Monthly Archives: October 2008

Beating the System: Getting Exclusive Deals and Networking to Success

Posted on October 17, 2008 | 1 Comment

When investing in real estate, whether you’re looking into residential investing or commercial investing, many times properties listed on the MLS (Multiple Listing Service) may not be ideal for you. Don’t get me wrong, you can find some great deals on there. But there’s going to be times you want something very exclusive. Maybe you’re looking into investing in luxury properties, which often don’t show up on the MLS due to privacy concerns. Or maybe you want to invest in commercial real estate which may not be listed because the owner doesn’t want customers to know he’s selling the business. This is why you need to have a top real estate agent on your team to get you those deals hot off the MLS – sometimes even before they appear.

One of the snags of properties that are listed on the MLS – especially recently listed properties – is overly-inflated listing prices. When a seller is listing their property, the property owner is going to call multiple real estate agents and interview them. The agents will then visit the property that the owner is looking to sell and give the seller a round-about market value price that the property may sell for. Most agents are honest and will give a true market value on the home. There’s always going to be those agents that will quote a higher than market value price just to get the listing. When the seller hears this inflated price they may list with this agent with images of dollar bills dancing in their mind’s eye.

If you’re selling your home, be aware that these agents quoting a higher than market value price for your home are hoping that your property can sell for that price out of sheer luck or they hope to eventually bring your listing price down eventually. This is why if you’re a seller, do not get distracted with dreams that your property will sell for much higher than market price. Obviously, not all real estate agents are built equal – some agents have better negotiation skills and some agents have better marketing skills. These skills will likely bring you a higher price. But if three agents have told you the value of your property is $200,000 and one agent comes by and says he can sell it for $400,000, think twice before listing with that agent.

In order to beat the real estate system as a buyer, you need to establish relationships that net you the most exclusive investing opportunities possible. You need to have a real estate agent on your team and keep this agent interested in continuing in doing business with you on a long-term basis. This gives you massive opportunities for incredible real estate investing deals.

Once you’ve established these relationships with real estate insiders, you’ll be getting a fair share of investment opportunities. A key point is that when you find yourself with a prime investment property on your lap, don’t just sit by, “run the numbers” a million times, and let time pass. If you see a great deal, close it. If it’s that great of a deal, you may not even want to negotiate or bargain with the owner, just lock the deal up with great terms (no contingencies) and offer list value or even slightly higher to make sure you get the deal. This is part of our Real Estate Startpoints – be quick to jump on prime investments when you find them.

As we discussed in the article The Realtor Search: How to Find and Keep a Real Estate Agent, you need to concentrate your investment focus on a particular area and get a real estate agent that knows this area well. This allows you to jump on investment openings quickly, before other investors jump in before you. For example, a For Rent sign comes up on a great property. Call the owner up and see if the homeowner may be interested in selling that property to you. This almost always assures you of being the only person bidding on that property and submitting an offer – this gives you a huge negotation advantage if you’re the only person submitting purchase offers. Maybe the homeowner is an elderly person tired of managing the property and wants to retire in peace – this is a perfect chance to get a great deal. The point is to become an expert in your target investment area, as soon as a For Rent or For Sale sign comes up, you should be first in line to find out the details.

In every career, networking and action are the keys to success – investing is not an exception. Networking is key because this is how you get those amazing “insider deals” that many people don’t know about but you get first crack at due to your connections. Action is essential because you need to act without hesitation if you find a great property – run the numbers and if it all looks good, then go for it. So many opportunities are lost due to inaction – in real estate investing and in life in general. Network yourself, take action, and take control of your financial future.

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How to Escape Your Mounting Credit Card Debt Financial Situation

Posted on October 13, 2008 | 4 Comments

Like we talked about in our previous post Consumer Debt Worst Offenders: Banks, Advertisers, and Advisors, there’s a lot of financial entities out there more than willing to help you part with your money. It’s big business and consumers are getting hit with the worst of it. So what can we do to not be a financial victim?

