Real Estate Investing For Beginners – What Every New Investor Wishes He’d Been Told Before

As a new real estate investor, when you begin researching information on real estate investing for beginners, you’ll find that there are a lot of gurus and mentors out there looking to sell you high priced information. You’ll also find plenty of chatter-boxes at local real estate investing forums and other watering holes that will share (brag?) all day long about their investing trials and tribulations, especially if they have tenants or rehabs. (Those types of projects tend to be fraught with problems, something that can scare beginner real estate investors off – when maybe it should be attracting them!) You can also find some excellent offline resources at the library, bookstore and your local investor club. Maybe you’ll even find someone who’s out in the trenches on a regular basis and is willing to take you out on the streets to show you some of his properties.

What you won’t find as often, especially for free, is a coherent, executable business plan detailing what it takes to get going with real estate investing as a beginner.

What you really need is a handbook entitled: Real Estate Investing For Beginners that lays everything out for you A to Z, with what to do at every step along the way.

Unfortunately, putting together a super and useful reference like that is time consuming and you have to consider that a) If someone is already making money investing in real estate, her time is valuable, and b) if she’s going to invest her valuable time in putting together a real estate investing guide for beginners, she’s got to have an angle.

That’s an excellent thing to keep in mind – everyone in the real estate investing education industry seems to have an angle. They are directly incentivized to make you feel that real estate investing is easy, you can do it, and if you just part with some money, they will give you the handbook with all the answers.

BEWARE: If you can’t figure out how they’re getting paid, you’re missing something… Everyone wants to get paid in this business.

Well, I hate to tell you… I don’t have that comprehensive handbook for you either.

That’s the bad news.

The good news is that I can give you some very important words of wisdom that helped me when I was getting started in real estate investing as a beginner. (And I started right out of college without a good job or anything, so don’t think it can’t be done.)

Real Estate Investing Observations – What Every Real Estate Investing Beginner Needs To Know:

1) You will have to trade time or money to get what you want in real estate. You can’t get something for nothing, so even if you buy an expensive course to get someone else’s experience and shave years off your learning curve, you’ll still HAVE a learning curve. Plus, you’ll need to find leads, and that type of marketing takes (you guessed it) time and/or money.

2) Leverage cuts both ways. When the market is going up, leverage can be a great ally in helping you acquire more property with less of your own money. However, when the market is soft or declining, as also happens with real estate market cycles, having a lot of leverage can put you “upside down” on your equity and cash flow – a very risky situation. Protect yourself by “making your money when you buy” and passing up those “skinny” deals.

3) It’s all about NEGOTIATING with the motivated sellers. A lot of courses make you believe that if you find the motivated sellers, you can just pluck up the deals like daisies in the orchard. That’s almost true. Whether you’re working in commercial or residential real estate, you’ll get much better deals when you negotiate with a motivated seller. However, the key is that you must NEGOTIATE. You have to make offers that will work for you and engage the sellers in conversation. Very rarely will the buildings be lying these listed for 50 cents on the dollar (if they are, they’ll be snapped up by other investors). You have to find sellers that you think may be motivated and offer them your low cash offer or terms offer in order to see if they’re willing to work with you. Engage them in the conversation by making lots of offers, and NEGOTIATING with the ones that are motivated.

4) Figure out your rate of return. Sometimes, when you don’t have a deal, it’s easy to think “any” deal would be good. However, sometimes the best deals are the ones you PASS on – you “make” your money by saving yourself from some expensive mistakes. Don’t waste time on property that doesn’t make sense when you run the numbers. Don’t get emotionally attached just because someone says they’re motivated or willing to work out terms with you. Run the numbers. Always focus on the numbers.

5) You get paid for solving problems. This is a business with a lot of problems. Sellers can get very emotional, or have a lot of financial trouble, at the time that you’ll be working with them. That’s stressful for anyone, especially when the transfer of a large asset like a house, apartment building or office/retail center is involved. Realize that you may go through some challenging emotions of your own. That’s natural. If you can hold it together and survive the up-and-down roller coaster, you should do okay.

No one says real estate is easy unless they have a course to sell you. It can offer some great returns, but there’s a reason not everyone goes after them. Not every property is a winner and finding and acquiring the winners can be a challenge. However, if you are committed to making your real estate investments work for you, then focus on getting yourself educated and staying in for the long run.

If you’d like more information on what it takes to be successful in real estate – From two real people who have done it with single family homes and commercial real estate – then please join in the conversation at TheRealWealthBlog [http://www.TheRealWealthBlog.com]. This is a great guide on Real Estate Investing [http://www.TheRealWealthBlog.com] For Beginners

Now, just to be “authentic” with you, I think it’s fair to share our angle, since I stated that everyone has one. Currently we are offering our services “by the hour” as real estate coaches and consultants if you have any questions on deals you’re working on or if you’d like to get going.

We both have logged hundreds of hours helping students get started with real estate investing across the country, and we’d be happy to help you, too. Without the monthly residual fees or high cost-of-entry coaching programs. If you need help with your investing strategy, let’s see if we’re the ones you need.

The Myth of Real Estate Investing and 7 Ways to Make the Most Money From Your Property Investment

Investing in Real Estate has become urban legend the myths abound about how much you can increase your wealth by investing in real estate and in particular residential real estate, so much so that the average Joe believes that making money and creating wealth when it comes to real estate is a given and in alienable right so to speak.

Average mums and dads are jumping onto the real estate bandwagon with no knowledge or training in the fundamentals of investing. These folks are fed the myth that using their equity from their family home will miraculously make them into real estate tycoons, all to often these poor misguided souls end up losing the home and everything else in their pursuit of real estate’s Eldorado.

