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Real Estate Development

The media is currently full of real estate ‘doom and gloom’ – real estate repossessions and arrears are up and real estate prices are down … its almost as if the ‘sky is about to fall’! This situation has seen many real estate developers, and property investors generally, leave the market – and for those thinking of starting out in real estate development, these are scary times indeed.

What seems like the worst time to get into real estate development can, in reality, be the best time. Successful real estate developers today realize that they can use time to their advantage – their real estate development projects will typically not be ready for sale or rent for 2 to 4 years from inception. So if they have bought well, they are less likely to be affected by the economic situation at the time of purchasing their real estate development site.

In fact, a weak market is a real estate developer’s paradise, because a weak market is a buyer’s market, and one of the first steps to any real estate development project is securing a viable real estate development site on the best possible terms.

Although we know that the real estate development business is cyclical, and many parts of the world are in a property downturn, we also know from history that knowledgeable real estate developers are successful in any market – falling, flat or rising.

We’re working towards what we believe the economic conditions will be in 12 to 36 months time. Indeed we ourselves are still active in the market – seeking Council permission for a number of real estate development projects. This gives us the opportunity to act quickly and build our approved real estate development projects when the market does become buoyant.

It is our opinion that the following market signals are some of the key factors that will lead to increased future opportunities, especially for real estate developers:

· The pent up demand for housing. In March 2008 leading Australian economics forecaster, BIS Shrapnel chief economist Dr Frank Gelber argued that housing prices across Australia will rise by 30% to 40% over the next five years because of the built-up shortages of housing.

· The current Federal Government has stated that they will work towards increasing Housing Affordability and have begun to announce incentives including Tax Credits of $6000 per year if the housing is rented at 20% below market rent.

· We believe that an increasing number of people, in the short to medium term, are likely to require the rental accommodation that we intend to build. This is due to either their financial stress (can’t afford to purchase a home) and/or demographic trends (including Gen-Ys who are less likely to buy Real Estate).

Even if our ‘crystal ball’ is incorrect, we know we have the resources to hold real estate development sites during possible further market fluctuations to come, and increasing rents are certainly helping with that!

Our belief is that this is a golden time to act – perhaps a once in a generation opportunity. Maybe it is not the time to sell completed real estate development projects at the moment, but it is certainly a great opportunity to secure the development site and obtain development planning approval. Now this strategy is not for everyone – you must have the necessary resources to hold the development site and especially the knowledge of real estate development to take advantage of these opportunities.

The best approach for anyone contemplating real estate development will depend on his or her own personal and financial circumstances, but the key message here is that you must do something!

There are many strategies that small real estate developers are currently using, if they don’t have the resources to complete a real estate development project right now, including to turn their real estate knowledge into cash by locating ideal property development sites, perhaps taking out an option on the site, and on-selling the ‘Development Permit Approval’ to someone who does have the resources.

Successful real estate developers know that times of opportunity like this only come along once in a while, and they’re taking action so they don’t miss the boat.

Regardless of your immediate financial situation, this is the perfect time to leverage your real estate development knowledge into current or future income. If you have any doubts about your ability to do this, or you would like an experienced real estate development mentor to guide you, act now to get the knowledge and mentoring that you need. There is no time to waste!

The Real Estate Sector

Boom & Bust of Indian Real Estate Sector

Engulfing the period of stagnation, the evolution of Indian real estate sector has been phenomenal, impelled by, growing economy, conducive demographics and liberalized foreign direct investment regime. However, now this unceasing phenomenon of real estate sector has started to exhibit the signs of contraction.

What can be the reasons of such a trend in this sector and what future course it will take? This article tries to find answers to these questions…

Overview of Indian real estate sector

Since 2004-05 Indian reality sector has tremendous growth. Registering a growth rate of, 35 per cent the realty sector is estimated to be worth US$ 15 billion and anticipated to grow at the rate of 30 per cent annually over the next decade, attracting foreign investments worth US$ 30 billion, with a number of IT parks and residential townships being constructed across-India.

The term real estate covers residential housing, commercial offices and trading spaces such as theaters, hotels and restaurants, retail outlets, industrial buildings such as factories and government buildings. Real estate involves purchase sale and development of land, residential and non-residential buildings. The activities of real estate sector embrace the hosing and construction sector also.

The sector accounts for major source of employment generation in the country, being the second largest employer, next to agriculture. The sector has backward and forward linkages with about 250 ancilary industries such as cement, brick,steel, building material etc.

Therefore a unit increase in expenditure of this sector have multiplier effect and capacity to generate income as high as five times.

All-round emergence

In real estate sector major component comprises of housing which accounts for 80% and is growing at the rate of 35%. Remainder consist of commercial segments office, shopping malls, hotels and hospitals.

o Housing units: With the Indian economy surging at the rate of 9 % accompanied by rising incomes levels of middle class, growing nuclear families, low interest rates, modern approach towards homeownership and change in the attitude of young working class in terms of from save and buy to buy and repay having contributed towards soaring housing demand.

Earlier cost of houses used to be in multiple of nearly 20 times the annual income of the buyers, whereas today multiple is less than 4.5 times.

According to 11th five year plan, the housing shortage on 2007 was 24.71 million and total requirement of housing during (2007-2012) will be 26.53 million. The total fund requirement in the urban housing sector for 11th five year plan is estimated to be Rs 361318 crores.
The summary of investment requirements for XI plan is indicated in following table

SCENARIO Investment requirement
Housing shortage at the beginning of the XI plan period 147195.0
New additions to the housing stock during the XI plan period including the additional housing shortage during the plan period 214123.1
Total housing requirement for the plan period 361318.1

o Office premises: rapid growth of Indian economy, simultaneously also have deluging effect on the demand of commercial property to help to meet the needs of business. Growth in commercial office space requirement is led by the burgeoning outsourcing and information technology (IT) industry and organised retail. For example, IT and ITES alone is estimated to require 150 million sqft across urban India by 2010. Similarly, the organised retail industry is likely to require an additional 220 million sqft by 2010.

o Shopping malls: over the past ten years urbanization has upsurge at the CAGR of 2%. With the growth of service sector which has not only pushed up the disposable incomes of urban population but has also become more brand conscious. If we go by numbers Indian retail industry is estimated to be about US $ 350 bn and forecast to be double by 2015.

Thus rosining income levels and changing perception towards branded goods will lead to higher demand for shopping mall space, encompassing strong growth prospects in mall development activities.

o Multiplexes: another growth driver for real-estate sector is growing demand for multiplexes. The higher growth can be witnessed due to following factors:

1. Multiplexes comprises of 250-400 seats per screen as against 800-1000 seats in a single screen theater, which give multiplex owners additional advantage, enabling them to optimize capacity utilization.

2. Apart from these non-ticket revenues like food and beverages and the leasing of excess space to retailer provides excess revenues to theatre developers.

o Hotels/Resorts: as already mentioned above that rising major boom in real estate sector is due to rising incomes of middle class. Therefore with increase in income propensity to spend part of their income on tours and travels is also going up, which in turn leads to higher demand for hotels and resorts across the country. Apart from this India is also emerging as major destination for global tourism in India which is pushing up the demand hotels/resorts.
Path set by the government

The sector gained momentum after going through a decade of stagnation due to initiatives taken by Indian government. The government has introduced many progressive reform measures to unveil the potential of the sector and also to meet increasing demand levels.

o 100% FDI permitted in all reality projects through automatic route.
o In case of integrated townships, the minimum area to be developed has been brought down to 25 acres from 100 acres.
o Urban land ceiling and regulation act has been abolished by large number of states.
o Legislation of special economic zones act.
o Full repatriation of original investment after 3 years.
o 51% FDI allowed in single brand retail outlets and 100 % in cash and carry through the automatic route.

There fore all the above factors can be attributed towards such a phenomenal growth of this sector. With significant growing and investment opportunities emerging in this industry, Indian reality sector turned out to be a potential goldmine for many international investors. Currently, foreign direct investment (FDI) inflows into the sector are estimated to be between US$ 5 billion and US$ 5.50 billion.

Top most real estate investors in the foray

Investors profile

The two most active segments are high networth individuals and financial institutions. Both these segments are particularly active in commercial real estate. While financial institutions like HDFC and ICICI show high preference for commercial investment,the high net worth individuals show interest in investing in residential as well as commercial properties.

Apart from these, the third most important category is NRI ( non-resident Indians). They mostly invest in residential properties than commercial properties. Emotional attachment to native land could be reasons for their investment. And moreover the necessary documentation and formalities for purchasing immovable properties except agricultural and plantation properties are quite simple. Therefore NRI’s are showing greater interest for investing in Indian reality sector.

MAJOR INVESTORS

o Emmar properties, of Dubai one of the largest listed real estate developer in the world has tied up with Delhi based MGF developments to for largest FDI investment in Indian reality sector for mall and other facilities in Gurgaon.

o Dlf India’s leading real estate developer and UK ‘s famous Laing O Rourke (LOR) has joined hands for participation in airport modernization and infrastructure projects.

o A huge investment was made by Vancouver based Royal Indian raj international cooperation in a single real estate project named royal garden city in Bangalore over period of 10 years. The retail value of project was estimated to be around $ 8.9 billion.

o Indiabulls real estate development has entered into agreement with dev property development, a company incorporated in Isle of Man, whereby dev got subscription to new shares and also minority shareholding the company. But in recent developments indiabulls have acquired entire stake in dev property development in a 138 million-pound sterling (10.9 billion ruppees) share-swap deal.

o Apart from this real estate developments opens up opportunity for associated fields like home loans and insurance. A number of global have shown interest in this sector. This include companies like Cesma International from Singapore, American International Group Inc (AIG), High Point Rendel of the UK, Colony Capital and Brack Capital of the US, and Lee Kim Tah Holdings to name a few.
Following are names of some of the companies who have invested in India

International developer Country Investment
(US $ million)
Emmar properties Dubai 500
Ascendas Singapore 350
Salem & ciputra group Indonesia 350
GE commercial finance U.S 63
Tishman Speyer Properties U.S 300

Simultaneously many Indian retailers are entering into international markets through significant investments in foreign markets.

o Embassy group has signed a deal with Serbian government to construct US $ 600 million IT park in Serbia.
o Parsvanath developers is doing a project in Al – Hasan group in Oman
o Puravankara developers are associated with project in Srilanka- a high end residential complex, comprising 100 villas.
o Ansals API tied up with Malaysia’s UEM group to form a joint venture company, Ansal-API UEM contracts pvt ltd, which plans to bid for government contracts in Malaysia.
o Kolkata’s south city project is working on two projects in Dubai.
On the eve of liberalization as India opens up market to foreign players there is tend to be competitive edge to give quality based performance for costumer satisfaction which will consequently bring in quality technology and transparency in the sector and ultimate winners are buyers of this situation.

