So what’s so great about real estate?

The number one reason to invest is to make a return on your capital and time. Real estate has, historically, had a higher rate of return than stocks, bonds, and other negotiable instruments. I demand a minimum of a 10% cap rate on any property I buy. There is nothing in the rest of the financial world that makes 10% — even risky junk bonds only pay about 8% right now. So the first reason is money.

When you buy real estate you take title to a hard asset that is tangible and you can go out and touch it. When you invest in every other thing, all you get is a sheet of paper acknowledging that you own some intangible interest. I have a briefcase of stock certificates of bankrupt companies that a relative invested in during the 1920s. You don’t have those same issues in real estate (unless you buy shares in a REIT).

People don’t talk much about it now, but inflation has not gone away. It runs in cycles. There will come a day in the future when prices rise significantly. And when that happens, you have a hedge against the impact by having rental real estate. As prices rise, so does your rent. In fact, your rents are the ultimate
buffer as they re-calibrate for both inflation and changes in currency valuations. In a bad economy, like the U.S. is in today, having this protection is essential.

For many reasons, real estate has been a favorite of bankers for over 100 years. In fact, there’s no more standard loan than a first-lien position on real estate. As a result, there is available financing for buying real estate in a manner that other investments can’t offer.

For example, have you ever tried to get a loan to buy a business? You’re lucky if you can find anyone who will even look at that type of loan, not to mention the fact that the interest rate will be nearly double that of real estate and the down payment probably double or triple.

O.K., I’m obviously not talking about single-family homes here. But income properties still sell quite easily at the right prices. Why? Because they are income properties – they offer the investor an income.

And because financing is available, you can actually get paid in cash without having to carry paper.

Most income properties – especially the ones I deal in – are a basic necessity. You have to have housing. Real estate (with the exception of self-storage and marinas) is seldom a luxury. As a result, even during a depression like the one we’re in now, the demand is there to stay full. This is a very important point,
because non-essentials, in a recession, don’t sell at all. Go ask somebody who sells boats.

Owning and operating real estate is much simpler than any other type of business. There’s no technology to learn, no giant number of teenage workers to hire and train and manage, and no giant number of statutes to learn and worry about. Restaurants have the #1 business failure rate – real estate is at the bottom of the list.

No threat of technology ruining the market

The internet and computer have rendered many solid businesses into the garbage dumpster. For every Gates and Zuckerman, there are thousands of business owners who were put into bankruptcy by the technology shift.

The great thing about real estate is that there is no new advancement coming down the road that could ruin your investment. You can’t solve the housing crisis with the internet. In fact, the internet, via Craigslist and other listing services, has actually made real estate more marketable and successful.

Real estate is a great investment model. It is superior to the others. That’s why I invest in it and urge others to do so. I’m the 32nd largest owner of mobile home parks in the U.S., and if I didn’t believe in this stuff, I wouldn’t own a single one.

If you don’t currently own real estate, you should explore the possibilities.

Since 2007 average condo prices have fallen 25%, but some in places it’s even more. Sacramento, California is down 59% and Deerfield Beach, Florida is down 80%.

Two things have contributed to these drastic price plunges. First the housing bust across the United States caused the average house price to drop 23%. Secondly the over development during the boom has left Sand State markets with lots of condos and no one to buy them.

These condos are not fixer-uppers. They are ready for someone to move in and would make a good retirement home or vacation property. The new owners would have some other expenses including property taxes and maintenance fees, but they could easily cover those with the savings from the house price. Plus, there’s always the possibility that the housing market will improve.

Although affordable housing can be found in most markets, you might want to check into Las Vegas. For $30,000 you could own a condo with two-bedrooms, two-bathrooms, and a covered patio. You might just have to drive your old car for another year or so.

For the full story, click here.

The expiration of the federal tax incentive for home buyers can be credited for April’s boost in sales. While that activity was nice to see, many markets still report housing prices falling as well as a steady increase in the number of bank owned properties. Watch very carefully what happens to sales in the next couple of months; we’re guessing a dramatic decrease in buying activity will occur.