To perpetuate the myth these naive investors are advised to hold on to their real estate investments for ten years or longer, this is great in theory if you are in your twenties and do not need the profits in the immediate sh rt term to help fund a decent retirement, unfortunately when you look at the demographics of these investors they are in their fifties with plenty of equity in their family homes most usually own their family home and have neglected doing any thing for their retirement till now and in horror discover that they will not be able to have their current lifestyle on the pension.

Little wonder real estate investment seminars are packed with these late bloomers all hoping to make a fortune by investing in residential real estate, the seminar presenters ensure that is all these folks here, after all this is a valuable gravy train.

Try this little trick next time a telemarketer calls and asks you to attend a real estate investment seminar, and the telemarketer asks you if you own your own home and how much equity you have in it, reply by saying that you have none, I will guarantee that before the word none leaves your mouth they have hung up on you, interesting isn’t it?

Tragically no one is told when a real estate investment has gone bad or failed to perform as happens on a daily basis with the stock market, why is this so? One of the major reasons are the volumes of money that Governments, Banks and marketers make from selling the residential investment myth, that is also the reason why Governments have been loathe to legislate that investors under go an investment training program before they can invest, as once the myth is busted the gravy train will not be as plentiful and the flow on effect into allied industries would be catastrophic.

This myth is well and truly busted as you can loose everything from a failed real estate investment and there are no such things as guaranteed growth with out doing some work for it.

Here are 7 simple ways to maximize your money from real estate investment

1. Know your profit before you buy

Do your due diligence and find out if the price you are paying is below market value, a simple rule is can you resell this property today for a profit and if so how much.

2. Type of Neighborhood?

The community surrounding the property can change in a variety of ways that can adversely affect your real estate income property. Increasing vacancy, for instance, can lead to reduced rents, which in turn means reduced maintenance causing building deterioration, This can cause a roll on effect if more properties start to decline in the whole neighborhood,compounding the problem.

The nearby construction of facilities such as prisons, sewer treatment plants, and airports will also likely have an adverse effect on the area. Also, perhaps more subtle and slower in coming, is a decline due to increased crime, perhaps resulting from an adjoining neighborhood spill over. If you still want to invest here find out what it is that makes it special that everyone else has over seen, often gems are discovered with a little digging,

3. Impact of poor or neglected Infrastructure

The impact of being directly under the flight path of airplanes, construction of a major highway or intersection can limit access to the property, cause noise and dirt by the construction and all this can have a negative impact on the property’s ability to attract and keep tenants. The end result may be an increase in your investment real estate value, but construction and major works can take up to a year or more and during that time you could expect your real estate investment value to drop. Or worse still the infrastructure is neglected and the local authority does not have the Tax base to start remedial works to bring it up to standard,

4.Controls

Governmental controls and regulatory changes to zoning can adversely impact real estate investment properties. Real Estate investors that purchase raw land for development, for instance, can see their plans grind to a halt because of a building moratorium or anti-development sentiment. All of which results in downturn in value.

5. Finance

Difficulty obtaining finance or the lenders require more of your capital to top up your borrowings,yers for your rental property if you decide to sell, This type of condition is prevalent at the moment as lenders are devaluing the amount that they are willing to lend against real estate, in most instances I have seen lenders valuations or real estate down by up to 30% to 40% of the contract price depending on the region this could be higher again, this trend should alert the investor that the deal they think is great may not be so great after all, unfortunately marketers have this covered as they are dealing with naive and unsophisticated investors by saying that the lenders always value the property for less, if that is what some one lending you money says about your intended investment wouldn’t it be prudent to listen and renegotiate or if that is not possible walk away from the deal.

6. Lack of or no maintenance.

If your property is the run down, get it brought back up to a good condition. This will make it more appealing to prospective tenants

7. Pressure to sell

Highly motivated sellers may reduce a property to a bargain basement price and smart investors watch for property owners who must sell to take advantage of the owner’s strong motivation to quit the property. Always try to avoid ever reaching the moment when you are forced to sell.

These are just of many tips I use to maximize my profits from my real estate investments and so can you.

Real Estate Investing For Beginners – What Every New Investor Wishes He’d Been Told Before

As a new real estate investor, when you begin researching information on real estate investing for beginners, you’ll find that there are a lot of gurus and mentors out there looking to sell you high priced information. You’ll also find plenty of chatter-boxes at local real estate investing forums and other watering holes that will share (brag?) all day long about their investing trials and tribulations, especially if they have tenants or rehabs. (Those types of projects tend to be fraught with problems, something that can scare beginner real estate investors off – when maybe it should be attracting them!) You can also find some excellent offline resources at the library, bookstore and your local investor club. Maybe you’ll even find someone who’s out in the trenches on a regular basis and is willing to take you out on the streets to show you some of his properties.

What you won’t find as often, especially for free, is a coherent, executable business plan detailing what it takes to get going with real estate investing as a beginner.

What you really need is a handbook entitled: Real Estate Investing For Beginners that lays everything out for you A to Z, with what to do at every step along the way.

Unfortunately, putting together a super and useful reference like that is time consuming and you have to consider that a) If someone is already making money investing in real estate, her time is valuable, and b) if she’s going to invest her valuable time in putting together a real estate investing guide for beginners, she’s got to have an angle.

That’s an excellent thing to keep in mind – everyone in the real estate investing education industry seems to have an angle. They are directly incentivized to make you feel that real estate investing is easy, you can do it, and if you just part with some money, they will give you the handbook with all the answers.

BEWARE: If you can’t figure out how they’re getting paid, you’re missing something… Everyone wants to get paid in this business.

Well, I hate to tell you… I don’t have that comprehensive handbook for you either.

That’s the bad news.

The good news is that I can give you some very important words of wisdom that helped me when I was getting started in real estate investing as a beginner. (And I started right out of college without a good job or anything, so don’t think it can’t be done.)