However this never ending growth phase of reality sector has been hard hit by the global scenario from the beginning of 2008. Analyst say situation will prevail in near future, and latest buzz for the sector comes as a “slowdown”.

Sliding phase of the reality sector

In this present scenario of global slowdown, where stock markets are plunging, interest rates and prices are mounting, the aftermath of this can now also be felt on Indian real estate sector. Overall slowdown in demand can be witnessed all across India which is causing trouble for the major industry players. Correcting property prices and rentals are eroding away the market capitalization of many listed companies like dlf and unitech.

Fundaments behind slowdown…

Propetry prices move because of the basic principle of demand and supply
o when demand is high and supply low prices will go up
o When demand is low and supply high prices will go down.

For example let’s assume that somebody has bought a property for Rs X and he is trying to sell the property (say after a year), there can be three options, assumption being that the owner is in need of money and cannot wait for more than 3 months to sell the property.

1. When the property prices are gliding everywhere : now owner will try to add as much premium to the property as possible, in order to book profits, therefore he will wait for 3 months and sell off in last month at the highest bid. Where he ill get total of Rs X + Rs Y.
2. When property prices have stabilized: here owner will not be able to sell at premium and book profits due to market stabilization & since he don’t want to sell at a loss, he will try to get same amount he brought the property for. Where he’ll get total of Rs X = Rs Y
3. when property prices are going down : owner will try to sell the property at least profit or least cost. Therefore he ill get Rs X-RsY.

Reality deals in major cities like Delhi, Mumbai, Bangalore, Chennai and Hyderabad have shown enormous downfall from October 2007 – March 2008. The downfall had been cushioned by fall in stock markets as it put a stop for wealth creation, which leads to shortage of capital among investors to invest in real estate activities. Apart from this in order to offset their share losses many investors have no choice, but sell their real estate properties.

Other factors which have contributed to this slowdown are raising interest rates leading to higher costs. Due to this almost all the developers are facing serious liquidity crunch and facing difficulties in completing their ongoing projects. Situation seems to be so disastrous that most of the companies have reported 50-70% cash shortfall. The grade A developers which are facing cash crunch include DLF,MGF, Emmar, Shobha developers, Unitech, Omaxe, Parsvnath Developers, Hiranandani Group, Ansal API, BPTP Developers and TDI Group. As a outcome of this liquidity crunch many developers have started slowing down or even stopped construction of projects which are either in their initial stages of development or which would not effect their bottom line in near future.

Also with increasing input costs of steel iron and building material it has become it has become inviable for builders to construct properties at agreed prices. As a result there may be delays in completion of the project leading finical constraints.

At the same time IT industry which accounts for 70% of the total commercial is facing a slowdown. Many residential buyers are waiting for price correction before buying any property, which can effect development plans of the builder.

Aftermath of reality shock to other sectors

Cement industry hit by reality slowdown

The turbulence in the real estate sectors is passing on pains in cement industry also. It is being projected that growth rate of cement industry will drop down to 10% in current fiscal. The reasons behind such a contingency are higher input costs, low market valuations and scaled up capacity which are in turn leading to reduced demand in the industry. High inflation and mounting home loan rates have slowed down the growth flight of real estate sector which accounts for 60% of the total cement demand. The major expansion plans announced by major industries will further add to their misery as low market demand will significantly reduced their capacity utilization.
Setting up new facilities will impart additional capacities of 34 million tone and 45 million tone respectively in 2008-09 & 2009-10. This is likely to bring down capacity utilization in the industry down from current 101% to 82%. Even as it loses power to dictate prices, increased cost of power, fuel and freight will add pressure on input costs.

Ambuja Cements too is trading at a higher discount than previous down cycle, suggesting bottom valuations. However, replacement valuations for Madras Cements and India Cements indicate scope for further downslide when compared to their previous down cycle valuations.
All this has added to stagnation of the cement industry.

Dying reality advertising

The heat of reality ebb is also being felt by the advertising industry. It is being estimated that all major developers such as DLF, omaxe, ansals & parsvnath have decided to cut down on their advertising budget by around 5%. The advertising industry in India is estimated to be around 10,000 crore. This trend can be witnessed due to weakening spirits of potential buyers and real estate companies call it a reality check on their advertising budgets. A report from Adex India, a division of TAM Media Research, shows that the share of real estate advertisements in print media saw a drop of 2 percent during 2007 compared to 2006. According to Adex, the share of real estate advertisement in overall print and TV advertising last year was 4 percent and 1 percent, respectively. It’s a known fact that infrastructure and real estate companies are responsible for advertising industry maintaing double didgit growth rate. Therefore its understood that a recent slowdown in iindian reality sector has made things worse for advertising industry. The Adex report indicates that the top 10 advertisers shared an aggregate of 16 percent of overall ad volumes of real estate advertising in print during 2007. The list include names such as DLF Group, Parsvnath, Sahara, HDIL and Omaxe group. However, the real estate had maximum share in South India publications followed by North and West publications with 32% and 26% share, respectively, during 2007.

According to many advertising agencies consultants, this phenomenon is taking a toll as all real estate companies want a national foot print and also these companies are turning into professionals. Therefore they are setting standards when it comes to advertising to sales ratio.

Falling stock markets knock down reality stocks

Reality stocks have been hard hit by uncertainties prevailing in the stock market. The BSE reality index is the worst performer having shed 51% of its 52-week peak reached in reality. The BSE benchmark index has shed 24% since January. The country’s largest real estate firm DLF scrip lost 54% while unitech lost 64% from its peak. The scrips of Delhi bases parsvnath and omaxe have lost 68% each since January.

The sector is facing a major downfall in sales volume in most markets of the country. The speculators have exit the market and Mumbai and NCR, the biggest real estate markets in markets are cladding subdued sales. In Gurgaon and Noida, which had seen prices almost treble in four years, sales are down 70%, leading to a price correction of 10-20%.
Lets us have a look how major cities are affected by reality downfall.

Top 4 metros taking the lead – in slowdown

Delhi &NCR

While bears are ruling the stock market, the real estate sector in Delhi & NCR region has started facing departure of speculative investors from the market. According to these developers based in region the selling of flats has become very complicated at the launch stage due to lack of interest from the speculators. Developers attribute this to stability in prices against the past where prices were up surging on monthly basis. The scenario has changed so much in the present year that developers are now facing difficulty in booking flats which may delay their projects and reduce their pricing power for instance a year ago, if 100 flats were being sold in month at launch stage now it has come down 30-40 per month. Till mid 2007 speculators made quick money by booking multiple flats at launch of the project and exiting within few weeks or months. But now due to the stabilization of the property prices little scope is left for speculators to make money in short term. Therefore outcome is their retreat from the sector.

Mumbai

Mumbai real estate market, which witnessed huge increase in prices in recent years, which made the city to enter in the league of world’s most expensive cities, is now feeling the heat of slowdown. Property sales that have been growing at a clank of around 20% every year have been plumped by 17% in 2007-08.

Though slowdown news of property market in country’s financial capital has been much talked about, but it was first time that figures proved the extent of slowdown. Information about residential and commercial property sales from the stamp duty registration office show almost 12,000 fewer transactions during the last financial year compared to the year before. From April 2007 to March 2008, 62,595 flats were purchased in Mumbai as against 74,555 in 2006-07.
According to reality analyst sales volume can die out further in south as developers persist on holding to their steep prices and buyers anticipate a further fall with current rates beyond reach. They further add that market is on a corrective mode and downward trend is anticipated for another 12 months.

Between 1992-96, the market ran up the same way it did during 2003-07. Post-’96, the volumes dropped by 50%. This time again it is expected to drop substantially though not so steeply. The demand is now extremely sluggish and customers do not want to stick out their necks and transact at prevailing rates.Chennai in past few years we witnessed reality index gaining huge heights on BSE and it also impact could be felt allover India. Amongst them Chennai was no exception. With IT boom in past few years and pumping of money by NRI’s have led to prices touching skies. Chennai also witnessed a huge boom property prices over the last few years. However in past few months it has been facing slowdown in growth rate.

Following factors can be attributed to this:
o This is one of the common factor prevailing all over India- rise in home loan interest rates, which has made it extremely difficult for a normal salaried person to be able to afford a house.
o Depreciation of US dollar, which means NRI’s who were earlier pumping money into the real estate are now able to get less number of rupees per dollar they earn in US. Therefore many of them have altered their plans for buying house in India.
o The Chennai Metropolitan Development Authority (CMDA) has imposed stricter norms for apartment construction and penalties for violations are more severe than before.
o Failure of the legal system of chennai to prevent intrusion, forged documents and illegal construction has added to the problem as many NRI’S are hesitating to buy plots in chennai.
o Apart from this tsunami of 2004 has shaken the confidence of many investors to invest in real estate.

However many analyst are quite bullish about this region. Especially in areas like old mahabalipuram, south Chennai etc because of numerous IT/ITES/ electronics/automobile companies are expected to set up their centers in these areas. Once these projects are complete and companies begin operations their, many people would like to live near to such areas and outcome will be boom in residential sector.

Bangalore

As discussed for above cities Bangalore is also dwindling between the similar scenarios. Bangalore seems to be in midst of low demand and supply. This trend is due to myopic developers, due to sudden growth in Bangalore in last few years, lot of builders have caught the opportunity of building residential houses thinking their will be lot of employment, increase in salaries and hence demand for housing. Past few years have been jovial for Bangalore as IT industry was doing well and banking and retail sectors were expanding.

