Simply Junior

Many people have become millionaires by investing in real estate than through any other form of investment. The reason real estate has paved the way to riches for so many people are because there are so many different ways to become rich. Here are 4 ways to become wealthy as a real estate investor.

The best way to become rich as a real estate investor is to purchase properties at below market value. This allows you to have immediate equity in the difference between market value and your purchase price. If you hold the property for a long time, you are also able to reap the benefits of the appreciation in the home’s value. So how do you find a property at below market value? Here are 4 ways to find under priced properties. 

#1 – Dirty Houses

When you drive down a street, you immediately recognize the one house that has not been taken care of. It may have grass that has not been cut or there are visible signs that repairs have not been made to the exterior of the property. Houses that are in bad shape are referred to as dirty houses. Most homeowners do not want to purchase a property that needs an extensive amount of work. As an investor you can usually purchase these properties at below market value.

#2 – Distressed Sales

Sometimes homeowners are forced in a situation in which they need to quickly sell their property. In exchange for a quick sale they will usually sell the property at way below market value. Anyone going through a divorce, bankruptcy, job loss or relocation is a great source for quick sale.

#3 – Expired Listings

Sometimes homeowners try to sell their property but they are not able to find a buyer. They will usually have a set period of time that they have given to their real estate agent in which to list their property. If their property has not sold at the end of the listing period, it is called an expired listing. The homeowners want to sell their property but are unable. If you contact the owner you might be able to purchase their property at a discounted price.

#4 – Death

When a family member passes away, the family may inherit a home that they do not want. This is especially true if the heirs live out of town. Deaths are listed in the newspaper. You can read through these listings and contact the executor of the estate to see if the heirs are willing to sell. Usually the heirs do not know the value of the property and might be willing to sell it to you at below market value.

Real estate can be a great career, but it is not as easy as it looks to become successful. In my last article I talked about the reasons why you should become a real estate agent. Before I get into the reasons of why you shouldn’t become a realtor I want to go over the reasons why you should. First and foremost, the harder you work the more money you are going to make. Not only can you make a lot of money but there is no limit to how much money you can make. Another reason why you should become a real estate agent is that you can create your own schedule. With a flexible schedule you are able to sleep in when you need to, and go home to watch a basketball game during March Madness. I will get to the reasons why a flexible schedule is not always good a little later. One final reason that you should become a real estate agent is because you can have a major impact on a lot of people.

If you like meeting the needs of your peers then this may be the right profession for you. However, before you decide to jump right in, let me explain to you the reasons why you should think twice about becoming a realtor.

The main reason why you should stay away from real estate is because it is usually based solely on commission. That means that if you don’t sell anything, you don’t make anything. I was na

There are many different ways to generate your own real estate leads, it’s just a matter of being creative. Of course, there are the traditional ways: referrals from past clients, subscribing to a lead generation service, and putting contact forms on your own website are all great ways of generating real estate leads. You may want to dig a little deeper though.

The first rule to being a good agent is realizing that real estate leads are EVERYWHERE YOU GO. And I do mean everywhere. You should make it a goal to tell a certain number of new people a week about yourself and the fact that you’re a real estate agent. Stopping at a convenience store for a quick bite? Strike up a conversation with the cashier or the person in line behind you. Give them your business card. So what if they wind up throwing it out, you still made the connection. Were you recently invited to a wedding? Don’t be afraid to take some business cards along and start networking and collecting those real estate leads like they’re baseball cards. Don’t forget to hit up the bride and groom – they may be shopping for their starter home within the year.

Don’t be afraid to send mailings, post fliers, do whatever you can to get your name and face out there and the real estate leads will come. Come up with an idea for a contest or promotion – perhaps everyone who submits their information on your website will be put in a drawing to win a $100 gift card from Target. Or the first 20 people to sign up for your newsletter will receive a $10 gift card tot he store of their choice. Even for real estate agents, the age old adage is true: you have to spend money to make money.

There are hundreds of agents out there who want your lead’s business. It is up to you stand out and become unforgettable to your real estate leads. After all, if you’re not unforgettable, you WILL be forgotten. Giving away free things (especially something free that might have your logo on it) is a great way to be memorable.

Another great way to accumulate your own real estate leads is to party! That’s right, throw a party. If you’ve had at least 10 clients, you might want to think about throwing an inexpensive barbecue and invite all your past clients with the provision that they must bring at least one friend or family member for you to meet. To add even more incentive (though free food is usually enough incentive for me!) you may want to think about doing a raffle or something. Any of the guests of your clients can fill out their contact information and be put in a drawing to win a $50 gift card or some such thing. Do that and *poof*, instant real estate leads.

The fact is, real estate leads can be cultivated ANYWHERE. All it takes is telling someone what you do and handing them a business card. That right there is a potential real estate leads – of course, getting their contact information in return makes it all the better. Be creative when you’re thinking about how to increase your real estate leads – don’t do the same things over and over again, and try and be as innovative as possible. Just remember: real estate leads are EVERYWHERE – you just have to look.

