Real Estate

Real Estate

You’ve probably seen the “rags to riches” success stories of people who’ve found real estate and turned into multi-millionaires. Ron LeGrand was a dead-broke, 35-year old automechanic – who discovered real estate at a local seminar. He immediately made $3,000 in his first 3 weeks of using the real estate investing methods he discovered – and quit his job. Today, he teaches his real estate methods all across the United States.

Carlton Sheets, fired from his job, turned to real estate investing as well. He not only created a personal fortune with real estate, he also went on to create one of the best-selling real estate courses on TV, No Money Down. Today, the infomercial selling his real estate course has been running for 20 years! And he shows no signs of slowing down. 

Real estate investing is an exciting field for a number of reasons. First, it’s all around you. Wherever you live- whether it’s in a house, condo, duplex, or apartment – is real estate that someone owns. Second, the profits from buying and selling real estate can be quite large. I’ve heard many, many success stories from real estate investors pocketing $100,000 to $500,000 or more on different deals. Even people with little experience and no money have found ways to pocket $5,000 to $20,000 on real estate deals. And finally, TV, radio, magazines, and the Internet constantly feature success stories of real estate investors. People like Donald Trump only fuel the dreams of people who want to quit their jobs and become mega-rich in real estate. So it’s no wonder that there’s a huge interest in real estate investing and a large number of experts and seminar companies willing to fill this demand with books, courses, workshops, and coaching programs. In my own area free real estate seminars come through almost monthly.

And next month, a huge real estate expo will be held with some of the world’s best known real estate investors giving keynote speeches. There seems to be no end in sight for the demand for real estate investing information.

Real Estate Secret #1:
Understand that the “Success Stories” you see on TV are the “best-case scenario”.
If you’ve seen an infomercial selling a course on “How to Get Rich with Real Estate”, the entire 30-minutes is filled with success stories from happy people beaming about their success in real estate while holding up big checks. During a 30-minute infomercial you might see 10 people with “success stories” – all pleased-as-punch to have gotten rich in real estate. Please understand that for every 1 person that makes it rich in real estate, there are 100... 1,000... maybe even 10,000 people or more who got the exact same course, the exact same information, and never made a dime.

Now, to be fair, that’s not always the fault of the real estate information being sold. Often when someone gets a real estate course and the truth sinks in (translation: It’s much more difficult than you think – and you’ll have to spend a lot of time and energy finding and making deals), they’ll set the course aside to “get back to later”. Sometimes the “fear” of having to talk to people and investing some of their own money to make deals work is enough to keep people from taking action.

You must understand that the “Success Stories” are from people who did the work. I’ll go over this again a little later, but remember that these testimonials are from people whom actually TOOK ACTION. When you see their smiling faces as they hold up a check, understand that you’re seeing the end result. They’re not showing you the amount of time it took them to learn the system. They’re not showing you the mistakes and frustration. They’re not showing you the problems and challenges they faced. They’re showing you the best-case scenario and hoping you’ll believe it’s just that fast and easy. (By the way, this is a good lesson to understand about everything you see. Most ads show you the POSITIVE OUTCOME you want, not the effort and energy it took to get to that outcome.)

Real Estate Secret #2:
You will need a basic knowledge of Real Estate.The more you have the better. You cannot jump into real estate and become a millionaire without having a basic understanding of real estate concepts. Successful real estate investors have their own language and terminology that most people don’t use and wouldn’t understand. To be successful as a real estate investor, you must learn and fully understand the most common real estate terms. Fortunately, most real estate courses include a glossary of terms. However, before you even invest in a high-dollar real estate course you may want to go to your local library or bookstore and pick up a book on the fundamentals of real estate. You’ll build a strong foundation for future real estate investing and be able to understand many more expensive real estate courses you may choose to invest in later. If there are local continuing education classes on real estate investing, you may also want to invest a little time and energy taking a beginner’s class like Real Estate 101. You’ll quickly understand the basics and be ready for the more advanced information you’ll learn from the real estate experts.