And let’s not be fooled by stories of unemployment claims leveling off. That may be the case but all those who are unemployed still need to get jobs before they can consider buying a home. Reports claim that this will be an incredibly tough time for 2010 college graduates because so many companies are in a hiring freeze. And many unemployed are resorting to the typical teenage summer jobs, just so they can put food on the table.

We’ve still got a long way to go…

To read the full story, click here.

Today, investors have more options than ever when it comes to investment real estate property listings. In the past, investors may have had to rely on smudgy newspaper ads, but today there are online ads, multimedia ads, keyword ads, and ads that rely heavily on visuals. Choosing how to formulate your listings can be challenging as a result of all the choice, which is why this breakdown might help:

1) Multimedia listings. These listings make use of commercials, TV spots, video ads and video messaging, and virtual tours. The advantage of multimedia ads is that they really take the buyer or tenant into the property. Movement, color, music, and even voiceovers can all be used to create the next best thing to an open house. The advantages to this sort of listing is the vividness. Multimedia listings also attract younger and wealthier buyers and tenants, as well as tech-savvy house hunters. Multimedia listings are fun to put together and are visually exciting. It’s easy to entice and impress a buyer with a snazzy listing that includes video and sound.

That’s not to say that multimedia listings are without their disadvantages. They can be expensive to put together. HD listings shot by a professional can run into the thousands of dollars. Plus, multimedia listings are only available online or on some TV spots. Those who are looking in the local paper are out of luck. Worse, multimedia listings do not always allow you to use keywords, which can make your listings hard to find. Another serious challenge is that potential buyers may feel that they have seen it all when they see a multimedia presentation and this can discourage them from attending an open house. In turn, this can prevent you from getting an additional opportunity to make a personalized sales pitch.

2) Written investment real estate property listings. This is the classic way to advertise your properties: write up a description of the property and run the ad in a paper or through online listings. The nice thing about written listings is that they are easy and inexpensive. It can cost you a few dollars to run a written ad and if you have any writing skills it only takes a few hours to come up with an intriguing ad. You can also use keywords throughout your ad to draw more traffic to your ad online.

The major disadvantage of these ads is that words alone are sometimes not enough to capture all the advantages of a property. Writing does not come naturally to all investors, and some feel intimidated by writing listings. Worse, making claims on listings can open you up to legal trouble if any of your words can be construed as discriminatory or misleading.

3) Visual investment real estate property listings. Visual ads are usually heavy on pictures and short on text – they use many pictures of a property and maybe a short description or bullet list of salient amenities. Visual listings are inexpensive (when posted online) and can be used with SEO online, too.

To Massive Profits,
Brad Wozny

Instead, they must look for a great real estate agent, a great location, a great bargain, and features that appeal to prospect tenants.

Then they need to focus on net positive cash flow of multi-family units, rather than speculating on long-term appreciation and potential paydown of the equity in a property, and finally, they need to consider zoning regulations before they buy.

Look For Cash Flow… Not Just Equity

Savvy real estate investors who are interested in buying investment property for the long term know that it’s all about cash flow, not just equity. While new investors may focus on building equity in a new property, smart entrepreneurs are trying to create a positive cash flow that will keep money coming steadily into their bank accounts.   An excellent way to do this is by renting or leasing properties.

What Smart Real Estate Investors Look At First

When smart real estate investors start looking for properties, there are certainly a few things that they look for first:

