Category: Residential real estate

How I Learned to Build My Business Dream Team

Rescue Impossible, Nightmare Hell!

Some of my favorite television shows are Kitchen Nightmares, Hell’s Kitchen, Bar Rescue and Hotel Impossible. These shows are so popular because people like you and I enjoy all the drama associated with these businesses on the verge of failure and how the experts like Chef Gordon Ramsay come in and save the day.

 Although these shows are very entertaining, they also teach me some important lessons on business: You have to work on your business instead of in your business. Otherwise you have a job rather than a business.

Most of the business owners on these shows suffer from the typical bad business disease that other business owners have, they try to do everything themselves. On one recent episode of Kitchen Nightmares, the restaurant owner was the manager, the chef, the accountant, the cleaning person, and the host. No wonder, his business was failing; he was trying to do everything and was good at nothing.   

The business owner had not learned to delegate! I had the same problem when I started my business, but quickly learned from my mistakes. Now I have the time and money to enjoy the fruits of my business. For example, I can enjoy eating lunch at Chef Gordon Ramsay’s restaurant in Las Vegas! My business continues to operate when I am not there because of “The Business Dream Team™” I have put in place. 

Learning how to build a dynamic business dream team is the difference between having your business run on automatic pilot and one where you have to be there in order for it to run.  When we learned the secrets of how to build “The Business Dream Team™”, our business took off like a rocket.  We can now spend more time on marketing and building our business while enjoying the fruits of our business.

In an effort to help our clients achieve greater levels of success, we decided to create a program to show other business owners how to build a dynamic business dream team. The program is called, “The Ultimate Guide to Building Your Business Dream Team™.”

This program is designed to help you select, hire and manage your business dream team to help you grow your business. It includes a step by step guide, a checklist, and other modules to help you reach new levels of success.

So, don’t work in your business, get the help you need to create the life of your dreams to make your business a success. Visit us at www.mybizdreamteam.com to learn more.

 

 

How Do You Know When a Property Will Be a Good Investment For You?

As a real estate investor I am often asked how to determine if a property would be a good investment.  How many times have you seen a property just sitting there and you are wondering if the property would be a good investment for you? But you were afraid to act because you just weren’t sure how much you should offer and how much profit you should factor into the deal before making an offer.

Here are four rules of thumb:

·         First, you need to know your numbers. Do you know the After Repair Value (ARV), the Repair Cost Estimate (RCE) and Asking Price (AP)? With the knowledge of these three numbers, you should be able to tell whether it’s a good deal or not.

 ·         Second, you need a real estate coach or mentor to discuss your investment options.  Find someone you trust and who has experience in investing in the type of real estate that you are pursuing. Some people say that coaching is expensive. But I say that without a good coach, it could be really expensive if you make a mistake.

·         Third, you need to determine how much to offer for the property. If you are looking at a fixer upper then you don’t want to have any more than 70% of After Repair Value (ARV) invested. Keeping a margin of 30% insures that when you are finished making the necessary repairs and after closing cost you will still have 30% equity. Then you can sell it, or refinance it and pull out some cash, or you can enter a lease option deal.

·         Fourth, if you are looking at what I call an “instant landlord” property then you can pay a little more than 70% of value because you do not have any repair costs. My rule is not to pay any more than 80-85% of value. Perhaps you can offer up to 85% of value, if the cash flow is good and there is good possibility of appreciation.

Conclusion

In The Savvy Investor Program™ we teach you how to create your own economy. We help you get off the treadmill. Remember that with real estate investing as one part of your financial plan, you can create the life of your dreams by following a few time-proven strategies and techniques. Today, buy your copy of The Book on Investing.

Share this post and link with your friends so that they can buy a copy of the book also. Let us know about other topics that you would like for us to discuss.

 

 

Do You Have the Right Financial Personality Type To Be A Successful Real Estate Investor?

Have you ever thought about your financial personality type? I hadn’t either until I read a recent article.  In the article, author Casey Bond, uses the well known Myers- Briggs personality traits test and applies it to finance and investing.  Her thesis is that your financial personality trait can be a determining factor for your success in money management skills and in investing. Below is the chart of financial personality types. What type are you?

Debtor (D) / Saver (S)

Debtor: If you fit this category, you tend to borrow money to make major purchases rather than saving up the necessary cash. This personality type tends to always owe money either on credit cards, student loans, or mortgages.  On the other hand, if you are a debtor, you tend to also use your debt strategically; borrowing money to take advantage of high-yield opportunities that will pay off later.

Saver: Savers usually do not like to owe anyone money and would prefer to own things outright, even if that means living according to a strict budget.  If you are this type, you tend to cut expenses to ensure that you have a positive cash flow, and go without when you run low on money. Savers ensure they have money for now and for the future, investing with the goal of remaining financially comfortable at all times.