However with this sudden economic slowdown, due to which Indian stocks markets are trembling, interest rates are high, jobs and recruitment put on freeze have led to cessation of investment in local property markets.

According to the developers real-estate industry of Bangalore has experienced a drop of about 15- 20% in transaction volumes. Adding to it grade A developers have faced a dropdown of 50% on monthly levels of booking compared to what they enjoyed in December 2007.

Future outlook

The real estate explosion in Indian real estate is due to by the burgeoning IT and BPO industries. The underlying reason for all these moves is that the Indian real estate is tremendously attractive, because of basic demographics and a supply shortage. Truly Indian real estate is having a dream run for last five years.

However in the current scenario Indian real estate market is going through a phase of correction in prices and there are exaggerated possibilities that these increased prices are likely to come down.
In this scenario hat will be the future course of this sector?

Many analyst are of view that tightening of India’s monetary policy, falling demand and growing liquidity concerns could have negative impact on profiles of real estate companies. Slowing down would also aid in the process of exit of some of the weaker entities from the market and increasing the strength of some of the established developers. A prolonged slowdown could also reduce the appetite of private equity.

Its also been projected that large development plans and aggressive land purchases have led to a considerable increase in the financial leverage (debt/EBITDA) of most developers, with the smaller players now being exposed to liquidity pressures for project execution as well as a general slowdown in property sales. Property developers hit by falling sales and liquidity issues would need to reduce list prices to enhance demand, but many still seem to be holding on to the asking price – which, would delay the process of recovering demand and increase the risk of liquidity pressures.
It was being witnessed that before the slowdown phase the projects were being sold without any hook at an extravagant rate. But at present negative impact is highly visible as lot of high end projects are still lying unsold. In such a scenario, there may be blessing in disguise as high profile speculators will be out making way for the actual users.

9

Steps of Real Estate Investing

Real estate investing in Miami real estate is now becoming popular again as there are many properties in foreclosure, short sale, bank reo’s, and government foreclosures. With such an overwhelming inventory of homes available for sale a real estate investor must be able to determine which one to purchase. Investors must follow six steps in order to learn, understand and achieve Miami real estate investment success.

These are the six L steps to Miami real estate investing:

1. Location – Location, location, location is still the key of buying Miami real estate. Buying Miami real estate just because the price is low in a declining area is big mistake that should be avoided. Look for homes in an excellent location like, good schools, economic stable and growing neighborhoods, near shopping centers and malls, near bus stops and metro rails, near hospitals and restaurants. Sometimes it is better to pay a little more for a property in a good location than getting a bargain in a place where it is very hard to sell or rent the asset. Location is often overlooked in purchasing real estate as many investor think they can overcome a bad location if the price is low enough. Out of two homes that are exactly the same, the one in the best location will command a much higher sales price and rental income. Location is the number consideration when purchasing Miami South Florida real estate.

2. Long Term – Real estate investing is a long term proposition. Don’t think you are going to be a millionaire over night. It takes years of hard work and dedication in order to succeed. Hold any property at least one year before selling it. Capital gain taxes will be greatly reduced. Consider renting the property for at two or three years. The rental income generated will help you to properly repair and renovate the property. Many investors purchased properties in the middle of real estate boom with no money down and no equity. These investors were thinking of flipping the homes fast and make a killing in the process. Many homes now in foreclosure are due to investors that were caught in the middle and now realize that real estate investing is very hard to time. Long term Miami real estate investing is the secret to a successful real estate career.

3. Lease Option – Never rent a property with a lease option to buy. Either sell or rent it straight out. A lease option usually is a disaster for both buyers and sellers. The tenant will demand a large discount of the rent to go towards the down payment and closing costs. The problem is that tenant will not buy the property at the end of the lease and the landlord/seller will have wasted a lot of money in rebates given to the tenant/buyer. Demand a 20% or 30% deposit from the tenant/buyer and a clause in the contract that if they default on the purchase they will lose the deposit. This technique will force the tenant/buyer to purchase the property or lose the deposit. The risk of losing the deposit will eliminate the tenant from taking advantage of the landlord by walking out of the contract after receiving a monthly rental discount.

4. Local – Buy real estate close to where you live. Don’t buy real estate in another state or in another country. Keep real estate investing local. Buy in your own county and in your city. The more you know about the area where you are buying the better the decision will be. The investor should always be close to the investment property. The Miami real estate investor should inspect the property often to determine any repair, roof and other problems. The landlord must inspect the property every month when collecting the rent. Check for the number of tenants actually living in the property, check for damages and destruction of the property and overall condition of the place. The investor/landlord will not be able to inspect and determine the condition of the property if it is located far away. Keeping real estate local is an essential step in real estate investing.

5. Leverage – Most real estate books and seminars tell you to use other people’s money when purchasing real estate. This technique is not the best and buyers should try to buy the property in cash if at all possible. Buying a house in cash will help you get a better deal and allow you to negotiate from a position of strength. A cash buyer will always have the upper hand in negotiating with banks, property owners, and other sellers. Cash buyers will not suffer and go into foreclosure if the market turns and they are unable to sell or rent the house right away. Like Dave Ramsey always says “cash is king and debt is dumb”. Buying an investment property in cash is an excellent way to avoid Miami real estate investment mistakes.

6. Learn – Research the property and learn everything about it before you buy. A mistake in Miami real estate investing can be very costly. Usually you make your money when you buy not when you sell. Buying the property at the wrong price the wrong place and at the wrong time could be detrimental. One mistake could wipe you out and put you out of business before you start. Ask questions to the experts, real estate agents, appraisers, mortgage brokers, and other real estate investors. Learn, research, educate yourself in all aspects of real estate investing before you purchase the asset.

It is definitely a buyers market in Miami-Dade County. Miami real estate investors have more choices than ever before when it comes to real estate investing. Investors must follow the L steps, the 6 steps real estate investor guide to successful real estate investing in order to achieve their investment goals in the Miami real estate market.

Real Estate Property Values

Rob Norquist, a real estate agent admits that Newport Beach is as active as it used to be, with some good record sales. He also agrees with the fact that a property, should never be considered deprecated, and as a seller, you should never give up and use the low end price. It is true that, during a certain period of time, depending on the real estate market, client’s desire, real estate auctions, there may be moments when a property’s price drops, but not forever.

Other cities such as, Huntington Beach, Costa Mesa, Irvine or Mission Viejo – are considered among other 25 cities as being the ones with the best real estate property values, with average values of $680,000 and more. The national average value in 2007 was $194,300.

However, some property values are based on subjective answers from residents living in a certain home, so the given numbers , and real estate evaluation may be hanging on a wishful thinking instead of a real appreciation . This is where real estate auctions come in picture, to inform potential clients about the property, and the investment possibilities, giving them a clear image of the real estate’s worth.

Even though some buildings such as Orange County properties , dropped their values in 2007, but they recovered extremely well after. So this is another reason why as a seller, you should never fear if you observe a temporally value drop, because it is normal from time to time.

For instance, about 81% owners, sellers, agents, trusted in 2007 that their estate property values were over $1 million, against 75% in 2006. So things are for the best and it would appear that most of estate agents have finally understood what this business is really about. It takes a lot of patience and ability to maintain your property’s value among top ones on real estate market.
But Norquist, trusts that many Newport Beach arguments are near the mark, sustaining that this city has survived the “housing slump” better than other locations. However, the unexpected surprise attacked more on sales, which he admits that they are on a falling edge right now, but there is still hope for better times.

Newport Beach is very well known for its highest-valued real estate properties in the U.S., being a perfect place for real estate business . It’s location and proximity to the water, and the beach front view increase it’s real estate value considerably. Auctions in this area are very interesting and those who are interested in real estate business domain should never miss them. You can learn a lot on such events.

Experienced real estate agents or even friends will surely advise you that as a buyer you are very likely to come across many real estate properties in foreclosure having perhaps no equity,being over priced . In such moments, lenders sometimes choose to accept a smaller amount than the initial.So you get in the negotiations process. As a hint, when you realize the over pricing phenomenon, you have to understand that this happens when the real estate agent , or seller is aware of the real estate property’s value, and he tries his luck in a raising price. So watch out! The negotiation can become a difficult process especially when reasonable terms are not agreed by both sides: owner and buyer. Negotiations can occur privately or in public, where real estate auctions come in the picture. Of course, a real estate auction is safer and more trustful than a private one. Private negotiations occur especially when the agent is a close friend or relative to buyer’s, and because of the friendly environment some details regarding even the real estate transaction may be skipped. So in situations like this be careful.

Even as a friend, for a real estate agent , money comes first, and friendship after. Of course, during such a negotiation, there can be all sort of problems, such as mortgage value, real estate market, all sort of official formalities, conflict of interests in a particular area etc. Moreover, time a very important issue when real estate auctions are involved. As a general rule, and as an advise for a potential buyer, negotiation process should not be extended on a long period of time, because, as I said before, in time, real estate properties drop their values, and the client’s interest together with it. In this case, not only does the buyer loose, but the real estate agency as well. Why?Because if a property’s value drops, the price must drop as well, if you ever want to sell it again. In this case the under priced phenomenon appears. This is why short sales are preferred. Many Realtors, and clients started using this strategy, because they faced the problem regarding their property’s value.So they decided the selling process should not take too long.

Another important issue refers to the well known “acceleration clause” , which is an official word met in any mortgage document, meaning that the lender, after the real estate property is sold, can demand the payment of the remaining balance for the loan. Realtors can provide more information about this contractual right. If this clause is good or bad for a real estate transaction, it is hard to say, because it has its advantages and disadvantages. Buying a real estate property which has already a mortgage loan represents a pretty raised risk. Why? Because first of all, if the mortgage loan was contracted for many years, depending on the interest’s rate, and marketplace evolution, you may come to pay the house’s price 3 times more. However, if you have experience in monitoring the market place, and find a right moment when every interest’s value drops, you could go for it. It’s kind of a gambling in this business, and Realtors, or individual real estate agents know it best.