Real Estate Investing Observations – What Every Real Estate Investing Beginner Needs To Know:

1) You will have to trade time or money to get what you want in real estate. You can’t get something for nothing, so even if you buy an expensive course to get someone else’s experience and shave years off your learning curve, you’ll still HAVE a learning curve. Plus, you’ll need to find leads, and that type of marketing takes (you guessed it) time and/or money.

2) Leverage cuts both ways. When the market is going up, leverage can be a great ally in helping you acquire more property with less of your own money. However, when the market is soft or declining, as also happens with real estate market cycles, having a lot of leverage can put you “upside down” on your equity and cash flow – a very risky situation. Protect yourself by “making your money when you buy” and passing up those “skinny” deals.

3) It’s all about NEGOTIATING with the motivated sellers. A lot of courses make you believe that if you find the motivated sellers, you can just pluck up the deals like daisies in the orchard. That’s almost true. Whether you’re working in commercial or residential real estate, you’ll get much better deals when you negotiate with a motivated seller. However, the key is that you must NEGOTIATE. You have to make offers that will work for you and engage the sellers in conversation. Very rarely will the buildings be lying these listed for 50 cents on the dollar (if they are, they’ll be snapped up by other investors). You have to find sellers that you think may be motivated and offer them your low cash offer or terms offer in order to see if they’re willing to work with you. Engage them in the conversation by making lots of offers, and NEGOTIATING with the ones that are motivated.

4) Figure out your rate of return. Sometimes, when you don’t have a deal, it’s easy to think “any” deal would be good. However, sometimes the best deals are the ones you PASS on – you “make” your money by saving yourself from some expensive mistakes. Don’t waste time on property that doesn’t make sense when you run the numbers. Don’t get emotionally attached just because someone says they’re motivated or willing to work out terms with you. Run the numbers. Always focus on the numbers.

5) You get paid for solving problems. This is a business with a lot of problems. Sellers can get very emotional, or have a lot of financial trouble, at the time that you’ll be working with them. That’s stressful for anyone, especially when the transfer of a large asset like a house, apartment building or office/retail center is involved. Realize that you may go through some challenging emotions of your own. That’s natural. If you can hold it together and survive the up-and-down roller coaster, you should do okay.

No one says real estate is easy unless they have a course to sell you. It can offer some great returns, but there’s a reason not everyone goes after them. Not every property is a winner and finding and acquiring the winners can be a challenge. However, if you are committed to making your real estate investments work for you, then focus on getting yourself educated and staying in for the long run.

If you’d like more information on what it takes to be successful in real estate – From two real people who have done it with single family homes and commercial real estate – then please join in the conversation at TheRealWealthBlog [http://www.TheRealWealthBlog.com]. This is a great guide on Real Estate Investing [http://www.TheRealWealthBlog.com] For Beginners

Now, just to be “authentic” with you, I think it’s fair to share our angle, since I stated that everyone has one. Currently we are offering our services “by the hour” as real estate coaches and consultants if you have any questions on deals you’re working on or if you’d like to get going.

We both have logged hundreds of hours helping students get started with real estate investing across the country, and we’d be happy to help you, too. Without the monthly residual fees or high cost-of-entry coaching programs. If you need help with your investing strategy, let’s see if we’re the ones you need.

Real Estate Investing in Foreclosures

Miami real estate investing is not very hard to learn, even though that there are many facets that are essential to understand before attempting to start investing. While many books and seminars are offered on investing only a few deliver the desired results. Investing is not taught in any university and it is more of an art than an exact science. It requires a lot of perseverance and determination. Many investors learn by trial and error although a mistake could be very expensive and usually devastating. Numerous millionaires made their money through real estate investments. Information, education and research are major considerations for an investor to be successful.

Real estate investing in Miami, Florida is a full time business where investors are constantly trying to maximize their profits and minimize their risks in other to generate wealth over time. Investing is a verified long term wealth creator. It is a numbers game and many of the transactions will not work but it is all worth it when one deal goes through and all your hard work is rewarded. It takes a lot of time and effort to effectively dominate the art of real estate investing. It is a risky business but it is the best way to create lasting financial security. Investing in Miami real estate is an excellent way to make a positive monthly income and built long term wealth and obtain financial independence.

Investors in Miami real estate have recently taken a beating and many have seen their investment properties lose value. An investor should not panic and sell in this market to avoid huge loses. Since it is a long term business an investor should realize that the time is now to rent the property and hold until the market turns around. If an investor requires a predictable and safe return on investment then investing in Miami real estate is not the answer. The business of real estate investing is very risky, and unpredictable but well worth the effort. An investor should consider buying foreclosures and bank owned properties. The Miami real estate market has hit bottom and it should be bouncing back very soon.

Miami real estate investing is different than various types of investing. An investor must overcome many roadblocks and obstacles. Usually finding financing is the single most overwhelming challenge an investor will face when trying to purchase Miami real estate. Using leverage in the business is common so arranging financing is very important. Do not purchase investment property with no money down. Little or no money down has caused many properties to go into foreclosure recently. Investing is not as perplexing, time consuming and financially draining as one might imagine.

Bank owned properties or Reo’s and Short Sales are a good way to start to look for a good deal in Miami real estate to purchase. The list of bank real estate owned (Reo) properties is huge. Not all banks want to discount properties so finding a good property to buy takes a lot of work and patience. Short Sales are the new trend in speculating in Miami real estate. Banks are not very eager to short sale their inventory and it takes usually about two months for the bank to accept or reject the offer. Government foreclosures are another to avenue to search. These properties include HUD, Housing and Urban Development, VA, Veteran Administration, FNMA and Freddie Mac. HUD homes are very popular and usually they will sell to the higher bidder in a weekly online auction. Investors are allowed to bid when the property does not sell to owner occupants. These HUD-FHA foreclosures properties are offer an excellent value. Foreclosures remain the best way for investors to start in the Miami real estate investing business since most of them have instant equity.