Aggressive (A) / Conservative (C)

Aggressive: This personality type uses an aggressive investment approach to look for earned income.  If you are this type, you tend to favor high risk, high-yield funds. You are also very open to new or uncommon investment opportunities, such as futures, commodities, currency trading, and real estate investing.

Conservative: This personality type includes individuals who are very risk-averse and generally manage their finances so that they can never lose money.  If you are a conservative investor, you tend to place a large proportion of your income into savings accounts, a mortgage, and low-risk private investments or company pensions.

Planning (P) / Impulsive (I)

Planning:  The planning personality type tends to seek out opportunities to save money and to take strategic steps to do so within their household budget.  Many planners are great at looking at the future and seeing what needs to be done today to reach their financial goals.  If you are a planner, you also tend to be very good at identifying and prioritizing your various short-term and long-term financial goals.

Impulsive: Impulsive types often engage in deep thinking about their financial lifestyles. If you are impulsive, you tend to have a great strength that others don’t in terms of being able to make quick decisions about spending. For example, you might buy a house before anyone else makes a bid or snap up an investment before the price goes up.  Impulsive types also tend to advocate using money for pleasure, like taking vacations and enjoying the fruits of your labor.

Giving (G) / Hoarder (H)

Giving: The giving financial personality type is driven by a desire to take care of the people or causes they love.  If you are this personality type, then your primary quest is to find ways that you can serve others.  Regardless of the amount that you have saved, your level of income, or the opportunities presented to you, you tend to find that there is always more that you can give to those you care about most.

Hoarder: In comparison, a hoarder personality tends not to like to part with money.  If you are this personality type, money is a resource to be protected, treasured and analyzed on a regular basis. If you are a hoarder you are driven by fear of financial loss, thus you avoid situations that require parting with your money.  Spending and lending money to your friends and family are behaviors in which hoarders rarely engage.

In Conclusion

In case you were wondering, I took the test and it turns out that I am APIG.  APIG means: Aggressive, Planning, Impulsive, Giving.  I am aggressive when it comes to investing with an ever watchful eye on return on investment. I always plan my strategy for investing and try to always think about the future. I am sometimes impulsive in my decision making as I believe in the speed of implementation. I am also giving. I believe in helping others to achieve their goals. I am always giving back to others of my time, knowledge, and resources to make a better world.

Tell me your financial personality type. Do you agree or disagree with the assessment? If you want to continue this discussion, then comment on this post.   

 To learn how we can help you achieve success by investing in real estate and in businesses, please follow us at The Book On Investing . Also, if you are interested in investing in real estate, join us at RADAR Investments.

The Power of Leverage in Real Estate Investing: So Easy, A Cave Man Can Do It!

Leverage is a very simple principle in the physical world. You use one or more objects to multiply the force it takes to move a bigger object. For example, in the illustration above, with the right tools the smaller rock on one end can move the larger rocks on the other end. Using the principle of leverage, the cave man figured out how to move big boulders to provide shelter for his family. This was the start of civilization.

The Power of Financial Leverage in Real Estate Investing

Leverage in the financial world is very similar to leverage in the physical world. Instead of using a smaller rock to move a larger rock, you use a small amount of cash, in combination with debt, to make a much larger investment. Leverage has the effect of multiplying the return on investment. With a small initial equity (cash) investment, you gain control over a larger investment and you reap the returns on the larger investment.

Let’s look at a few examples. In the first example you purchase a $100,000 investment with $20,000 of equity and debt of $80,000. In the second example you purchase a $100,000 investment with $10,000 of equity and debt of $90,000. In these two examples, both have a 10% gain.

As you can see from the table, a gain of 10% generates a 50% return on equity with a 20% investment compared to a 100% return on equity from a 10% equity investment.

Using leverage can mean huge rewards for a real estate investor. Imagine you had $100,000 in an IRA, 401K account, or a savings account that was available for investment. You could use this capital as a 20% down payment on a $500,000 investment property. Assume the property appreciates at a moderate rate of 8% per year for three years. At the end of the three years the equity in the property has increased over $120,000, a return on equity of 120%. When was the last time your stock fund, savings account, or IRA performed like that?

Now, just imagine you could take the $220,000 above (initial $100,000 + $120,000) in equity and gained control of a $1,000,000 investment property. If the $1,000,000 investment property appreciates at the same 8% rate, the equity will grow by $80,000 per year. That’s power of leverage!

Conclusion
In The Savvy Investor Program™, we teach you how to create your own economy. We help you get off the treadmill. Remember that with real estate investing as one part of your financial plan, you can create the life of your dreams by following a few time-proven strategies and techniques. Today, buy your copy of The Book on Investing.

Share this post and link with your friends so that they can buy a copy of the book also. Let us know about other topics that you would like for us to discuss.

Book Launch in London

IMG_0359bigbenlondon2012
London: Big Ben at night

We just returned from London where we launched “The Book on Investing” www.thebookoninvesting.com in the U.K. at The Ultimate Author Bootcamp www.theultimateauthorbootcamp.com.