1. A Great Realtor – Savvy real estate investors speak to realtors or real estate agents about local properties, and in order to get mortgage advice, management advice, and in order to get information about the rents that the local market will bear. Investors know that they need to research in order to understand exactly how much the need to charge and what they need to buy in order to get the best cash flow possible. They are willing to do the research and ask the questions, and they know that local realtors are excellent sources of information.
2. Location -There is nothing more important when buying investment property than location. You’ll want to buy property that will appreciate in value, and is located in an area that offers lots of amenities and potential. Buying a property in an area that is just being renewed and will likely appreciate quickly in the next few years is ideal. While your focus is on cash flow, and not equity, a home that appreciates in value means a home that is in a property that will bear increasingly higher rents. An investment property in an area where homes are rising in value means a property that will continue to mean more money for you.
3. Renter appeal -If you’re buying to rent, then you will want to find an investment property that is close to major amenities, public transport routes, schools, and employment opportunities. Every tenant wants to live in a location that is safe, comfortable, attractive, and convenient. Look for a property that offers all of this and make sure that the property you are buying is someplace where you would want to live yourself.
4. Zoning -Smart real estate investors look at zoning and the legal implications of renting before they make any purchasing decisions. The truth is, renting or leasing does carry some legal risks and liability. Some homes for sale are listed as having an in-law apartment, but these homes are often not zoned for legal income apartments. Other properties are zoned specifically for renting. You’ll want to check safety requirements, zoning, and liability issues before you start to buy.

Use the guidelines above when searching for investment properties.  While these are basic guidelines to know… they are very important to your success as a real estate investor.

To Massive Profits,
Brad Wozny

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Brad Wozny is a real estate investor who has used his Fortune 500 business experience to build solid systems into his real estate investing business to make his business run more smoothly, more profitable, and with less of his time.  Brad calls himself a “real estate syndicator” and you can learn about how he invests in his newsletter at 8 Figure Empire <<

Repair / Rehabbing Checklist For Real Estate Investors

The repair checklist you can download for free below is a simple checklist that helps you systematically go through the property element by element so you can be sure that you don’t forget to look at anything on the property.

As you know, even overlooking one small detail (like a water heater, the appliances, sinks and faucets, etc.) can really begin to add up and take your profitability away when purchasing a property to hold or rehab.

Download the Real Estate Investors Repair Checklist

Dowload Instructions:

1. Right click on the download link below

2. Click “Save As” or “Save Target As”

3. Save it to your computer

You must be a member to download.
If already a member you can login at the top of the blog.
If not yet a member you can go here to Join for free.

Go ahead and download the marketing piece above and return the favor… tell us what’s been working for you in your market! Just post a comment below or shoot us a message through our contact page anytime letting us know about your successful marketing piece.

Remember to subscribe to our RSS feeds and our newsletter to make sure you don’t miss out on any new updates for real estate investing marketing pieces, checklists, tools, resources… and other great stuff that will help you get an edge in today’s real estate market.  No… serious… click on through and subscribe … it’s FREE!

If you want to start investing in local real estate investment properties, take some advice from the experts and:

1. Study twice, act once -

   In carpentry, there is a saying: “measure twice, cut once.” That simple saying simply means that when you double-check your numbers and think about what you are going to do, you to do less work and you spend less time correcting avoidable mistakes. This same rule of thumb holds true for real estate, too.

   No matter where you are investing, you want to do your research first so that you don’t end up making a costly mistake. When considering buying local properties, look into the area and market.

   Is the population in your target area growing faster than the national or state average? Is the area being renewed or staying much the same? Are baby boomers flocking to the area?  All of these factors are important ones to monitor when looking into areas to invest in real estate.

2. Invest, rather than speculate -

   Many new real estate investors don’t realize that there’s a difference, but there is in fact quite a big difference.  Investors who speculate buy local real estate investment properties because “if these pieces of real estate increase in value I’ll make a fortune.”

   If your business plan relies heavily on the word “if”, you’re speculating rather than investing.

   Investing means that you will make money regardless of the markets or the economic status of the country. Investors make money in all types of conditions, while speculators end up losing money when the economy gets a little shaky. Aim to invest.

3. Be wary of cheap properties -

   Some new investors will snap up property that is simply the least expensive in the neighborhood. The problem is that most inexpensive properties are inexpensive for good reason.

   They may be in a bad neighborhood, they may be so poorly maintained that they require tens of thousands of dollars in renovations, or they may have liabilities of problems you’re not yet aware of.  Before you buy into cheap real estate… find out why it’s cheap and realize that “cheap” isn’t always good.

