. Just be sure to not misuse their time.

Q: What is the most important real estate course to review?

A: There are many quality courses out there that will help you achieve lasting success. Be wary of courses that have never ending ?up-sells? with expensive boot camps, personal coaching and more detailed courses on the same material. Don?t buy hype and seminars. A true real estate course should be a complete guide from beginning to end so that you can complete the type of investment you are trying to accomplish without the need for additional information. A good course will also come with a good money back guarantee if the information is not entirely what you are seeking.

Q: What skills do I have to have to be a real estate investor?

A: Most new investors are capable of grasping the techniques but they do not have enough pre-qualified sellers to use their techniques on. As with any business, you will have to have effective communication skills, good technique know how and creative marketing knowledge. It will take time to learn these skills but the great thing is that you only have to learn them once to become wealthy.

Q: How many rentals will give me enough cash flow to live off of?

A: This is a perfect question because most people think that having rental properties is a good thing. Rental properties are for suckers. Instead know how to create real estate paper, utilize creative contracts, master creative finance or have rental properties managed in bulk. The banks gets rich from your property with very little interaction and management. You cannot become financially free if you have to do stuff like plunge a toilet or worry about the hot water tank every other night. Learn methods to get around having to commit your personal time and efforts towards property management.

For instance, if you purchase a home and your total payments are $1000/month and you rent that property for $1100/month you receive a total positive cash flow of $100/month. You are still responsible and you will be required to deal with any ongoing issues with the home. If you sell that same property under creative financing conditions and you hold a mortgage note as a second lender, you can make the same $100/month acting like a bank without any of the head aches. In the latter example you are sacrificing the equity you build insanely slowly over time but you do not have to manage the home. You will save years of head aches and hassles by using a creative investment agreement instead of actively managing the property. However, if you buy your equity at purchase as urged on this site, the equity lost over 30 years is almost insignificant.

Q: What if my credit sucks and I don’t have any money?

A: Well I suppose you’re S.O.L. then… just kidding. Isn’t it about time you improved your credit and money anyways? You can start by fixing your credit and then earning some real dough. On the contrarty to all that you may have heard, it has never taken credit or capital to profit from real estate.

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