With over 2 million real estate agents according to the National Association of Realtors (NAR), becoming a successful real estate agent takes more than just a license and a knowledge of current laws and regulations.The first year drop out range estimated to be from 40% to 80% demonstrates that many real estate agents are not as successful as they could be and research suggests that 90% give up after 3 years. The following 7 tips may help you avoid becoming one of these statistics.

First and Foremost YOU are a business. Real estate agents work for a broker, but are independent, commissioned sales people. This means that you are a small business and must run your practice as a business. Again, remember you are a small business owner. Embrace a Planning Attitude. If you don’t have a plan, then you are on some else’s plan – usually the successful real estate agent’s. During the last 10 years, what I have learned as a performance improvement consultant or coach is that most people place more value in planning a trip to the grocery store or a vacation than planning their lives either professionally or personally. Research Your Market Plan. Since you, as the real estate agent, are responsible for your own expenses, do your research specific to your marketing plan within your strategic plan. Time spent in constructing your marketing plan is definitely well spent. NOTE: Remember a business plan usually is data driven, while a strategic plan identifies who does what by when. Establish Sales Goals. Using your strategic action plan, establish sales goals. If you are new to this industry, it may take 6 months before the first sale. HINT: Use the W.H.Y. S.M.A.R.T. criteria for goal setting. Create a Financial Budget. Budgeting is critical given the up and down of this volatile market place. Your financial budget should plan for your marketing costs, any additional costs such as education and your forecasted income. Make Managing Yourself a Priority. Building a business is not easy. You must learn how to manage yourself especially in the area of time management, ongoing real estate business training coaching continuing education units, and personal life balance. Real estate is said to be a 24/7 business much like any small business. However, it is important not to lose sight of your personal life including family, friends, physical health, etc. Find a Mentor or a Real Estate Coach. Going it alone is not easy. Take the time to find a mentor who can help you steer through some of the known obstacles and help you during the “peaks and valleys.” If you have the resources, you may wish to hire a real estate coach or an executive coach who specializes in small business help and sales.

Being an incredible sales person and entering the real estate market does not guarantee similar sales success. However, these 7 tips may help you avoid many of the pitfalls by not being one of the four real estate agents who quit within one year or one of the nine who give up after 3 years.

A business plan is a written summary of your business idea including the product, people, equipment, financing, competition, sales and marketing, cash flow and operations that are required. You will want to prepare a business plan not only for your new venture but also for new products or business models. If you need financing for your venture you will need a Business Plan to present the plan to venture capitalist, investors or your bank. Even if you are self financing the venture you should prepare a business plan as if you were going to present it to your bank. There is no one easier to lie to than yourself and no one easier to fool.

There is no magic formula for a Business Plan although I always found when presenting a plan to a bank the heavier and longer it was the easier it was to get the banks approval. You plan should at a minimum include the following.

A detailed description of the product or line of products or services including target consumer and features and benefits of the product. A statement of qualifications and experience of the person or persons who will lead and manage the venture. A detailed plan of where and how the product will be manufactured or purchased. If it requires manufacturing where will you get the equipment, factory space, raw materials and skilled labor? If you are purchasing the product what are your supply lines? Do you have a purchasing agreement in place? How reliable is the source? Can you get alternate sources if necessary? A marketing plan that details you unique selling propositions, market area, method of reaching your customer such as advertising or online marketing. How will you attract the right sales people? If you are planning on using a marketing firm provide details. If you are out sourcing sales such as to a real estate agent if you are building homes include information on the individual or firm you intend to use. If they provide a marketing plan include that in your business plan. A cash flow plan detailing required cash resources and how long the cash will be required before the venture becomes cash positive. A statement of required resources not listed above such as licenses, permits, insurance, testing and research, office space and associated equipment and furniture. An organizational chart showing a plan for operating the business at inception and as it grows. A list of your key advisors; accountant, attorney, insurance professional Include a break even and profit analysis. How many units or dollars do you need to sell to break even and how many do you need to sell to provide a return to your investors? A bank will want to make sure they are going to get repaid. Investors will expect a return which well exceeds return they could get from safer investments such as saving accounts, money markets or bonds.

Even if you do not need to reach out to investors and a bank and are going to be self financed prepare a business plan and present it to a bank or group of investors who do not have fallen in love with the idea like you have. If you cannot convince them to provide funding then you likely need to reexamine the plan.

Friends and relatives are not a good audience as they will either be too easily swayed by your enthusiasm or afraid to tell you what they really think. I once had a relative who I looked up to all my life. He was buying a franchise when he retired and he showed me the business plan. When I looked at the return on investment and the work required to produce that income I thought “this plan will never work.” Because I had looked up to him so long I kept my opinion to myself. He spent almost ten years working too many hours trying to keep from losing his retirement savings. In the end only the long hours and a lot of resourcefulness helped him recoup his original investment.

Original Content copyright 2010 Thomas Robinson