Realtors and real estate agents are here on the real estate market, to help clients understand how they can value their houses, what should they look for when trying to sell or buy a house, how to negotiate, and how to win a real estate transaction. Some may say that buying or selling a real estate property is easy, but the fact is that pricing a house is a very difficult process. Many real estate agents, brokers, have suffered many defeats before their first good business, so do not expect their job to be an easy one.

Unfortunately, a concerning price and sales gains of these past years have determined in many cases quitting the real estate business. Many real estate agents who have seen the future preferred to do something else than real estate business. The credit market is also in a critical position, as many Realtors have observed. Mortgage values are also a result of real estate market position right now. Real estate investors have diminished their participation number to real estate auctions, as a sign they have seen it too.

The Keys to Success to Investing in Real Estate

Most real estate professionals flunk within the first few months of trying to create a business enterprise out of real estate investing. The trick begins with a beneficial marketing plan and then practicing a disciplined effort to the marketing plan on a even basis. There is a lot more required to succeed, and you will encounter more tips, tricks and unique real estate marketing techniques in this article.

Is there anyone in your town that doesn’t recognize that you buy homes or that you are a real estate professional? If so, you aren’t performing as well at marketing or rendering real estate investing information about your real estate investing business enterprise as well you could be. I find out real estate investors telling all the time that they aren’t receiving seller phone calls and subsequently aren’t receiving the leads they need to find the real estate business deals they require to earn a living. I say increase the marketing and the sellers will Call. Not only that but if you are canvassing the world (or at least your area) that you buy problem real estate holdings, eventually you will be acknowledged for what you do and sellers will telephone you strictly on your reputation. this is what is called cost effective marketing.

One real estate professional was in a home, garden and hardware store a few calendar weeks ago and went past a couple of guys in an aisle. A conversation was heard while he walked by, I overheard one state, “That is the real estate man”. Now I had never known either of those men and have no idea who they are but that experience lets me acknowledge that I must be doing my business at letting the world to recognize my business is buying real estate in that area. There are many ways to let the area know that you are in the real estate investing profession and getting information out there that helps people realize you buy foreclosures, distressed real estate, do real estate short sales and have got a lot of real estate information and experience to flip properties. Some methods are cheap and some are more expensive. You are going to have to attempt many things and acquire a feel for what brings about for you the best results in your region to get the calls you require to transact real estate deals. I have tried many forms of marketing methods for real estate commercial enterprises of all varieties and have come back to a few that consistently create enough leads for me to purchase the 2 or 3 real estate holdings and houses I want to purchase every single calendar month. They are as follows:

Classified Ads

The classified advertisement in the most prominent newspaper in the region is by far the heaviest producer of leads for local real estate investors that I have determined. I understand it is costly and I understand there are instances it does not generate phone calls but if you are going to persist in the real estate investing business sector just place it in there and leave it. Get used to it making up part of the toll of performing the real estate business. You may expend about $350.00 a calendar month for my 4 line ad and that is the commercial range. I’d consider running it 365 days a year to constantly cue everyone that you are a real estate professional and you purchase real estate in their region.

Over the past few or so years I have watched many “real estate investor” ads come and go. Most folks put them in for a many or even just a couple of calendar weeks and then remove them or try just placing them in on the week ends. Real Estate Marketing just simply does not work this way. Put your real estate ad in the paper and leave it in there. It will more than make up for the price, trust me, and you will see after you finish your first deal. If you are distressed because there are real estate investors ads from many other investors in there, don’t be. They are there because they are getting responses. Just be sure to and actually answer your cell phone and keep it on all the time otherwise you’ll be squandering money.

When a fresh ad for real estate investor information shows up in my newspaper, I will always call on the advertisement. 9 times out of 10 I get a message device or answering service. This is a significant turn off to somebody who needs a resolution to their real estate trouble now. They want to speak to a person who can quiet their anxiety over their current issues with their home and tell them everything is going to be ok. Your answering device won’t do that, they need a human being. As for what to put in the advertising, you will have to work on this one. I have tried various idea and the one I have now hast not changed for over 4 years. I haven’t switched it because I get responses. My ad is:

We Pay CASH FOR HOMES In 24 Hours! Any area, price or condition Call xxx-xxx-xxxx

Now I have had other real estate professionals jockey for place and interchange their ad copy to be leading of mine in the column but it has not made whatsoever difference, at least as far as I can discern. Don’t worry about those things, just get the advertising out there and leave it. It could possibly take a bit of time, perhaps a several weeks to get going but sellers will telephone. As soon as you have your classified advertising running, then you should start working on your other marketing techniques right away. If you only go through one idea a week, within a few weeks or a couple of months you will have a significantly powerful real estate purchasing process.

Ads in the “Freebie” Papers

You might also run advertisements in the freebie papers in your local region or the region you want to conduct real estate investment deals. These are the “Thrifty Nickel”, or whatever they are named in your region. We run both a column ad and a display in this newspaper and expend about $175.00 or so a calendar month for these ads. They pull in seller leads reasonably well and have always rationalized the costs. Remember that these guys are usually open to talking terms on your rates and you will probably get a better rate if you commit to a longer advertising agreement.

Bandit Signs or Road Signs.

Bandit signs are great. They are some of the best lead producing tools around. I have yet to put out a bunch and not be bombed with calls right after I arranged my marketing. I just don’t position them out that often. I might place out a few to a half dozen or so a calendar month and the ones that continue and don’t get taken down continue to pull in phone calls. At an average price of less than $4.00 per sign, they are one of the greatest real estate marketing and advertising values available. Check the net for sign manufacturers for discount signage costs. I use 18 x 24 signs and set them at high traffic crossings around the town I wish to purchase houses in.

I also position a sign in the front yard immediately after purchasing any house. I have purchased several homes in the same regions as a result of marketing this way.

You can either use wood stakes or the wire stakes with your signs. I like the wood stakes because they do not bend like the wire ones, in addition, they are more less expensive and you can find just about any reasonably sized stick of wood or stake at your local hardware store for a really good value. Just get long lengths and trim down to fit. Then just nail the sign to it with the roofing nails with the orange or green plastic tops or you can use screws. There are many variants on what the wording on the sign can say. Keep in mind that traffic will be moving so you want to keep your message short and simple so it may be read. Plus your telephone number must be big, large and easy to read.

If you search the sign advertisement content, you will discover that it is same resemblance my paper ad. I like to brand my advertising because I believe that helps with identification that is probably why the two guys noticed me as a Real Estate Professional..You want to have contrast, so a white sign with dark blue letters usually is the best draw. Some folks swear by black on yellow or black on orange. Again, I say it’s not what or how you say it rather simply that you’re out there marketing and placing out signs that counts. You’ll build a ‘brand image over time if you stay logical with your real estate marketing endeavors. When dealing with bandit signs, be sure that your local code enforcement laws are aware of them. In some areas or counties they can lax on them but a few miles down the road in another county or city, they can be super strict and will ticket you in a minute, pull the signs down and lead off looking for your next posters to go after you again. Some retail merchants in high tax areas can’t put out any A board signage without having them sized and then fined.

Flyers and Bulletin Board Postings

Flyers and related collateral are another cheap way to get the word out that you are a real estate investor buy property, foreclosures or distressed properties. Just create a flyer with any one of the free on-line flyer software internet sites telling people that your are a real estate investor and how to get in touch with you. Make copies for few cents apiece and you have some really inexpensive real estate marketing and advertising. It really is that simple. Then place these flyers on every bulletin board in your Town or region you would like to buy your property, foreclosure or distressed home.. I also recommend that you place some of them in those plastic sheet shielders so the rain won’t ruin them and put them up on phone poles around neighborhoods I like to buy property in.. While not as prominent as the bandit signs, on poles actually in the neighbourhood they still attract phone calls. I carry a file with me in my automobile and put them up whenever I stop at a grocery store or major discount shop or really wherever. Some of the other area to put them are:

· Laundromats
· Taped to the inside of telephone Booths.
· On the counter of any business organization that will let you place them at.
· Bulletin boards at any local or major rebate store (lots of traffic)
· Grocery store bulletin boards
· Fax to Mortgage agents, call first
· Fax to Real Estate Agents, call first and they may get a lot of these.
· Take them Door to Door in target regions
· Employment centre Bulletin board
· County Courthouse or public office Bulletin board

These are just a few illustrations. Any place that will allow you to set one is a good place. You can never let too many people know that you are a real estate investor and are in the foreclosure market.

Imprinted and/or Promotional Items

Optimum Real Estate Investor Marketing Ideas – These no-lose ideas are sure to get you top hits on leads and calls for your Real Estate Investing occupation.

These are some of my favourites and most fun. While they are not the top producers of leads or the least costly, they will sure position you apart from the average investor.

Pen Knives – These tiny Swiss army knives are the neatest things. They are actually key chains etched with your content, mine being: WE BUY HOMES – All cash or take over payments within 24 hours! Call xxx-xxx-xxx I assure if you give one of these to somebody they will hold on to it it and if they conceive of selling, they will think of you. They are about $1.75 each.

Key Chains – I give these to all my buyers with the keys to their new house on them and leave them all over the place. They come in the shape of a house or #1 or whatever style you like and have your message on them. You can guess what mine says. Cost – about $. 25 cents apiece.

Pens – I use these all the time. Whenever I sign a sales receipt or anything I leave my pen. I cannot tell you how many outcries I have gotten off of these things and since I often need one, I always possess one to give away. My attorney even has a supply on his closing table. I possess two types printed. One for sellers says “We Buy Homes!” and one for buyers says “Everyone Qualifies”. Cost – about $.26 cents per unit.

Coin Holders – These you hardly find anymore so everyone is surprised when I have them. I leave these things everywhere. Mine are bright yellow with blue letters and my message. Cost – about $.30 cents apiece.

I leave all of these promotional items everywhere, on the top of gas pumps, on end-cap displays in grocery stores and in department stores. I look at it this way, if I give away 100 pens, 50 knives and 50 coin holders a month, that is only a little over $100 bucks a month. That is still cheap advertising. And with the money you can make in a real estate deal, it is ‘no cost’ marketing strategy. You can get any of these promotional advertising products at many major promotion marketing manufacturer, and you can find companies online as well.