The best way to start investing in Miami real estate is buying foreclosures. The tremendous amount of foreclosures now in the Miami real estate market overwhelmingly gives the investor a lot of inventory to choose from in order to purchase the right property at a discounted price. This opportunity will more than likely never be available again and investors should take full advantage. An experienced Miami real estate agent who specializes in foreclosures is essential in order to guide the investor. The agent must have access to current bank owned REOs, foreclosures, short sale properties, pre-foreclosures government foreclosures and other distress listings. Investing in Miami real estate is a very exciting and rewarding business.

Real Estate Investing – Books,TV Infomercials, and Seminars

Real estate investing has become popularized today because of real estate investing TV infomercials and traveling seminar circuits. But real estate investing has not always been so popular.

In the 1960s, William Nickerson wrote, “How I Turned $1000 into Three Million in Real Estate” and “How to Make a Fortune Today Starting from Scratch.” It was one of the first real estate investing books to get national attention. A little later, Al Lowry authored “How You Can Become Financially Independent by Investing in Real Estate.” Al Lowry might be called “the father of the modern-day real estate seminars,” because he was the first to hold seminars as a result of his book sales.

But it was Mark Haroldsen who carried the real estate investing book/seminar thrust to the next level. Haroldsen wrote, “How to Wake Up the Financial Genius Inside You.” If you were tuned in to real estate investing at that time, you remember the newspaper and magazine advertising showing a picture of suave and bald-headed Mark leaning against the front hood of his Mercedes. The picture appeared everywhere in full page ads of major publications. And as Mark began selling his books, he began holding real estate investing seminars. I have had lunch with Mark and Al Lowry as they swapped stories of the advertising blitzes that vaulted them into national prominence for their real estate investing prowess. Mark later wrote “The Courage To Be Rich” and “Tax Free.”

But it was Robert Allen who capitalized on the previous groundwork by Lowry and Haroldsen. Robert Allen was reportedly paid $1 million advance royalties for his best-selling book, “Nothing Down,” a compilation of 50 techniques for buying property with no money. Robert had learned these techniques from several years experience with a commercial real estate firm. He later wrote “Creating Wealth” and “Getting Started in Real Estate Investing.” The Robert Allen Real Estate Investing Seminars became a phenomenal marketing bonanza. Conventions were held in the major cities across the country, like Orlando, LA, Dallas, Chicago and Atlanta. The authors of various real estate investing techniques spoke at these seminars, but their spiel focused on selling packages of real estate investing materials that they offered for sale. Millions of dollars of real estate investing materials were sold at these 3 day conventions. The convention frenzy ushered in what has since become known as “The Nothing Down Real Estate Movement” of the early to mid-1980s.

I keep all of these books in my personal library, and you can probably still find them in your public library and book stores. There’s a lot of great information in these books that can make you very knowledgeable, even though some of the ideas are out-dated.

We are now presented a variety of ways for making money in real estate investing in TV infomercials, books and seminars. Which is best? Who can say? Real estate investing is learned through trial and error. Real estate investing skills and techniques are acquired by practice. I don’t think anyone can dogmatically recommend a technique best for another person. Every real estate investor has unique needs and is in a unique situation. Objectives of real estate investing differs.

However, if you are limited with real estate investing educational dollars and need to generate quick return on investment, I think fixing up cheap houses is an ideal beginning point. Real estate investing in makeover properties generates quick, profitable dollars with low risk.

Easy Action Steps to a Successful Start in Real Estate Investing

If you happen to watch cable or satellite television on the weekends, you can find between 20 and 30 channels early in the day with get rich quick infomercials hawking everything from books, tapes, seminars and even personal coaching services. Most are centered around real estate and I am not sure they are worth the time it would take you to order them by phone. I have spent thousands of dollars on real estate home study courses through the years and will continue into the future. I am always looking to further my education and understanding of what is really working in the investment real estate world.

Because of the time, energy and dollars that I have spent in the past, I have a pretty good idea of what a real estate investor wants to avoid as well as the best steps to take for a successful start. Education definitely plays a role in the success of a real estate investor as well as business savvy, attitude and at times, luck!

Here are a few detailed steps that an investor can take to improve the chances for success.

– Learn the basics of real estate in general.

As with any investment strategy or business, real estate comes with its’ very own lingo. There are terms and phrases that many of us have heard in the past, yet may not know the exact meaning. It is very important from the get go to do the research and learn the basics such as the meaning of the terms and phrases that are used in the real estate industry every day. You can start by using a search engine and searching the phrase “real estate definitions”.

– Begin home study education.

There are great benefits to home study and I do not mean the courses we eluded to on weekend cable T.V. At your local library, in the real estate investing section, there will be multiple titles recently written by authors with experience in their topic. Check out as many titles as you can read in a week and o to work reading. Write down sentences and topics that come up in the books that interest you and that fit into your reasoning for starting to invest in real estate. This will be the start of your plan for getting started.

– Develop a game plan.

By this point, you have an idea of the general terms and phrases for the property investing world and have begun to grow your interest and understanding of the specific strategies for real estate investing. It is time to formally develop your plan and start taking action. Each of the real estate investing books that you will be reading give specific advice about team building. It is a crucial step for your success and the best books offer advice about who to put on your team, where to find them and how important they are to your over-all success. Before you can start investing, you must have a plan for where you are going and how you are going to get there.

– Join local organizations for investors.

In every city, county and state there are multiple organizations whose missions are to assist real estate investors. Each of these organizations holds monthly meetings and some of the best even hold weekly meetings, where investors can network and learn. These meetings are crucial to a beginner investor because they offer the opportunity to build your team with experienced members. They also are fantastic groups to attend for tips, tricks and education. Join a group close to you and make your attendance mandatory. Attend as many meetings as possible each month. Often times, the simple step of surrounding yourself with like-minded individuals who are positive and re-enforce your determination to succeed, can have the biggest benefit on your future success.