4. If you’re in Phase 2 of your investment business, it’s time to buy local real estate investment properties for the long term -

   Yes, house flipping (or even flipping real estate contracts for quick cash profits) is all the rage in the first phase of your investment business, but after you’ve progressed into the high 6 figure profit margin, it’s time to realign your real estate investment business plan, and “go long”.   However, keep in mind that as of now, your overall plan is to invest for the long term.

   Not only will this mean that you won’t panic every time the local real estate market takes a sudden upturn or downturn, but when you plan for the long-term future, you will simply make more money.

Is finding money for your deals the biggest problem area for you as an investor?

It was for me when I got started.

I focused so much time getting my first deal under contract that I didn’t stop to think what I would do when I got it. After struggling to finance real estate deal after deal, I decided to learn how to recruit private money. I wanted to know that I not only had a private lender waiting for my next deal, but that I had an affordable way to finance it.

After spending years developing my list of investors and raising millions of dollars in cash, I have discovered that there are 3 “Vital” Keys to having all the money you’ll ever need for your real estate investing deals.

“Must Know” Key # 1: Plant Seeds!

That’s the most important thing that you can start doing right now! Every person that knows that you are an investor and that knows about your investment program, whether or not they are in a position to invest, is one more seed planted in the soil.

Here are a few examples of planting seeds:

• Just flat out tell someone
• Send out some form of direct mail letting people know about your program
• Put an ad on Craigslist
• Put an ad in the newspaper
• Put a link on your website describing your program

Any form of getting the word out about your investment program is “planting a seed”.

Over the first couple years of recruiting money, on average, it took around 4 months to get someone to invest with us after first mentioning our program and planting the seed.

Soooo be patient! (this is the reason most of you don’t have enough private financing… you don’t stick with it long enough… remember, these people are putting their hard earned money in your trust and need to get to know you before they just write you a huge check)

There are two types of people most likely to give you money:

1. People that know and trust you
2. People that know a good deal when they see one

Keep this in mind when making your list of people to contact for funding for your real estate deals.

Once you gain some momentum and have investor clients that have experience in your program, go for the third type of people most likely to invest with you. And they are the best there is….

Referrals.

After a couple years of working with private money lenders, I didn’t have to go out and seek additional clients.  They just came to me.

“Must Know” Key # 2 : Ask Good Questions!

Your job, when meeting with a potential investor, is to “sell” the idea of investing in your program.

In order to sell that idea, you must ask good questions! Asking good questions consist of two types of questions:

1. Questions about the past
2. Questions about the future

Questions about the past will tell you what kinds of investments someone has taken part in, what rate of return they are accustomed to getting, how previous investments have been structured and the results of their investing experience. This can tell you so much about how to set up an investment that works for them and that goes with their investment strategy.

Questions about the future will be more centered on their future goals. These questions will elicit whether they are looking for long or short term investment opportunities, if income is important to them and so on.

By asking good questions, you can give them what they want.   And if you are able to give them what they want, they will invest with you!  Bottom line.

“Must Know” Key # 3 : Structure the deal so that it works for you!

Just because you can get a deal financed doesn’t mean you should go through with it.

It has to make sense for you the investor.  This is where the “creative” in creative real estate investing gets its name.  There are limitless ways to structure an investment loan.

When structuring a real estate investment loan, it all starts by asking, “What’s my Exit Strategy?”

Your exit strategy will ultimately determine the ideal structure for your private money loan.

There are two basic pay structures to an investment loan:

1. Rate
2. Profit Splitting

Whether you choose to pay a nominal rate or split profits with your investor, the easiest money on you would be…

“No payments, loan is repaid when the property sells.”

Setting up an investor loan like that will put you in the driver seat. If you plan to hold the property for some time, it may make more sense to make regular interest payments to your investor.

Those are 3 vital keys to getting millions in Private Money for your real estate investing deals.  Of course, this isn’t meant to be a comprehensive tutorial…. it’s an excellent primer to get yourself off on the right foot.

Who Else Wants Cheap Private Money For Your Real Estate Deals?

That’s a silly question huh? What real estate investor doesn’t want more private money for their deals?