IMPORTANT NOTE: You do NOT have to be a realtor to invest in real estate. If you already have your realtor’s license or want to get it, you’ll be slightly ahead of any beginners without that training. However, many, many very successful real estate investors have never taken the necessary classes to become a realtor.
They’ve picked up everything they needed to know from books, courses, seminars, and life experience.

Real Estate Secret #3:
There are many, MANY ways to make money with real estate.
These include flipping, wholesaling, apartments, commercial property, etc. Before you start investing in real estate, you’ll want to investigate each of these types of investing methods and choose the area that appeals to you the most. Because real estate investing IS a business, you’ll find very quickly that it does take time and effort to get started. I was interviewing a very successful real estate investor recently and he mentioned that he put 40,000 miles on his car in one year just by driving around town looking for homes in which to invest. He’s a very successful real estate investor, but he’s only successful because he puts in the time and energy
necessary to succeed.

Because it is a business, you need to find the RIGHT real estate investments for you. For example, you might love buying run-down homes, fixing them up yourself, and re-selling them for a hefty profit (known as “flipping”). If that’s something you love, you’ll find yourself more successful doing that rather than buying and managing apartment buildings. On the other hand, if you HATE the idea of renovating homes but like the idea of creating positive cash flow with apartment buildings, it makes no sense to try to “flip” homes. There are so many ways to make money with real estate that you should do your research, find an area of real estate that really gets your blood pumping, and focus your energy in that area. You’ll discover that during the learning curve, or whenever challenges arise, your passion for your real estate business will keep you from wanting to quit.

Real Estate Secret #4:
Learn FIRST... But Don’t Learn Forever!
While real estate investing is exciting, it can also be intimidating. You’re entering a field where you’ll be making deals for tens of thousands, hundreds of thousands, and, in some cases, even millions of dollars. You’ll be dealing with tenants and management companies. You’ll be dealing with mortgage companies and banks. You can, of course, minimize your risk. And many real estate experts can show you exactly how to get started in real estate with very little or no money and start seeing profits and cash flow. It’s easy to be overwhelmed and to let this feeling keep you from moving past the “learning” stage into the “doing” stage.

Recently I was on a teleconference with David Lindahl, an expert in buying and selling apartment houses. During the call, I mentioned that many people are intimidated when it comes to getting into real estate. I asked him how people can get past their fear and become successful using his methods. The answer he gave me was right on the money. He said that to get through fear you need “education and experience”. You need to have the confidence that comes from understanding what you’re doing. You need to learn the in’s and out’s of the area of real estate in which you’re investing. You need to learn from the mistakes of others before you go out and try your hand at real estate.

BUT education itself will never be enough to make you wealthy in real estate. You MUST get started at some point (even if it’s a small first step) and take action. There are many people who have read many books on real estate and attended a multitude of real estate seminars who may consider themselves experts, but they’ve never been able to bring themselves to purchase their first piece of property. You can get caught up in getting too much education and never get started. The key is to strike a balance between the two. You need enough education so that you can confidently get started and take the right action. And, as you take action, you’ll discover that you are completely capable of making money in real estate.

Real Estate Secret #5:
Be prepared to work!Yes, it’s exciting to see “Success Stories” of real people all around the country getting rich with real estate. They trot these success stories out on TV and at real estate “seminars” that travel from city to city. However, these people (and the experts themselves) had to put in a lot of time and energy to get the checks they’re flashing. 

When I received Carlton Sheets’ “No Money Down” Real Estate Course (which I bought from his infomercial), I immediately popped in the video that shows Carlton going through the newspaper, looking for deals, and making calls to prospective home sellers. From the infomercial I suspected that he’d make one or two calls, find a deal, make a deal, and, within the short video, have generated another $25,000 to $50,000. After all, that’s the basic idea I got from the infomercial. “Get your local paper, make a few calls, find a deal, and cash in fast!” Well, by the time I finally got tired and turned off the video Carlton still hadn’t found anyone in his local paper with whom to do a deal. People weren’t home. Their homes didn’t meet his criteria. And he just kept dialing and dialing and dialing. “Wow,” I thought. “Real estate investing is just like anything else. It’s WORK!”