– Find partners & Do not fall for get rich quick!

One mistake that is easy to make in the beginning is to set off on the path of “go it alone”. Another is to believe that just around the corner is a pot of gold if I can just find a deal like those guys on T.V.! One thing that is seldom talked about is the fact that most real estate investors have used partnerships in the past if they are not using them now. Partnerships are a great way to spread the risk of investing while learning the ropes. Those risks include using less of your available capital, credit and time. Partnerships can also be structured to be a simple 50/50 partnership splitting all costs and profits or a slightly more complicated partnership with one partner providing money and the other providing the deals, follow through and managing the investments. Either way, going it alone can be a lonely, long and expensive way to get started investing.

– Do not quit your day job!

This is a biggie and is a MAJOR mistake made by some first time real estate investors. Investing in real estate requires a total commitment – a “burning of the boats” mentality. There is no turning back when you decide to go all in. And in that statement lies the problem with leaving your day job first. Take time to develop your team, to build cash reserves, to learn the ropes. Take time to make small mistakes before you leave your full time employment and make a big mistake! Investing in real estate is a big picture endeavor and as an investor you have to be able to clearly see your future and plan accordingly.

These last two tips really go to the heart of why some investors not only fail, but fail miserably. Many times you can overcome the mistakes with the first few tips here by perseverance and a little luck. If you make one of the following two mistakes, they can quickly break a new investor and sour the experience for a good long time. Then again, if you follow all the previous tips, chances are you will have the team around you to guide you right past these last two tips and onto smooth investing.

– Once started, DO NOT under estimate repairs.

When you are estimating the repairs to a property for investment, unless you have an experienced contractor and trusted advisor on your team, you can miss the mark wildly. Even the best home study courses are not able to provide you with an accurate ability to estimate costs. It takes experience and time before you can accurately guesstimate repair costs. Missing the mark on estimated repairs can quickly break a bank account and take a property from profitable to money pit quickly!

– Do not purchase investment property for equity or appreciation

There is no bigger mistake an real estate investor can make today than to purchase property for its equity holding or future appreciation. Long-term investing today is centered around the ability of a property to perform with a positive monthly cash flow. In my home city for investing, Memphis, real estate investors purchase properties at extreme discounts, but over look those discounts if the property does not provide a high enough monthly cash flow. Equity and expectations of future home values are not good reasons to purchase investment property.

Many individuals will purchase their first investment property in 2010. Some will view their purchase as strictly an investment and others will look for real estate to provide a new profession. Either way, it is extremely important that first-time investors seek all of the help, advice and experience they can get from other investors.

The Myth of Real Estate Investing and 7 Ways to Make the Most Money From Your Property Investment

Investing in Real Estate has become urban legend the myths abound about how much you can increase your wealth by investing in real estate and in particular residential real estate, so much so that the average Joe believes that making money and creating wealth when it comes to real estate is a given and in alienable right so to speak.

Average mums and dads are jumping onto the real estate bandwagon with no knowledge or training in the fundamentals of investing. These folks are fed the myth that using their equity from their family home will miraculously make them into real estate tycoons, all to often these poor misguided souls end up losing the home and everything else in their pursuit of real estate’s Eldorado.

To perpetuate the myth these naive investors are advised to hold on to their real estate investments for ten years or longer, this is great in theory if you are in your twenties and do not need the profits in the immediate sh rt term to help fund a decent retirement, unfortunately when you look at the demographics of these investors they are in their fifties with plenty of equity in their family homes most usually own their family home and have neglected doing any thing for their retirement till now and in horror discover that they will not be able to have their current lifestyle on the pension.

Little wonder real estate investment seminars are packed with these late bloomers all hoping to make a fortune by investing in residential real estate, the seminar presenters ensure that is all these folks here, after all this is a valuable gravy train.

Try this little trick next time a telemarketer calls and asks you to attend a real estate investment seminar, and the telemarketer asks you if you own your own home and how much equity you have in it, reply by saying that you have none, I will guarantee that before the word none leaves your mouth they have hung up on you, interesting isn’t it?

Tragically no one is told when a real estate investment has gone bad or failed to perform as happens on a daily basis with the stock market, why is this so? One of the major reasons are the volumes of money that Governments, Banks and marketers make from selling the residential investment myth, that is also the reason why Governments have been loathe to legislate that investors under go an investment training program before they can invest, as once the myth is busted the gravy train will not be as plentiful and the flow on effect into allied industries would be catastrophic.

This myth is well and truly busted as you can loose everything from a failed real estate investment and there are no such things as guaranteed growth with out doing some work for it.

Here are 7 simple ways to maximize your money from real estate investment

1. Know your profit before you buy

Do your due diligence and find out if the price you are paying is below market value, a simple rule is can you resell this property today for a profit and if so how much.

2. Type of Neighborhood?

The community surrounding the property can change in a variety of ways that can adversely affect your real estate income property. Increasing vacancy, for instance, can lead to reduced rents, which in turn means reduced maintenance causing building deterioration, This can cause a roll on effect if more properties start to decline in the whole neighborhood,compounding the problem.