Business Cards

I order business cards by the 1000’s and you should as well, there are a lot of great places online that can print up nice (and cheap) cards for you and that specialize in real estate as well. As for business cards, well, they are cheap, mine are about $50.00 for 2000, and I pass them out and leave them everywhere I possibly can. I leave my cards everywhere, in pay phones, on restaurant tables, my kids even have their own supply to pass out. Try to get a box a week out. The card doesn’t have to be fancy, in fact the simpler the better. My card is bright yellow with blue letters and says:

WE BUY HOUSES Foreclosure? Need Repairs? Bad Tenants? Divorce? CASH IN 48 HOURS! OFFERS MADE ON ALL CALLS! XXX-XXX-XXXX

Car Magnetics

Magnetics are one of those things where you spend once and get use for a long time. Mine cost about $75.00 and are yellow with blue letters. They say:

WE BUY HOUSES! FA$T CA$H XXX-XXX-XXXX

or

SELL YOUR HOME FAST WE PAY CA$H XXX-XXX-XXXX

I have gotten several deals from these signs. Remember to order a smaller set for the back of your car/truck. People have more of a chance to read the message when they are riding behind you.

Clothing

I like golf shirts and oxford dress shirts with my logo on them. There’s plenty of adverting houses that will help you design a logo if you don’t have one or use the one you already have. There is no charge for set up and all items ordered include your embroidered logo free.

I pass custom imprinted hats out to everyone I know who wears one and have given away many shirts as well. They really look nice and present a nice image for your business.

Other Advertising Tools

There are many other shapes of advertising, some I have tested in the past such as billboards, door hangers, yellow pages, television and radio advertisement. I even have a traveling billboard, an old SUV painted bright yellow with blue WE BUY HOUSES! and my telephone number that I drive around and park overnight at dissimilar places. It brings the calls! Get the marketing going and let the world know who to call when they have a house to sell, a pre-foreclosure, distressed property or someone who just wants to get out of their house.. If that phone isn’t ringing, you aren’t making money so you need to get a good marketing strategy going and stick with it!

Addicted to Real Estate

The All-Money-Down Technique

So how does the all-money-down technique work by purchasing a home with cash? First of all, let me repeat that I really didn’t have any cash, but I had a significant amount of equity from Terry’s home and several homes that I owned put together to give me a substantial cash down payment. Banks and mortgage companies alike will accept money from a home-equity line of credit as cash to purchase a home. At least they did in 1997 under the financial guidelines of the day. What you must remember about mortgages and lending is that the guidelines change constantly, so this technique I used in 1997 may or may not be able to be used in the future. Whether it is or isn’t able to be used again doesn’t really matter to me as I believe that there will always be a way to buy real estate with limited money down sooner or later. There will always be a technique to acquire real estate but exactly how that will be done in the future I’m not completely sure.

I began purchasing homes in the Mayfair section of Philadelphia with the prices in the $30,000 to $40,000 per home price range. I would purchase a home with three bedrooms and one bathroom on the second floor with a kitchen, dining room, and living room on the first floor and a basement. What we call a row home in Philadelphia would consist of a porch out front and a backyard the width of the home. Most row homes in Philadelphia are less than twenty-two feet wide. For those of you who are not from Philadelphia and can’t picture what a Philadelphia row home looks like, I suggest you watch the movie Rocky. Twenty-two homes on each side of every block will really test your ability to be a neighbor. Things that will usually cause an argument with your Philadelphia neighbors often stem from parking, noise your children make, where you leave your trash cans, parties, and the appearance of your home.

In 1998 my girlfriend and I moved in together and to the suburbs of Philadelphia called Warminster. After living on a street in Tacony, much like Rocky did, I really looked forward to having space between my home and my next-door neighbor. I told Terry not to even think about talking with the people who lived next door to us. I told her if one of them comes over with a fruitcake I am going to take it and punt it like a football right into their backyard. I believe I was suffering from Philadelphia row home syndrome. My new neighbors in Warminster turned out to be wonderful people, but it took me eighteen months before I was willing to learn that.

So you just bought your row home for $35,000 in Mayfair, and after $2000 in closing costs and $5000 in repair costs, you find yourself a good tenant who wants to rent the home. After renting the home with a positive cash flow of $200 a month, you now have an outstanding debt of $42,000 on your home equity line of credit that will have to be paid off. When purchasing the home, I did not get a mortgage as I just purchased a home for cash as it is said in the business. All monies I spent on this house were spent from the home-equity line of credit.

The move now is to pay off your home-equity line of credit so you can go do it again. We now go to a bank with your fixed-up property and tell the mortgage department that you want to do a cash-out refinancing of your real estate investment. It helps to explain that the neighborhood you purchase your property in should have a wider range of pricing as the neighborhood of Mayfair did in the mid-90s. The pricing of homes in Mayfair is quite unusual as you would see a $3000 difference in home values from one block to the next. This was important when doing a cash-out refinancing because it’s pretty easy for the bank to see that I just bought my property for $35,000 regardless of the fact that I did many repairs. I could justify the fact that I’ve spent more money on my home to fix it up, and by putting a tenant in, it was now a profitable piece of real estate from an investment standpoint.

If I was lucky like I was many times over doing this system of purchasing homes in Mayfair and the appraiser would use homes a block or two away and come back with an appraisal of $45,000. Back then there were programs allowing an investor to purchase a home for 10 percent down or left in as equity doing a 90 percent cash out refinance giving me back roughly $40,500. Utilizing this technique allowed me to get back most of the money I put down on the property. I basically paid just $1,500 down for this new home. Why did the mortgage companies and the appraisers keep giving me the numbers I wanted? I assume because they wanted the business. I would only tell the bank I need this to come in at $45,000 or I am just keeping it financed as is. They always seemed to give me what I wanted within reason.

This whole process took three to four months during which time I may have saved a few thousand dollars. Between the money I saved from my job and my investments and cash out refinancing, I had replenished most or all of my funds from my home-equity line of credit that was now almost back to zero to begin the process again. And that is exactly what I intended to do. I used this system to purchase four to six homes a year utilizing the same money to purchase home after home after home over and over again. In reality, the technique is a no-money down or little money down technique. At the time maybe I had $60,000 in available funds to use to buy homes off of my HELOC, so I would buy a home and then replenish the money. It was a terrific technique that was legal, and I could see my dream of being a real estate investor full-time coming to an eventual reality even though I wasn’t there yet.

During the years from 1995 to 2002, the real estate market in Philadelphia made gradual increases of maybe 6 percent as each year went on. I began to track my net worth that was 100 percent equity, meaning I had no other forms of investments to look at when calculating my net worth. Generally speaking, the first five years of my real estate career did not go well because of the bad decisions I made purchasing buildings and the decline in the market. Furthermore, my lack of knowledge and experience in repairs made it a rough. The second five years of my real estate career that I just finished explaining didn’t make much money either. I supported myself primarily through my career as a salesman, but I could definitely see the writing on the wall that down the road real estate was going to be my full-time gig.

Realty Professionals of America

I own an office building that has a real estate company as a tenant called Realty Professionals of America. The company has a terrific plan where a new agent receives 75 percent of the commission and the broker gets only 25 percent. If you don’t know it, this is a pretty good deal, especially for a new real estate agent. The company also offers a 5 percent sponsorship fee to the agent who sponsors them on every deal they do. If you bring an individual who is a realtor in to the company that you have sponsored, the broker will pay you a 5 percent sponsorship out of the broker’s end so that the new realtor you sponsored can still earn 75 percent commissions. In addition to the above, Realty Professionals of America offers to increase the realtor’s commission by 5 percent after achieving cumulative commission benchmarks, up to a maximum of 90 percent. Once a commission benchmark is reached, an agent’s commission rate is only decreased if commissions in the following year do not reach a lower baseline amount. I currently keep 85 percent of all my deals’ commissions; plus I receive sponsorship checks of 5 percent from the commissions that the agents I sponsored earn. If you’d like to learn more about being sponsored into Realty Professionals of America’s wonderful plan, please call me directly at 267-988-2000.

Getting My Real Estate License

One of the things that I did in the summer of 2005 after leaving my full-time job was to make plans to get my real estate license. Getting my real estate license was something I always wanted to do but never seemed to have the time to do it. I’m sure you’ve heard that excuse a thousand times. People always say that they’re going to do something soon as they find the time to do it, but they never seem to find the time, do they? I try not to let myself make excuses for anything. So I’ve made up my mind before I ever left my full-time job that one of the first things I would do was to get my real estate license. I enrolled in a school called the American Real Estate Institute for a two-week full-time program to obtain my license to sell real estate in the state of Pennsylvania. Two terrific guys with a world of experience taught the class, and I enjoyed the time I spent there. Immediately after completing the course at the American Real Estate Institute, I booked the next available day offered by the state to take the state exam. My teachers’ advice to take the exam immediately after the class turned out to be an excellent suggestion. I passed the exam with flying colors and have used my license many times since to buy real estate and reduce the expenses. If you are going to be a full-time real estate investor or a commercial real estate investor, then you almost have to get a license. While I know a few people who don’t believe this, I’m convinced it’s the only way.

I worked on one deal at $3 million where the commission to the buyer’s real estate agent was $75,000. By the time my broker took a share, I walked with $63,000 commission on that deal alone. With the average cost per year of being a realtor running about $1200 per year, this one deal alone would’ve paid for my real estate license for fifty-three years. Not to mention all the other fringe benefits like having access to the multiple listing service offered too many realtors in this country. While there are other ways to get access to the multiple listing services or another program similar to it, a real estate license is a great way to go.

Some of the negatives I hear over and over again about having your real estate license is the fact that you have to disclose that you are realtor when buying a home if you’re representing yourself. Maybe I’m missing something, but I don’t see this as a negative at all. If you’re skilled in the art of negotiation, it’s just another hurdle that you have to deal with. I suppose you could end up in a lawsuit where a court of law could assume because you are realtor you should know all these things. I don’t spend my life worrying about the million ways I can be sued any more than I worry about getting hit by a car every time I cross the street.