The best option is always prevention. The easiest way to live free of debt is to not get into debt in the first place. Even if you’re already up to your neck in debt, there are ways to climb out and ways to reduce the amount of debt you currently have – you just need to have the right strategy.

Always pay the full balance of your credit cards each month when you receive your credit card statement. Otherwise, don’t use your credit cards! If you think you’ll be unable to pay the balance off in full when you get the statement in the mail, then you don’t need that item or service you were thinking of buying. If you think you won’t be able to pay off the balance yet you still feel that pressure inside you wanting to buy that item ask yourself what’s more important, your financial future or more stuff in your life?

If you aren’t disciplined enough yet to be able to pay your full credit card balance each month and not spend more than you can a month on credit then there’s only one option for you. Grab a scissor, take all your credit cards, cut them into miniature pieces, and throw them in the garbage. Just keep that one emergency credit card mentioned in the previous article and throw out the rest.

If you’re deep in debt, you know you won’t pay off your balances each month, yet you don’t want to cut up your credit cards then the reality of the situation is that you’re heading straight down the path to financial disaster. You have to be able to stop this vicious cycle of credit card indebtedness.

The way to getting control of your credit card spending is to learn to associate your present negative financial situation to the virtual slavery of credit card debt. Take out your wallet or purse, pull out all your credit cards and lay them out in front of you. Realize that these credit cards are like keys locking you into a virtual cage of financial prison. Visualize all the negativity that these cards have brought into your life due to faulty spending habits. Remember the debt that these credit cards have caused; remember the huge monthly payments that seem to keep growing and growing. Grab the nearest scissor and cut these cards up. This is the first step toward financial freedom.

Once you’ve destroyed your credit cards, find yourself a no-fee credit card with great rates so you can start on your new financial strategy of Pay-It-In-Full. Now you can transfer as much of your old credit card debt into this new card and take advantage of the usually very low fees for the first year or so (sometimes you can even find no interest credit cards that offer this for the first twelve months). This can significantly drop your credit card monthly payments and allow you to start paying down the total balance as well as everything you used the card for in that month. This allows you to pay more of the principal and less of the interest. Just be aware that this is a true transfer and not a cash advance which usually carries high interest rates.

There are also many credit cards out there that offer great rates if you use that company’s services or products. For example, the Health Care One Mastercard allows users to save from 20% to 40% on health care and physician visits, the Amazon.com Rewards VISA Credit Card gives you points that can be redeemed for gifts (including flight tickets, airline miles, hotel stays and more), and uStudent Credit Cards offers credit card matching for students to get credit cards that meet their needs.

Cashback bonuses can also sometimes be a big incentive to use a particular credit card that you know you’ll be paying in full anyway when the statement comes. The Discover Business Card gives you 5% cashback bonus on office supplies, 2% cashback bonus on gas and up to 1% cashback bonus on all other purchases. Another credit card with an interesting premise is the Discover Motiva Card that pays you a full month’s interest for paying ontime and with no annual fee.

Whenever you’re applying for a credit card make sure to read the fine print and never sign up for a credit card when you don’t understand the terms. Call the company and find out directly from the company representatives.

Bottom-line in improving your credit card financial situation is self-discipline. Only order a new credit card when you’ve paid off your old ones via balance transfer. Once you’ve done this, cut up the cards and cancel the account in writing with a subsequent phone confirmation.

Keep yourself disciplined and you, not the credit card companies, will be in control of your finances.

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The Realtor Search: How to Find and Keep a Real Estate Agent

Posted on October 9, 2008 | 2 Comments

To make any sort of real estate transaction, whether you’re looking to invest in luxury real estate, buy your dream home, sell your commercial property, or rent an oceanfront condo you’re going to want to find yourself an excellent real estate agent. A top quality agent will save you massive amounts of time in your searches, save you money when you’re buying, find the optimal listing price, market your property for a quick sale, and bring passive income producing real estate investment property directly to you – saving you big headaches and netting you big profits.