And that’s what I hope you take from this. Real estate investing is WORK. You will spend a lot of time calling people and, at times, not finding one property on which to do a deal. You will spend time in your car looking at homes. You may put thousands of extra miles on your car as you wheel around town. And you may have to analyze dozens, even hundreds, of homes before you find ONE property on which to make a deal.

Don’t get me wrong. I’m very, very gung-ho about the financial potential of real estate. I know that it’s an incredibly lucrative method of building wealth. However, it’s often pitched as a seemingly “overnight” way to make a ton of money. It’s important that you understand that once you get started, you will spend a good amount of time hunting down deals and doing a lot of legwork before finding something that will make you money. (Of course, you could make a deal with the first person you contact, but I wouldn’t bank on it.) Just go into your real estate business with both eyes open. Understand that, just like ANYTHING that has the potential to make you wealthy, you will end up putting in time and energy to make it successful.
 

Real Estate Secret #6:
All real estate experts were beginners at one time!
No one was born a real estate expert. Ron LeGrand was a 35-year old, dead-broke auto mechanic when he went to a real estate seminar and stumbled onto the “breakthrough” that would change his life. Today, he’s a multi-millionaire real estate investor who teaches his real estate investing methods to people from all over the world. Today’s real estate experts, Carlton Sheets... Robert Allen... Russ Whitney... Louis Brown... Wright Thurston... even Donald Trump... all started with NO BACKGROUND or EXPERIENCE buying or selling real estate. They ALL had to learn it from scratch. They ALL made mistakes. They ALL had challenges and frustrations. But they ALL stuck with it and made money in real estate. Some millions. Some, like Mr. Trump, made billions. Knowing this, you should feel comfortable and confident to dip your own toe into the real estate investing “pool”, get some education, start at whatever level you feel personally comfortable starting at, and move in a positive direction. Soon, you can be making good money in real estate.
 

Real Estate Secret #7:
Beware the “Sample and Sell” Trick.
One last “secret” before I move on. Even though I’ve mentioned quite a few names of real estate “gurus”, I want you to understand that that’s not an endorsement of any individual expert. I’ve only given their names because you might have seen them or purchased something from them. Some of the shadier real estate experts use a trick I like to call “Sample and Sell”. Here’s how it works: The real estate expert gives you just enough information to get you excited about investing in real estate. To really make money, he says, you need to buy my course. Fair enough, right? Unfortunately, the $500 course you bought only gives you 75% of the information you need to successfully invest in real estate. The expert returns with a new offer, promising you even MORE INFORMATION (the secrets left out previously)at a $2,500 seminar. You’re a serious real estate soon-to-be investor, so you spend $2,500, attend the seminar, but only come away with 85% of the information you need. Once again, the expert returns and says that what you really need is to come to the NEXT SEMINAR or maybe buy LIVE COACHING for $5,000. And the cycle never stops. You’re fed portions of the overall real estate investing strategies but never the entire deal.

Why keep some of this information from you? The real estate expert believes that if they give you everything you need to know to be successful, they can’t get another dime out of you for books, courses, seminars, or coaching. So they’re constantly holding a little back to give you next time in the next product.

That is NOT what all real estate experts do. Many real estate experts work hard to give you everything you need to know to be successful. They simply work at presenting their information in different ways, since some people prefer courses and manuals, while other people need seminars and coaching.

However, be aware that some real estate experts will hold back just enough to keep you coming back for more. If you find that the expert you’re dealing with is doing this to you, get off of that treadmill and find a better expert. It’s very, very important that you do research on whatever expert with whom you decide to work. There are some great real estate experts who give you more for your money. There are also experts who are only interested in how much money they can suck out of you. A good source for information is the Internet. Check a lot of different sources to get reviews of various real estate experts.