The nearby construction of facilities such as prisons, sewer treatment plants, and airports will also likely have an adverse effect on the area. Also, perhaps more subtle and slower in coming, is a decline due to increased crime, perhaps resulting from an adjoining neighborhood spill over. If you still want to invest here find out what it is that makes it special that everyone else has over seen, often gems are discovered with a little digging,

3. Impact of poor or neglected Infrastructure

The impact of being directly under the flight path of airplanes, construction of a major highway or intersection can limit access to the property, cause noise and dirt by the construction and all this can have a negative impact on the property’s ability to attract and keep tenants. The end result may be an increase in your investment real estate value, but construction and major works can take up to a year or more and during that time you could expect your real estate investment value to drop. Or worse still the infrastructure is neglected and the local authority does not have the Tax base to start remedial works to bring it up to standard,

4.Controls

Governmental controls and regulatory changes to zoning can adversely impact real estate investment properties. Real Estate investors that purchase raw land for development, for instance, can see their plans grind to a halt because of a building moratorium or anti-development sentiment. All of which results in downturn in value.

5. Finance

Difficulty obtaining finance or the lenders require more of your capital to top up your borrowings,yers for your rental property if you decide to sell, This type of condition is prevalent at the moment as lenders are devaluing the amount that they are willing to lend against real estate, in most instances I have seen lenders valuations or real estate down by up to 30% to 40% of the contract price depending on the region this could be higher again, this trend should alert the investor that the deal they think is great may not be so great after all, unfortunately marketers have this covered as they are dealing with naive and unsophisticated investors by saying that the lenders always value the property for less, if that is what some one lending you money says about your intended investment wouldn’t it be prudent to listen and renegotiate or if that is not possible walk away from the deal.

6. Lack of or no maintenance.

If your property is the run down, get it brought back up to a good condition. This will make it more appealing to prospective tenants

7. Pressure to sell

Highly motivated sellers may reduce a property to a bargain basement price and smart investors watch for property owners who must sell to take advantage of the owner’s strong motivation to quit the property. Always try to avoid ever reaching the moment when you are forced to sell.

These are just of many tips I use to maximize my profits from my real estate investments and so can you.

Questions To Ask Before Enrolling In A Real Estate Investment Education And/Or Coaching Program

If you are like me, then you have an interest in real estate investment and want to do the right thing by educating yourself so that you can obtain your first real estate investment cheque. I have spent thousands of dollars over the years trying to find the company that would help me accomplish this goal. So what did I do? I watched various infomercials on the television with amazing testimonials of real estate investment success. I quickly found that once I registered to attend, my information was sold to various marketing companies, and I was in receipt of invitations to other investment opportunities that I didn’t even know about. Okay. Now I have sifted through all the invitations and I am on my way to a one-day seminar.

For the most part, the information delivered is tantalizing and I am hungry for more knowledge and the opportunity to start working on my first deal. I also find that the information delivered in the one-day seminar is in bits – for a beginner investor, it is not enough material to be useful. But what do I hear? I now have to register for a weekend workshop to learn more. Full of excitement and determination, I pay the $1500 to $2500 cost for the workshop and off I go. Again, the information presented is titillating and at least one of the presented methods is immediately implementable. The other participants and I followed the instructions given, but no results – we could not find a property matching the given search criteria. Therefore, the audience was not taught what the next steps would have been had we done so. Still filled with hope, I took careful notes and listened intently for the remainder of the workshop. What’s this I hear? I can have advanced training if I want, a coach to work with me one-on-one, and the almost guarantee that I would make money at that level? What’s the cost? Oh, only between $10 000 to $100 000. This is where I hit the proverbial brick wall. Where was I to find all that money, and for some of the workshops, the money had to be paid the very weekend! The long and short of the model is this; one has to spend anywhere from $1500 to about $100 000 without even doing your first real estate deal! It didn’t make sense.

Wait a minute. I now found that most of the real estate investors, who were calling themselves and each other gurus, were doing a massive on-line marketing campaign during the market’s downturn, only this time downplaying the ‘guru’ title. They were all offering one-on-one coaching. Why? No one was attending the conventions and workshops as before. The personal coaching idea sounded good. I decided to check out a few of them and tried one of them. I tell you the truth, because I was a rookie, I didn’t know what to ask for or what to expect from this coaching. As you can imagine, I did not get my money’s worth. By the way, the coaching was through e-mail and sometimes instant messaging only, at a cost of USD $1000 per month. Now, I could have allowed all these disappointments to derail my vision and cause me to be bitter. I refuse. Instead, I decided to use the experience to help others in similar situations make better decisions, spend less, and actually make money in real estate investment.

The sum of it all is this: not having the right real estate investment education will cost you money and just as truly; obtaining the right real estate investment education will cost you money. However, obtaining the right education is an investment, not a liability. What should one look for in a real estate investment coach/coaching program? What questions should be asked? Here are a few to consider:

• Before any money exchange hands, an outline should be provided to the student to ensure that both parties/sides understand what will be offered.

• Costs should be clearly defined and explained.

• Discuss funding. Will the coach/organization provide funding for your real estate deals? If not, will the coach/organization provide you with information that will allow you to access funding? What type of funding can you expect? Will it be transactional funding, hard money, private money, other?

• Discuss if there will be or is there an option to partner on deals. Will the coach/organization put up the funding for the real estate deal while the student does the ‘ground’ work? If partnership is an option, discuss and agree on the split. Will it be a fifty-fifty split?

• Discuss availability of the coach: Does the student have telephone, e-mail, and/or text access? What response time might the student expect? Does the student have to pay the fees for services like Skype or is it included in the coaching fee?

• What are all the things included in the coaching fee?

• If the coach is not available, is there a mentor or someone else that will be available?

• Is this a stand-alone coach or is there a professional team available to the student? Is there a lawyer, accountant, contractor, et cetera that are a part of the team? If the coach is a one-man-band, then this might not be a good option for you.

• Is there creative financing for property acquisition?

• What are the payment options for the coaching costs? What are the financing terms?

• How will the education be delivered? Will it be delivered through webinars, CDs, mp3’s, other? For how long does the student have access to the education?

• How current are the strategies being taught? Is there proof?

• Relative to the cost, how long is the coaching? How many hours of one-on-one coaching?