The Addict
From his first investment property over 20 years ago to his relentless search for the next great deal every day, Falcone is a non-stop real estate investment machine!

Get Addicted
Sometimes addiction is a very good thing. In this book Phil Falcone, the ultimate real estate addict, will show you how to achieve amazing success as a real estate investor:

• Delve into the details of actual deals he negotiated and learn why his methods were so effective
• Discover why his residential to commercial real estate strategy will create ultimate wealth
• Learn how he used apparent liabilities (OCD, insomnia, and workaholic behavior) to help him achieve his goals
• Explore why he can’t stop investing in real estate, and how you can start controlling your own financial destiny through real estate

Frank, funny and informative, Addicted to Real Estate will inspire any investor to achieve higher levels of drive and success in the rewarding world of real estate.

Real Estate Leads For Realtors

Because real estate prices have dropped quite a bit, the potential commissions that real estate agents and brokers could earn have also dropped. But the drop in commissions can be more than offset by the amount of properties that can be sold. And getting quality real estate leads is one of the keys to making this a reality for real estate professionals. This is because there are so many more properties on the market now than there were before the bubble burst.

The rise in the number of homeowners who are underwater on their mortgages has increased so much that a very large number of them have decided that they cannot afford to stay in their homes. They would rather sell their home and buy a comparable home for a much lower price, and take the loss so that they can improve their cash flow situation by having a lower mortgage payment each month. And since there is no shortage of properties to buy, these people had no problem finding a suitable home for a good price.

And another result of the rise in available properties is that more and more people are becoming first-time homeowners. Since prices on homes are falling, more and more people are able to afford a home for the same amount they are currently paying in rent. So the logical choice for these people is to buy a house rather than continuing to rent.

These factors all lead to one thing – a higher need for real estate agents to help the buying and selling of all of these properties. Therefore, even though prices have fallen, the quantity of available properties, buyers, and sellers has raised which more than makes up for the lower prices in terms of how much a given real estate agent could make in the current real estate market. And as we all know, the more clients a real estate agent has, the more properties they’ll sell and the more money they’ll make.

The problem comes in when a real estate agent has already gone through their current client list. The best way for them to get more clients is to somehow obtain more real estate leads. Not only do they need more leads, they need high quality leads if they are going to be successful in converting a high number of them into clients who actually follow through on buying and/or selling one or more properties.

So how can you get more real estate leads? There are of course many different ways. These include buying them from an agency that offers them, advertising, subscribing to lead generation websites, developing and keeping current your own real estate website that draws potential

clients to it, and best of all by getting them through your own network. There are undoubtedly other ways of generating real estate leads as well, but these are the most common methods – all of which have proven to work to a certain degree.

One of the easiest ways to get real estate leads is by purchasing them. There are companies whose sole purpose is to find people who want to buy or sell a property. They then sell this information to people who are willing to pay for it. So if you are a real estate agent looking for real estate leads and either don’t have the time to find your own, or simply don’t want to, then this may be a good option for you.

There are two different major ways to do this. You can purchase the real estate leads from a company as a set of data that you will get in the form of a list or spreadsheet. Then you will need to start sifting through them and using the data available to qualify and categorize them yourself. And after that, it’s time to start making calls to find out they are valid leads or not.

The other way of purchasing real estate leads is by subscribing to a real estate lead generator website that will send you much smaller lists of leads on a regular basis. This can be nice because the information is likely to be much more current than buying a single very large list of leads. But this also means that there are fewer to work with so it doesn’t give you as much freedom in terms of choosing who to contact first.

Purchasing real estate leads or subscribing to a lead generation website can also be expensive. This can be a very bad thing since the whole intent of buying leads is to find clients, sell properties, and make commissions, if the leads that you buy don’t turn into commissions. In that case, not only did you not sell any properties (or many properties), but you wasted money on worthless information, and you wasted time contacting worthless leads when you could have been working on finding good real estate leads instead.

Another way to generate real estate leads is by advertising. If you are a real estate agent, broker, or business person, advertising your services may be a good way to generate real estate leads. This type of lead generation is great because rather than you doing the work to find people who want to buy or sell a property, the tables are turned and they come looking for you instead.

In addition to having people try to find you instead of you trying to find them, there is another benefit to advertising to generate real estate leads. The people who are trying to find you are already definitely interested in buying or selling a property. This means that you don’t have to worry about whether they are going to turn out to be qualified leads or not, because they definitely will be.

A similar way to generate real estate leads by advertising which can be even more effective than simply advertising on a billboard or in the paper is by setting up your own real estate website. Websites are surprisingly inexpensive to have hosted, and having one developed for you doesn’t have to be expensive either. And if you learn the basics of website development, you’ll be able to maintain it by yourself after it’s been set up so that you can always keep it current.

The reasons to keep your website current cannot be understated. First, you have to keep it updated with the properties you are trying to sell so that the people who visit your website will have something to look at – and since this list of properties will be changing frequently as your client list grows and changes, you’ll need to change your website often to incorporate the new properties and eliminate the ones that are no longer available.

A second reason for keeping your website updated on a regular basis your page rank will grow higher. Search engines use a number of factors to determine how relevant they are to certain keywords, and where to display them in a list of search results. And one of the biggest things that moves a website toward the top of the list is it’s page rank, which is greatly affected by how active and how current the website is. So the more often you update your website, the higher its page rank will be, the higher it’ll show up in search results related to real estate keywords, and the more visitors you’ll get to your site.

Once you get visitors to your site, you’ll be getting the exposure you want to potential clients for free. They can stay on your site for as long as they want to and look at as few or as many properties as they want to. And you don’t have to do anything in order to help them. In fact there could be thousands of people all on your website at the same time. That is something that you would not likely ever have the opportunity to do in person. This phenomenon is what is known as leverage, and leverage is what can turn a small business into a fortune 500 business in short order when managed correctly.

The best way to do real estate lead generation also happens to be one of the most difficult – at least in the beginning. The method of finding leads is by building a very large network, and using it. This is one of the best ways to get leads because it is one of the most surprisingly effective ways. But unfortunately, it’s also one of the more difficult ways to start, and takes a while to yield significant results.

The first thing you’ll need to do is to start building your network. And it’s not that you just need to start building it, you need to intentionally focus on building your network each end every day, no matter where you are or who you’re talking to. This is because for most people, networking does not come naturally.

If you are like most people, you are probably somewhat shy and don’t make it a point to intentionally meet and talk to new people on a regular basis. But if you want to build a network, you’ll have to do exactly that. This is something that can come as a challenge to say the least, both emotionally and technically, but it is well worth the effort in the long run.

It can be emotionally difficult because a large part of building a large network is dealing with rejection. And if you want to build a large network quickly, you’ll have to deal with a lot of rejection each and every day. Too many people, being rejected is taken personally and it ends up wearing them down so that they eventually give up before they gain the benefits that building a large network provides. But if you can learn how to not take rejection personally, you’ll succeed where so many others have given up and failed as a result.

And networking to generate real estate leads can be done almost anywhere. When you need to put some gas in your car, park on the other side of the pump from someone who’s already there and try to strike up a conversation where you’ll be able to tell them that you’re in the real estate business and can help them or anyone else they know who may be looking to buy or sell. And if you’re really serious about it, you may want to only get $10 or some other small amount of gas at a time so that you’ll need to go to the gas station more often and have more opportunities to network.

You can also build your network by meeting new people at any other place. You could talk to someone at the grocery store, library, church, waiting in line at the bank, or anywhere you are around other people for more than a few minutes at a time and starting a conversation wouldn’t be too awkward. It can be done anywhere, with just about anyone, at almost any time. And the more dedicated you are to it, the faster you’ll be able to grow your network and the better off you’ll be in the long run.

Some of the best ways to network are by talking to the people you already know. These are people who are already in your network, and you can use them to help you grow your network even larger. The most obvious way is to simply ask them if they are interested in buying or selling a property in the near future, and to keep you in mind if they are.

But another way to help you grow your network is to ask them who they know that may be interested in buying or selling a property. You are basically asking them for real estate leads using different words. You could ask them for the names and numbers of people who they know who may be interested in buying or selling a property, or you could ask them to give your contact information to the people they have in mind when you ask them that question.

It’s a great idea to have business cards with your contact information made up when you’re networking. That way you won’t have to rely on people’s memories which are definitely not the most reliable things when compared to something they can simply read from a card. Cards on the other hand make it so that the person you are giving your contact information to doesn’t have to rely on their memory, and it puts forth a more professional image as well which can only benefit you.

Real estate values have taken a dive and one of the results has led to there being many, many more properties on the market now compared to before the economy took a dive in 2008. This means that even though the prices are lower, the higher quantity of properties on the market make it possible to buy and sell more of them and make more money in commissions as a result which will more than make up for the decreased individual property values.

I order to sell more properties you must have more clients. And to get more clients, you need to have more real estate leads. These real estate leads can be generated in a variety of different ways, all of which can be useful to real estate professionals. Having reliable leads will definitely result in more clients, more sales, and more money made in commissions. Purchasing them, advertising for them, or getting them from your network is all great ways go get leads that all have their own strengths and weaknesses. Pick the one that will work best for you, and you’ll be on your way to making more money through real estate in less time that you think.

Real Estate Agents and the Internet

Then and Now

Ten years ago, a search for real estate would have started in the office of a local real estate agent or by just driving around town. At the agent’s office, you would spend an afternoon flipping through pages of active property listings from the local Multiple Listing Service (MLS). After choosing properties of interest, you would spend many weeks touring each property until you found the right one. Finding market data to enable you to assess the asking price would take more time and a lot more driving, and you still might not be able to find all of the information you needed to get really comfortable with a fair market value.

Today, most property searches start on the Internet. A quick keyword search on Google by location will likely get you thousands of results. If you spot a property of interest on a real estate web site, you can typically view photos online and maybe even take a virtual tour. You can then check other Web sites, such as the local county assessor, to get an idea of the property’s value, see what the current owner paid for the property, check the real estate taxes, get census data, school information, and even check out what shops are within walking distance-all without leaving your house!