You should have been there! You could have met the many interesting and exciting people in London like we did. Perhaps you would have enjoyed the wonderful sights and sounds of Christmas as you visited the Winter Festival in Hyde Park or shopped on Regent Street or Sloane Square!!!

Have you ever dreamed of visiting London? Perhaps you dream of owning a bigger house or creating wealth for you and your family. I challenge you to dream big and to launch the life that you want live!

Making Your Dreams Come True
Dreams won’t necessarily come true on their own, although you’d be surprised how often clarifying what you want and focusing your thinking on something is enough to make it happen. There will be lots of new things to learn and tasks to be accomplished, so it is important to establish specific goals, with deadlines, and then take the necessary actions to meet or exceed your own expectations.
Perhaps you are one of those people who absolutely hate deadlines. Do they fill you with dread and create a level of anxiety that keeps you from doing anything at all? Not to worry, when set properly a deadline is your friend in that it motivates you to move forward and provide a wonderful, satisfying measure of success.

Our early experience summarizes what we’re talking about perfectly — we had a dream, a plan, and a set of goals. Critically, we continued to take the actions needed. Now, we are fulfilling an entirely new set of big and wonderful dreams.

This process is definitely not as monumental as it sounds. By laying out a plan for yourself and continually setting attainable goals, you can have outstanding success also.

If you are interested in finding out more about a successful goal attaining system that can help you achieve your goals go to our website www.thebookoninvesting.com to get a copy of the book.

The Book On Investing — Federal Government Housing Policy: Homeowner Affordability and Stability Plan

A critical part of the Obama Administration’s broad strategy to help the millions of homeowners still struggling to pay their mortgages avoid foreclosure,  stabilize the housing market, and improve the nation’s overall economy is the Homeowner Affordability and Stability Plan

One part of that plan is the Making Home Affordable program.  This is an official program of the Departments of Treasury & Housing and Urban Development.  The Making Home Affordable program offers a number of mortgage reduction relief programs for individual homeowners.  

If you’re not unemployed, but you’re still struggling to make your mortgage payments, you may be eligible for the Home Affordable Modification Program (HAMP).

If you’re not behind on your mortgage payments but have been unable to get traditional refinancing, you may be eligible to refinance through MHA’s Home Affordable Refinance Program (HARP)

More information on the Making Home Affordable program can be found at www.makinghomeaffordable.gov    

Each month HUD and the Department of Treasury release the Housing Scorecard-a comprehensive report on the nation’s housing market.  Data in December 2011, released January 9, 2012 show some subtle improvement in the housing market as compared to the same period in 2010.  However the data underscore the fragility of the overall housing market as the outlook for stabilizing the market remains mixed.  Home prices showed a slight dip from the November 2011 and remain below levels from a year ago. 

The Housing Scorecard can be found at www.hud.gov/scorecard.

WHAT DOES THIS MEAN FOR THE SAVVY INVESTOR?  You should stay abreast of the latest government policies and market trends.  It will make you more knowledgable in your dealings with real estate buyers and sellers.

Home Ownership Costs Are Rising Despite Record Low Mortgage Interest Rates!

Did you know that earlier  this week 30- year mortgage rates hit a new historic low, averaging at  3.89 percent for fixed rates loans, according to weekly survey data released Thursday by Freddie Mac. Other news from Washington, will make it more expensive for new homeowners despite the low-interest rates.  During the end of the year fight between Congress and the President over the extension of the payroll tax cut, several mortgage financing benefits disappeared.  One of them, the ability of many home buyers and homeowners to write off the premiums they pay for mortgage insurance, could ratchet up the costs of homeownership this year.   This change in the law took place on January 1, along with the expiration of 58 other tax code benefits that Congress failed to renew, such as credits for home energy improvements, credits for energy-efficient houses and deductions for state and local sales tax payments.    The elimination of this tax deduction will hit many low-down payment conventional loans  originated since 2007, plus almost all new loans where the down payment is less than 20 percent.

For families with low to moderate income the ability to find an affordable place to rent is also becoming tougher.  As you probably know for the past three decades family income have grown at a much slower pace than the cost of owning or renting housing.  This situation means that  families with low and moderate incomes must spend an ever-growing portion of their family income on rent.  As the cost of construction of affordable housing has gone up, the incomes of low and moderate income families has stayed flat.  The third factor contributing to the shortage in supply of affordable housing:  the greatly reduced availability and size of public subsidies to cover the gap between what housing costs and what people can pay.   Because of changes since 1980 in our  public policy regarding subsidizing low and moderate housing, we can only expect the current situation in the United States to stay the same or to get worse in the foreseeable future.

What does this mean for the real estate investor? You must continue to evaluate each deal and determine which ones fit into your overall strategy and risk profile.  Knowing about the overall financial and housing markets  and changing government housing policies helps make you a SAVVY INVESTOR. To find out more about becoming a SAVVY INVESTOR go to www.thebookoninvesting.com.