• Will the student be provided with a virtual assistant?

• What peripheral costs are entailed in the program? For example, LLC, websites, 800 numbers, et cetera. What other additional costs might the student expect to pay/cover?

• What real estate investment qualifications does the coach have? If the coach is reticent to discuss this, then that might be a cue to not sign up with that particular coach/organization. Also, if the coach has a bad attitude, then you should reconsider using him/her.

• Research the coach on-line. Look at reviews. Check out Facebook, MySpace, YouTube, LinkedIn, et cetera. Also use these sources to review his/her profile. Hint: If the coach has less than five hundred contacts in their profile, then that could be proof of inexperience.

• What is the approximate turn-around time from the time the student signs up and follows all coaching instructions, to the time the student does his/her first deal?

• How many hours per day/week is the student required to invest?

• How are deals analyzed? Does the coach personally review them? How many exit strategies does the coach utilize per deal?

• What is the coach’s real estate investment specialty: wholesaling, fix and flip, buy and hold, et cetera?

• What real estate strategy are you expected to start with? Will this complement or go against your current financial situation?

• How much money is the student expected to have on hand to do his/her first real estate deal?

• If student does not make any money in say the first three months of the coaching, what is the next step? Will the current real estate investment strategy be changed or adjusted?

• What guarantees does the coach/organization provide?

• Is there a rescission period? What is it?

• Can the student do the coaching with his/her spouse or business partner at no additional cost?

With these points to consider, you should be well on your way to making the right decision as to your real estate investment education and coaching. I am sure that as you read through the points, they caused you to think of other questions that you might ask. Good.

Questions To Ask Before Enrolling In A Real Estate Investment Education And/Or Coaching Program

If you are like me, then you have an interest in real estate investment and want to do the right thing by educating yourself so that you can obtain your first real estate investment cheque. I have spent thousands of dollars over the years trying to find the company that would help me accomplish this goal. So what did I do? I watched various infomercials on the television with amazing testimonials of real estate investment success. I quickly found that once I registered to attend, my information was sold to various marketing companies, and I was in receipt of invitations to other investment opportunities that I didn’t even know about. Okay. Now I have sifted through all the invitations and I am on my way to a one-day seminar.

For the most part, the information delivered is tantalizing and I am hungry for more knowledge and the opportunity to start working on my first deal. I also find that the information delivered in the one-day seminar is in bits – for a beginner investor, it is not enough material to be useful. But what do I hear? I now have to register for a weekend workshop to learn more. Full of excitement and determination, I pay the $1500 to $2500 cost for the workshop and off I go. Again, the information presented is titillating and at least one of the presented methods is immediately implementable. The other participants and I followed the instructions given, but no results – we could not find a property matching the given search criteria. Therefore, the audience was not taught what the next steps would have been had we done so. Still filled with hope, I took careful notes and listened intently for the remainder of the workshop. What’s this I hear? I can have advanced training if I want, a coach to work with me one-on-one, and the almost guarantee that I would make money at that level? What’s the cost? Oh, only between $10 000 to $100 000. This is where I hit the proverbial brick wall. Where was I to find all that money, and for some of the workshops, the money had to be paid the very weekend! The long and short of the model is this; one has to spend anywhere from $1500 to about $100 000 without even doing your first real estate deal! It didn’t make sense.

Wait a minute. I now found that most of the real estate investors, who were calling themselves and each other gurus, were doing a massive on-line marketing campaign during the market’s downturn, only this time downplaying the ‘guru’ title. They were all offering one-on-one coaching. Why? No one was attending the conventions and workshops as before. The personal coaching idea sounded good. I decided to check out a few of them and tried one of them. I tell you the truth, because I was a rookie, I didn’t know what to ask for or what to expect from this coaching. As you can imagine, I did not get my money’s worth. By the way, the coaching was through e-mail and sometimes instant messaging only, at a cost of USD $1000 per month. Now, I could have allowed all these disappointments to derail my vision and cause me to be bitter. I refuse. Instead, I decided to use the experience to help others in similar situations make better decisions, spend less, and actually make money in real estate investment.

The sum of it all is this: not having the right real estate investment education will cost you money and just as truly; obtaining the right real estate investment education will cost you money. However, obtaining the right education is an investment, not a liability. What should one look for in a real estate investment coach/coaching program? What questions should be asked? Here are a few to consider:

• Before any money exchange hands, an outline should be provided to the student to ensure that both parties/sides understand what will be offered.

• Costs should be clearly defined and explained.

• Discuss funding. Will the coach/organization provide funding for your real estate deals? If not, will the coach/organization provide you with information that will allow you to access funding? What type of funding can you expect? Will it be transactional funding, hard money, private money, other?

• Discuss if there will be or is there an option to partner on deals. Will the coach/organization put up the funding for the real estate deal while the student does the ‘ground’ work? If partnership is an option, discuss and agree on the split. Will it be a fifty-fifty split?

• Discuss availability of the coach: Does the student have telephone, e-mail, and/or text access? What response time might the student expect? Does the student have to pay the fees for services like Skype or is it included in the coaching fee?

• What are all the things included in the coaching fee?

• If the coach is not available, is there a mentor or someone else that will be available?

• Is this a stand-alone coach or is there a professional team available to the student? Is there a lawyer, accountant, contractor, et cetera that are a part of the team? If the coach is a one-man-band, then this might not be a good option for you.

• Is there creative financing for property acquisition?

• What are the payment options for the coaching costs? What are the financing terms?

• How will the education be delivered? Will it be delivered through webinars, CDs, mp3’s, other? For how long does the student have access to the education?

• How current are the strategies being taught? Is there proof?

• Relative to the cost, how long is the coaching? How many hours of one-on-one coaching?

• Will the student be provided with a virtual assistant?