While the resources on the Internet are convenient and helpful, using them properly can be a challenge because of the volume of information and the difficulty in verifying its accuracy. At the time of writing, a search of “Denver real estate” returned 2,670,000 Web sites. Even a neighborhood specific search for real estate can easily return thousands of Web sites. With so many resources online how does an investor effectively use them without getting bogged down or winding up with incomplete or bad information? Believe it or not, understanding how the business of real estate works offline makes it easier to understand online real estate information and strategies.

The Business of Real Estate

Real estate is typically bought and sold either through a licensed real estate agent or directly by the owner. The vast majority is bought and sold through real estate brokers. (We use “agent” and “broker” to refer to the same professional.) This is due to their real estate knowledge and experience and, at least historically, their exclusive access to a database of active properties for sale. Access to this database of property listings provided the most efficient way to search for properties.

The MLS (and CIE)

The database of residential, land, and smaller income producing properties (including some commercial properties) is commonly referred to as a multiple listing service (MLS). In most cases, only properties listed by member real estate agents can be added to an MLS. The primary purpose of an MLS is to enable the member real estate agents to make offers of compensation to other member agents if they find a buyer for a property.

This purposes did not include enabling the direct publishing of the MLS information to the public; times change. Today, most MLS information is directly accessible to the public over the Internet in many different forms.

Commercial property listings are also displayed online but aggregated commercial property information is more elusive. Larger MLSs often operate a commercial information exchange (CIE). A CIE is similar to an MLS but the agents adding the listings to the database are not required to offer any specific type of compensation to the other members. Compensation is negotiated outside the CIE.

In most cases, for-sale-by-owner properties cannot be directly added to an MLS and CIE, which are typically maintained by REALTOR associations. The lack of a managed centralized database can make these properties more difficult to locate. Traditionally, these properties are found by driving around or looking for ads in the local newspaper’s real estate listings. A more efficient way to locate for-sale-by-owner properties is to search for a for-sale-by-owner Web site in the geographic area.

What is a REALTOR? Sometimes the terms real estate agent and REALTOR are used interchangeably; however, they are not the same. A REALTOR is a licensed real estate agent who is also a member of the NATIONAL ASSOCIATION OF REALTORS. REALTORS are required to comply with a strict code of ethics and conduct.

MLS and CIE property listing information was historically only available in hard copy, and as we mentioned, only directly available to real estate agents members of an MLS or CIE. About ten years ago, this valuable property information started to trickle out to the Internet. This trickle is now a flood!

One reason is that most of the 1 million or so REALTORS have Web sites, and most of those Web sites have varying amounts of the local MLS or CIE property information displayed on them. Another reason is that there are many non-real estate agent Web sites that also offer real estate information, including, for-sale-by-owner sites, foreclosure sites, regional and international listing sites, County assessor sites, and valuation and market information sites. The flood of real estate information to the Internet definitely makes the information more accessible but also more confusing and subject to misunderstanding and misuse.

Eight Tips For Launching Your Real Estate

Eight Tips for Getting Started in Real Estate Investing

Introduction

This article is just the basics for getting started in real estate investing. This is not a how to article but an article that gives you some information about things to do to get started. Everything in this article is tools that can be applied to helping anyone get started in real estate investing. I am going to give you my eight keys to getting started. Nothing is right or wrong but reflects the point of view of the author. Laws and legal practices vary from state to state, and laws can change over time. The author does not vouch for the legality of his opinions, nor is there any intent to supply legal advice. The author strongly encourages the reader to consult with professionals and an attorney prior to entering in any real estate transaction or contract. The author is not a writer but he is a real estate investor. There will be grammar mistakes and errors, so don’t be too critical of the grammar but focus your energy on what is being said. With that said prepare yourself to think a little differently and expand your mind. Let’s get started on an amazing adventure.

The Eight Tips are as follows

1. Desire
2. Goal Setting
3. Learning What To Do
4. Attending a Real Estate Investing Seminar
5. The Billings Montana Market
6. Finding a Mentor
7. Your Real Estate Team
8. Just Do IT

1. Desire

Before we get in to the bolts and nails of real estate investing in I want to talk to you about desire. If you are going to be successful at anything in life including real estate investing you have to have the desire to do it. Desire is defined as longing or craving, as for something that brings satisfaction or enjoyment. Desire stresses the strength of feeling and often implies strong intention or aim. In real estate investing if you don’t have a desire to learn and grow as a human being and really get satisfaction out of it, then real estate investing is going to be hard to do. When I go out and look at a property it brings me a lot of enjoyment. Every aspect brings me joy from talking to home owners, figuring out how I can make a deal work, to buying the house and to finding a good homeowner or tenant for the house. Real estate investing may not be for everyone but real estate investing can offer anyone the financial freedom we all crave for. If you do not have the desire for real estate investing that is ok, it can still help you to live your dreams and help you to get where you want to go in the future.

Why is real estate investing an amazing avenue for anyone to live out all of their dreams? Let me ask you a few questions. Do you have enough money to do anything you want? Do you have everything you want? No debt? A nice house? Great Marriage? The freedom to do anything regardless of how much it costs and the time it takes? If you have all of these things then you are one of the few people in America who does. Most people may be working fifty hours a week and making just enough to pay their bills. In today’s day and age most people are living pay check to pay check never really knowing if they will make enough to pay the bills that just keep piling up. If you cannot keep up with your monthly bills how are you going to plan for retirement or send your kids to college or have time to enjoy life. The answer to all of these questions is becoming financially free. Now it’s not going to be easy everyone will have to get off the couch and out of their comfort zone. Real estate is proven to be one of the fastest ways to get your out of the rat race of the nine to five and begin living the life you deserve to live. Everyone wants something different out of their life. Some dream of traveling the world, spending more time with family, volunteering, golfing, laying on a beach, giving back to the community, or anything that will make them happy. There are thousands of things that make people happy.

Making it in real estate takes a person who has a strong desire to change their lives for the better and think big. Anyone can become a great real estate investor. It is going to take a lot of work and can be a struggle at times but in the end it will be the most amazing feeling ever. The people that make it in real estate investing all have a few things in common. First they run their real estate investing business like any other business out there. Second they get out there and network with anyone and everyone. Some people might be like me and have a hard time talking to other people. If you are that is ok, anyone can learn how to become a people person, it just takes hard daily work. You have to push yourself past your comfort zone. The third thing is that you cannot be afraid to fail. Everyone has failed at something but the most successful people out their learn from their failures. The fourth thing is that you have to put a good team together. I will go into putting a team together in a later chapter. The concept of putting a team together is so that when you don’t know something you have team members that know what to do and can help you with questions. The can also make sure that you are not working yourself to death. You do not want to be the person doing everything in your business. Doing everything is a receipt for failure. You have to put together good people who you can trust and rely on. The fifth thing is that you need a mentor. Sixth and final is the desire to do it. No one can become successful at something if they don’t want to do it and don’t get satisfaction out of what they are doing.

2. Setting Goals

Having goals is one of the most important aspects of achieving what you want in life. You don’t want to just have your goals up in your head you want to write them down and past what you have wrote on the wall somewhere or in the bathroom mirror. You want to review your goals daily and read them out loud to yourself. This way you remind yourself everyday why you are building your business.

How should you start to write down you goals? First off you should think big, and by big I mean HUGE. If your goals are too small you will easily achieve them and have nothing else to look forward too. You should start off by asking yourself the question if I had all the money and time in the world what would I do, what would I buy, how would I spend my time, and how would I spend my energy. Are you starting to write these down? Well you should be. Think about what you want, spending time with family, traveling the world, the best cars, a castle, owning a small country, running for president, having the biggest real estate investing business in your area or in the country. Whatever your dreams and what you want out of your life, write it down. Some of my goals are becoming free, traveling the world, having a Ferrari, having 10 vacation homes all over the world. Right now I am just trying to get you out of your comfort zone of thinking and let your imagination run.

There are several ways to set goals. I have learned a lot of ways you can set you goals and there is no right or wrong way. The best ways that I have found to set your goals is to break them up into two categories. First your short term goals. This should be goals from a month out to around a year. The second is your long term goals these goals are you think big goals and what you see for your future.

For year one I like to first make a list of what I want to achieve this year and I will give you an example of how to do that. For year one you want to be very specific first you want to list what you want your income to be at the end of the year, next how much cash in the bank you want (this is money in your checking account, not assets). Next you want to list how much you are going to give. Giving is a very important, this can be giving to charity, giving of gifts to friends and family, giving to your school or anything you can dream of. As long as what you give brings joy to others who need it more than you. Next list what bad habits you have that you want to eliminate. Weather is be quitting smoking, spending too much on junk, drinking too much, working too much, not spending enough time with family, too much TV, not exercising and many more. We all have bad habits that need to be changed in order for use to grow as human beings. Under each of these bad habits list out some steps that you can take in order to quit them. If you bad habit is being lazy and not exercising enough what can you do to change that. Well you can get a gym membership or a home work out program. Commit yourself you following through with a plan to work out 3-5 days a week. For you to change these bad habits you have to be totally committed and follow through with a detailed plan you set for yourself. After you have your plans in place you should start listing several things you want to achieve or do in the next year. This can be start a successful business, spend time with family, travel to 2-5 places and so on. Now under each of these you should also write a detailed plan on what you need and what you need to do in order to achieve these goals. Finally you should take all of this information you have a write on page on what you see your life being over the next year. Doing this is a great exercise to really see what you want out of life.

Goals Year One

This is what I am going To Do This Year
Income: $500,000
Cash: $100,000
Give: $20,000

Bad Habits that will be changes:

Over Sleeping 1. Go to bed at 11 p.m. 2. Use a timer and set it for 8 hours 3. Set the timer on the other side of the room

Buying things that you don’t need: 1. Going out shopping less 2. If you have the urge to buy something think to yourself is thing item going to help me to achieve my goals of becoming financially free? 3. Tell friends what you are doing, so they can help to stop you.

What I want to Achieve:

Start a successful Real Estate Investing Business: (you should write a detailed step by step plan of everything you need in order to achieve your goal)

Travel: Where do I want to visit? 1. Gators football game (what I need to do it, money, etc)

And last your own page about what you want to achieve using words like I will and only positive words.