Well… we’re (Patrick and The REI Brain) putting on a 100% content ONLY webinar where Patrick will lay out his entire process for finding, getting, and securing enough private money for your real estate deals that you’ll never have to worry about financing for your deals again.

How’s that sound?

NOTE: Patrick has been a full-time investor for 6 years and just started to chronicle his real estate knowledge over at his blog at www.mustknowinvesting.com .  Check it out and tell him hi for us!

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To learn more about the upcoming Getting Private Money Free Webinar (just so you know… it’s FREE and absolutely no product pitches) by joining our newsletter in the form in the upper right of this page.  This is the new revolution in real estate education.  Real life investors teaching the stuff they do day in and day out… no guru’s here.

Bottom line… if you are a bad marketer… it’ll be 10x more difficult to make it in real estate investing.  Period.  It’s no different from any other business (you HAVE TO look at REI just like any other business)… you need to let people know that you’re out there… let them know EXACTLY what you do and how THEY WILL BENEFIT from working with you… and how they can get a hold of you.  Pretty simple huh?

Anyhow, we’re gathering great marketing pieces for you to use as templates and guides for your own real estate marketing campaigns.  And… here’s the first one of the group!

Letter For Vacant Properties

One great way to find properties is to look for vacant properties.  Properties can be vacant for many different reasons including:

• Death of the owner
• Owner moved out of state
• Property was foreclosed on and the bank can’t sell it
• A tenant trashed the property and the landlord hasn’t repaired it yet
• Owner bought a new home and can’t sell the old one (the vacant one)

… or a ton of other reasons.

In any case, the property is vacant and it is obviously doing nothing but draining the owner of money and mindspace.

So, savvy real estate investors can come in and purchase the property usually at a nice discount and make it a win win for everyone.

Once you find these vacant properties (driving your target neighborhoods is a great way to find them) and have located the owner on record (head to the courthouse to find this)… a great way to market to the owner is to send them a nice letter (like the one below) that spells out how you can help them solve their situation.

Below you can download a sample direct mailing letter that you can use in your campaign or as a sample for ideas to market to owners of vacant properties.   This mailing piece has been used successfully by an investor in Georgia to purchase properties from owners of vacant properties.

Download The Marketing Example Letter For Vacant Properties

Dowload Instructions:

1. Right click on the download link below

2. Click “Save As” or “Save Target As”

3. Save it to your computer

You must be a member to download.
If already a member you can login at the top of the blog.
If not yet a member you can go here to Join for free.

Go ahead and download the marketing piece above and return the favor… tell us what’s been working for you in your market! Just post a comment below or shoot us a message through our contact page anytime letting us know about your successful marketing piece.

Remember to subscribe to our RSS feeds and our newsletter to make sure you don’t miss out on any new updates for real estate investing marketing pieces, tools, resources… and other great stuff that will help you get an edge in today’s real estate market.  No… serious… click on through and subscribe … it’s FREE!

Anyhow, last week I started sending out these Mold Guides to all of my tenants to help prevent mold in my apartment buildings.  A bit of preventive maintenance and education goes a long way to combat future more costly problems from happening.

If you own rental properties in humid climates like:

• Portland, Oregon
• Florida
• South Texas
• The South East
• Seattle (and the rest of Washington)
• etc.

… you should really provide your tenants with a Mold Prevention and Clean Up guide .

I found this really great guide a few months back and think it’s a really great starter guide for Mold prevention and maintenance in apartment buildings.

To download the guide free to reference or use in your property management activities… follow the instructions below.  Just FYI, the guide is in PDF format… so you may want to simply download it and use it as a reference to build your own guide… or you can use this PDF to actually print off and send to your tenants.

Dowload Instructions:

1. Right click on the download link below

2. Click “Save As” or “Save Target As”

3. Save it to your computer

You must be a member to download.
If already a member you can login at the top of the blog.
If not yet a member you can go here to Join for free.

If you have real estate or business related documents for forms that you’d like to share with everyone… feel free to email them to me through the contact info on our contact page.