• What peripheral costs are entailed in the program? For example, LLC, websites, 800 numbers, et cetera. What other additional costs might the student expect to pay/cover?

• What real estate investment qualifications does the coach have? If the coach is reticent to discuss this, then that might be a cue to not sign up with that particular coach/organization. Also, if the coach has a bad attitude, then you should reconsider using him/her.

• Research the coach on-line. Look at reviews. Check out Facebook, MySpace, YouTube, LinkedIn, et cetera. Also use these sources to review his/her profile. Hint: If the coach has less than five hundred contacts in their profile, then that could be proof of inexperience.

• What is the approximate turn-around time from the time the student signs up and follows all coaching instructions, to the time the student does his/her first deal?

• How many hours per day/week is the student required to invest?

• How are deals analyzed? Does the coach personally review them? How many exit strategies does the coach utilize per deal?

• What is the coach’s real estate investment specialty: wholesaling, fix and flip, buy and hold, et cetera?

• What real estate strategy are you expected to start with? Will this complement or go against your current financial situation?

• How much money is the student expected to have on hand to do his/her first real estate deal?

• If student does not make any money in say the first three months of the coaching, what is the next step? Will the current real estate investment strategy be changed or adjusted?

• What guarantees does the coach/organization provide?

• Is there a rescission period? What is it?

• Can the student do the coaching with his/her spouse or business partner at no additional cost?

With these points to consider, you should be well on your way to making the right decision as to your real estate investment education and coaching. I am sure that as you read through the points, they caused you to think of other questions that you might ask. Good.

3 Things You Must Do to Succeed at Real Estate Investing

Here are three simple guidelines that must be followed if you plan to succeed at real estate investing. It’s not everything, of course, but at the very least, you must be willing to commit to these things if you want to become a successful real estate investor.

Shall we get stared?

Acknowledge the Basics

Real estate investing involves acquisition, holding, and sale of rights in real property with the expectation of using cash inflows for potential future cash outflows and thereby generating a favorable rate of return on that investment.

More advantageous then stock investments (which usually require more investor equity) real estate investments offer the advantage to leverage a real estate property heavily. In other words, with an investment in real estate, you can use other people’s money to magnify your rate of return and control a much larger investment than would be possible otherwise. Moreover, with rental property, you can virtually use other people’s money to pay off your loan.

But aside from leverage, real estate investing provides other benefits to investors such as yields from annual after-tax cash flows, equity buildup through appreciation of the asset, and cash flow after tax upon sale. Plus, non-monetary returns such as pride of ownership, the security that you control ownership, and portfolio diversification.

Of course, capital is required, there are risks associated with investing in real estate, and real estate investment property can be management-intensive. Nonetheless, real estate investing is a source of wealth, and that should be enough motivation for us to want to get better at it.

Understand the Elements of Return

Real estate is not purchased, held, or sold on emotion. Real estate investing is not a love affair; it’s about a return on investment. As such, prudent real estate investors always consider these four basic elements of return to determine the potential benefits of purchasing, holding on to, or selling an income property investment.

1. Cash Flow – The amount of money that comes in from rents and other income less what goes out for operating expenses and debt service (loan payment) determines a property’s cash flow. Furthermore, real estate investing is all about the investment property’s cash flow. You’re purchasing a rental property’s income stream, so be sure that the numbers you rely on later to calculate cash flow are truthful and correct.

2. Appreciation – This is the growth in value of a property over time, or future selling price minus original purchase price. The fundamental truth to understand about appreciation, however, is that real estate investors buy the income stream of investment property. It stands to reason, therefore, that the more income you can sell, the more you can expect your property to be worth. In other words, make a determination about the likelihood of an increase in income and throw it into your decision-making.

3. Loan Amortization – This means a periodic reduction of the loan over time leading to increased equity. Because lenders evaluate rental property based on income stream, when buying multifamily property, present lenders with clear and concise cash flow reports. Properties with income and expenses represented accurately to the lender increase the chances the investor will obtain a favorable financing.

4. Tax Shelter – This signifies a legal way to use real estate investment property to reduce annual or ultimate income taxes. No one-size-fits-all, though, and the prudent real estate investor should check with a tax expert to be sure what the current tax laws are for the investor in any particular year.

Do Your Homework

1. Form the correct attitude. Dispel the thought that investing in rental properties is like buying a home and develop the attitude that real estate investing is business. Look beyond curb appeal, exciting amenities, and desirable floor plans unless they contribute to the income. Focus on the numbers. “Only women are beautiful,” an investor once told me. “What are the numbers?”

2. Develop a real estate investment goal with meaningful objectives. Have a plan with stated goals that best frames your investment strategy; it’s one of the most important elements of successful investing. What do you want to achieve? By when do you want to achieve it? How much cash are you willing to invest comfortably, and what rate of return are you hoping to generate?

3. Research your market. Understanding as much as possible about the conditions of the real estate market surrounding the rental property you want to purchase is a necessary and prudent approach to real estate investing. Learn about property values, rents, and occupancy rates in your local area. You can turn to a qualified real estate professional or speak with the county tax assessor.

4. Learn the terms and returns and how to compute them. Get familiar with the nuances of real estate investing and learn the terms, formulas, and calculations. There are sites online that provide free information.

5. Consider investing in real estate investment software. Having the ability to create your own rental property analysis gives you more control about how the cash flow numbers are presented and a better understanding about a property’s profitability. There are software providers online.

6. Create a relationship with a real estate professional that knows the local real estate market and understands rental property. It won’t advance your investment objectives to spend time with an agent unless that person knows about investment property and is adequately prepared to help you correctly procure it. Work with a real estate investment specialist.

There you have it. As concise an insight into real estate investing as I could provide without boring you to death. Just take them to heart with a dash of common sense and you’ll do just fine. Here’s to your investing success.