Finding Your Realtor

Let’s say you’re investing in real estate and you know of a particular neighborhood you’ve targeted for investment purposes – this is your target area. One simple way of selecting a real estate agent to work with you is by just driving around the area and looking at the For Sale signs that are up. Find out which agent has the most listings in the area and choose that Realtor. Another way to find a Realtor is by asking a friend that’s used a particular real estate agent and that’s had a positive experience. Another way to find an agent is by using your favorite internet search engine. For example, if you’re looking at buying or selling a small business you may want to do a Google search for small business real estate agent.

Once you find a real estate agent you’re interested in working with, send an email to this Realtor with a declaration that you are looking to purchase investment real estate property in that particular neighborhood or area. Be specific. If you would like fixer-upper homes, mention that in your email. If you want to flip homes (by purchasing, renovating, and then reselling) then make sure to write that in your email. Once the agent receives your email, it’s now understood by the agent that not only are you interested in purchasing investment property, you are also interested in then selling these properties once fixed up. This means double the profit for the agent – the buying commission plus the listing commission.

If the agent has a land address (whether the office or a p.o. box) you may want to print out this email and send directly. Include a business card with the letter. My suggestion is that you purchase a magnet business card. This is a business card that has a magnetized back so the real estate agent can put this card on the refrigerator or any metal surface. This magnet should contain information as to the particular neighborhoods and homes you’re looking to purchase. You might put a tagline such as, “Interested in flipping fixer-upper homes in the Little Havana neighborhood”. Make sure to put all your contact information, including phone number, full name, email address, and postal address. If you do not send this magnet to the agent via postal snail mail, then at your first meeting with the agent make sure to give this to the agent in person.

To show your professionalism, make sure to attach a letter from your mortgage broker that states that you are already prequalified to purchase homes in the average price range of the area you’re interested in. Either put it in your envelope if using postal mail or scan it and include it as an attachment if emailing. You may also want to allow the mortgage broker to put some advertising about his brokerage in the paperwork. This will not be hard to do as mortgage brokers will love to do this for you – the reason being is that this means future business for them! At the same time you’re giving the impression to the real estate agent that you’re really serious about investing and that you can really close a deal, anytime, anyplace.

Whenever you buy or sell a property, be sure to let this target real estate agent know with an email. In the email make sure to let this agent know you’re still interested in finding investment properties in your target area. This will show the agent that you’re serious about what you do in the investment world and will move you up higher in the priority order.

Hook your target agent by listing with them. Let’s say you’re looking to sell a property, you find a real estate agent that’s an expert in a particular neighborhood you’re looking to expand your investments into, and you don’t have a reason to list with another agent. Give this listing to the target agent. There’s no better way to get the attention of a target agent than this! Even if you think the house would sell FSBO (For Sale By Owner) you list with this agent in order to establish a business relationship. After all, if this agent brings you bigtime investments in your future, isn’t it worth giving them the commission? It’s worth it in the long run.

Give the real estate agent a list of your preferred local outsourcing people. Let’s say you a great painter, carpenter, and handyman in the local area. Give a list of these people with full contact information to the agent. Tell the agent that you’ve used these people in the past and that you personally recommend them. Tell the agent to mention your name if the agent uses them. This is useful to the agent because properties listed by sellers often need work done and a quality repairman is often needed last minute. This is useful to you because the people you’re referring will become very loyal to you due to the referrals. Let’s say they got a phone call about a house needing a repair from a first-time caller. But then you call a few minutes later and you say you need work done also. You’re going to be getting preferential treatment because of all the great referrals you’re giving them. On top of this, they’re very likely to give you a preferred rate and will go out of their way to please you by doing an excellent job.

Now, you don’t want to do all of this with every single Realtor you come across. These steps I’ve given you are to be done with a select few of agents, perhaps a handful, that you would like to be a part of your investment team going forward. They’re committed to your success, and in the same way, you’re helping them succeed as well.

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Posted in Real Estate Investing

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