For long term goals you don’t need to be as specific right now, but you should list them and under them list a few steps or smaller goals that need to be achieved before you are able to achieve them. With the long term goals always think big. Another good exercise for long term goals is to make a collage of you goals. Put pictures of the house you want on it, places you want to travel, a picture of your family, a number of what income you want in or anything you can think of.

3. Learn

Knowledge builds confidence and destroys fear. If you are starting any kind of business you need to learn the ins and outs of that business. The best way I have found to learn about real estate investing is to read all about it. But once you know it you have to apply what you have learned. Learning and reading is just one step to take. There are thousands of books on the market about real estate investing and everyone has something you can learn from. You don’t just want to read real estate investing books though. You also want to fill yourself with motivational and leadership books. Every successful person that I know if a reader and they all spend at least thirty minutes a day reading something that will teach them about improving their business or helping themselves to become a better person. Some of the best books that I would recommend reading are listed below.

1. Rich Dad Poor Dad by Robert Kiyosaki (read this first and also ready everything in the rick dad poor dad series, great books to start with and will expand you mind)
2. Be a Real Estate Millionaire by Dean Graziosi
3. Flip your way to financial freedom by Preston Ely (this is an E-Book)
4. Four hour work week by Timothy Ferriss
5. The Attractor Factor
6. Short Sale Pre-foreclosure Investing by Dwan Bent-twyford and Sharon Sestrepo
7. Keys to success, by Napoleon Hill
8. Think and Grow Rich by Napoleon Hill
9. How to win friends and influence people
10. Any Book by John C. Maxwell (he has tons of amazing leadership books)
11. Getting Started in Real Estate Day Trading by Larry Goins
12. The E Myth by Michael Gerber
13. How to be a quick turn real estate millionaire by Ron Legrand
14. The Power of Full Engagement
15. The It Factor
16. Anything by Anthony Robins

There are tons more you can read but these will give you a great start. You should also read books on negotiating, sales, motivation, and biographies on American business people.

I hope this list gives you the knowledge it has given me. If you learn and apply what you have learned from these books there is no reason that you should not become very successful.

4. Attend a Real Estate Investing Seminar

Attending a Real Estate Investing Seminar can be one of the best places to learn about real estate investing from some very well known experts. There are several seminars going on all over the country every weekend. If you live in a big city it will be very easy to find one. If you live in a town like Billings Montana you might need to travel a little ways to find one. Now most of the best meeting cost money to attend them. Some range from five hundred dollars for three days and some can be up to $20,000. There are a few that I would recommend. Than Merrill is a great speaker to go hear. I have learned a ton from him. You can find his company online by Google searching him. Also rich dad poor dad has seminars all over the country. I attended one of their seminars in Billings Montana for only $500 dollars and learned a ton from it. There is also Preston Ely, Larry Goins, and hundreds of speakers out there. If you find a great book that you really enjoyed, then just simple search for that person online and see if they are speaking somewhere or offer a seminar close to you.

Another reason I recommend going to a seminar is because they get you pumped up and motivated. I have not yet found anything else that just gets you feeling like you can do anything. When you get back from one of these seminars you will have tons of energy and knowledge. Every time I get back from one all I want to do is going out and do a deal or ten.

These seminars will also provide you with several opportunities to purchase amazing real estate investing tools, software or learning material at a fraction of the cost. Believe me when I tell you all of the low priced seminars try to sell you something. But a lot of times what they are trying to sell is some really good stuff.

Another reason to attend a seminar is to network with other investors and build relationships with them. You can meet other investors who you can partner with on a deal, sell a deal too, people who will provide you with deals and so on. You should have hundreds of business cards made up and try to give them all out. You never know how much one business card you hand out can make you.

5. Learn About the real estate market in your area

Most real estate investors start their career off my investing around where they live. This is why I do my real estate investing in Billings Montana. You can venture out when you have more experience. The reason behind this is because we feel more comfortable with the areas and know the areas better. It is also easier to get local real estate information that we need. Investing in your local market is also cheaper to start out, there is less travel costs, you can see what you are buying and it may give you a feeling a comfort.

First you have to decide which part of town is the best place to invest in. This can be determined by what kind of real estate investing you choose to do. I have not gone over the types of real estate investing but some include rehabbing (fixing up and selling), wholesaling (finding deals and selling them to other investors), buying to rent, and there are a few others. These are the real estate strategies that I use for the most part. When looking at the market you need to see where other investors are buying their houses. Most of the best deals will be found in low to middle class neighbors hoods. By low I don’t mean drug infested war zones, what I mean is blue collar safe neighbor hoods that might have somewhat older houses and houses that are not on the higher end price side. Now you can find deals in the higher priced neighbor hoods but most will be in the low to middle income neighborhoods. When looking where others are buying ask local realtors, other investors or appraisers.

When talking with investors ask them several questions such as what neighborhoods they prefer, what type of houses they buy (3 bed 2 bath), and what they do (rehab, rent, wholesale). You should not look at other investors as competition but try and work with them.

There are different types of markets such as appreciating markets, flat markets, and deprecating markets. Appreciating markets are markets that there is no enough houses or a very high demand for houses which causes the price of houses to go up. The reason there is a high demand for housing can be because of job growth, a very appealing area, or several reason. Flat markets are markets that have no or very little growth. This means that there is not a lot of demand; buy just enough to fill every ones needs. Depreciating markets are where there is a lot more houses than people to fill those house. This causes house prices to start going down. This can be because of a large employer leaving the area, a natural disaster or just over building. There is an old saying buy in a bust and sell in a boom. In depreciating markets you can pick up several deals, while in appreciating the house prices are going to be much higher and harder to find great deals. The deal will still be out there you just have to know where to find them.

Learning your market is another key to becoming successful. Real estate Brokers and experts in your area can be the best source of information for you. Learn to use them to find out what kind of market you are in. If you are in Billings Montana we are in a pretty stable market. Billings Montana has not seen the ups and downs that other markets have experienced. I will have to say that I have been noticing a little bit of a downward trend but not much. Once the first time home buyer credit is over with we might see a little more decline. Every market can vary by neighborhood, so make sure you know you market well. I have seen the same houses just one mile apart selling for totally different prices.

6. Find a Mentor

Having a mentor to help you can be your biggest learning experience. Mentors can help you with any questions you may have, walk you step by step through the investing process, give you moral support, you learn from their proven system, and also network you with others in the business. Every successful real estate investor that I know says they owe a lot of their success to the mentors they have and had in their lives. I have had one of the best mentors around, my father. He is teaching me something new every day and pushing me to become successful.

When trying to find a mentor I would suggest network with the investors at your local real estate investors club meeting. There is a real estate investing club in Billings Montana that meets once a month. You can find information about real estate investing clubs in your area by searching for REA or real estate investors club then your area in Google. When you go to the meetings ask around who the biggest investors are. Then ask if you could get together with them sometime and discuss real estate investing. Ask them if they would consider working with you to get their career going. Offer your services as a bird dog. Bird dogs are people who go out find deals or leads about deals and give them to other investors. A bird dog gets from $500 to $3000 dollars depending on the deal. Make sure that you have a bird dog contract signed with the investors saying that if you find them and deal and they buy it that you get paid a certain amount of money. Being a bird dog helps you to build credibility with the investor and they are more likely to mentor you if you have something to offer them. If you would like to contact me with a question go to my web site Big Sky Property Solutions LLC.

7. Your Real Estate Team

Building an effective team can make your life as a real estate investor a lot easier. You are only one person and cannot do everything or be an expert in every aspect of real estate investing. Going at a project alone can become one of the most frustrating experiences you will ever encounter. Many people have become frustrated and quite real estate investing because they try and juggle too many things. Make sure that when putting a team together you provide everyone with win-win opportunities. When someone knows that working with you is going to make them money they will put you as a higher priority on their list. But you have to prove it to them that you are the real deal.
People to have on your real estate investing team include

o Real Estate Agents ( find the top agent for volume of sales in your area and other agents who work with real estate investors)
o Real Estate appraisers (find an appraiser that has done a few hundred jobs or more and make sure they carry errors and omissions insurance)
o Real estate contractors (good rehab crews that can get the job done in a timely manner, have 3-5 crews and on every deal get 3 estimates done. Ask for referrals from them and make sure they are licensed)
o Real estate attorneys (every investor needs an attorney, they can help to protect your assets, make sure you find one that works with investors)
o A property management company (can manage your properties and will give you leads on property they are managing that might come up for sale)
o Title companies (take care of the legal process and make sure there are no liens against the property you are buying, choose one that does hundreds of closings a year)
o Home inspectors(charge about $400 but will give you a great inspection and could save you thousands in the long run)
o And your Mentor

All of these people can help you in various aspects of real estate investing. You might find that there are a couple others that are keys to your business but this is just a list of a few.

8. Just Do it

There is no better phrase out there then JUST DO IT! Once you have learned all you can networked with investors in Billings and learned real estate investing strategies there is nothing left to do but get your feet wet. There is no better learning tool out there then doing a deal. Once you have completed that first deal you will know what to expect and find out that it is not as hard as you thought it would be. You will have learned what you did right and what was frustrating. Take that experience and ask yourself what would have made it run smoother. Apply that to your next deal. Then the next deal will be easier and it keeps getting easier as you go. I will say that every deal is different from the last but that what makes this business fun. You have to be creative and always keep on learning and growing with your business.

The average person never uses what they learn. Don’t be average apply your knowledge. When going out and doing your first deal act like you have done 1000’s of deals. The fastest way to change a habit is to act like it is true.

Five keys for success
1. Specialized Knowledge
2. Tools of a professional
3. Have the mindset of a winner
4. Mentors
5. Money and the knowledge of leveraging it (you don’t have to have millions to invest in real estate, there are many strategies out there to use other people’s money, or no money at all)

This is going to conclude this article about getting started in real estate investing. I hope this gave you some ideas about how you can get started. I didn’t give you any strategies at this point but look for some in upcoming articles. These are simple steps you can use to get started. If you read this article thank you for listening.