IMPORTANT NOTE: You may see real estate “workshops” advertised in your area – “for free”. In many instances, these workshops are designed to get the attendee excited about real estate – and sell a $3,000 to $5,000 “advanced” seminar or course. I attended a 3-hour real estate workshop last month as research for this book, and while the speaker was pleasant, his entire speech was light on information – and heavy on sales pitch. At the end of his talk, he promoted an advanced seminar for $3,000. Later on, in doing some research on the Internet, I read negative feedback and comments concerning this well-known expert’s system. However, 15 to 20 people at the workshop signed up. So be careful when attending these supposedly “free” events.

7 Myths About Real Estate Investing That Are Costing You Tens Of Thousands Of Dollars Written by Alex Nghiem

Did you know real estate investing has created more millionaires that ALL other industries combined? The question, then, is why are more people not invested in real estate? Even with the increased awareness in real estate investing, more people are still familiar with other forms of investing such as stocks and mutual funds. In this article, I will discuss 7 myths that about real estate investing that are costing you tens of thousands (maybe hundreds of thousands of dollars). These myths persist because most people invest in real estate using conventional financing, which often requires 5% or more as a down payment. Assuming that $150,000 is average price of a house in your area (in most cities, it's significantly more than that), you would need $7,500 as a down payment (and this doesn't even include other fees such as closing costs). The purpose of this article is to share techniques of creative real estate investing that debunk these common myths about real estate investing. 

Myth #1:
To create wealth, you have to invest in stocks and mutual funds.
Fact: Real estate investing has created more millionaires than ALL other industries combined including Internet marketing, stock investing and mutual fund investing. In fact, according to the CEO of FNMA (Federal National Mortgage Association), in the hottest bull market in history, more people ended up creating wealth through home ownership than through stock ownership.

Myth #2:
Real estate investing requires a lot of money.
Fact: Once you learn how to buy undervalued properties, you can find all types of people who will lend you their cash. You can find these people at your local real estate investor association or by contacting us. Additionally, you can use an option (typically $10 to $100 for the option fee) to control the property and not even need to raise any capital.

Myth #3:
Real estate investing requires good credit.
Fact: This is related to Myth #1. Again, once you learn how to find undervalued properties, you can find all types of people who will lend you their credit, especially if the property has significant equity. Additionally, you can also use an option to control the property and this technique doesn't require that you have good credit.

Myth #4:
Real estate investing requires you to do major rehabs in dangerous neighborhoods.
Fact: While you can indeed make good money doing rehabbing, you can make even more money working with "pretty houses", houses in suburban areas that need little renovation. In actuality, you can make $20,000 or more per $100,000 of property (thus, in a high-priced market such as Florida, the average profit would be $40,000 or more per property).

Myth #5:
Real estate investing requires dealing with tenants, repairs or house payments.
Fact: Again, while you can do that, you can also make money in real estate investing without ever having to deal with tenants, repairs or house payments through the use of options. One of our clients recently made $9,800 in 4 days on his last option deal.

Myth #6:
You can only make money in hot markets.
Fact: You may believe that you can only make money by investing in hot markets such as Las Vegas and Florida. The reality is that once you learn how to buy undervalued properties, you can make money regardless of what the local or national market is doing.

Myth #7:
You have to take huge risks when investing in real estate.
Fact: You actually have more control when buying real estate than when you buy stocks and bonds. You can determine the value of the house by using the multiple listing service (MLS) and commercial databases and as long as you can buy the properties under value, you have a significant safety margin.

These myths about real estate investing are probably preventing you from real estate investing and therefore costing you tens of thousands of dollars. By using options and other forms of creative real estate investing, you can overcome these myths and make money in real estate investing without dealing with tenants, repairs and holding costs or needing a lot of cash or good credit.