For those out there that are starting with next to nothing, I want to say that you can do it, the question is, are you willing to change yourself enough.
The best people at this will tell you, that it is as much about being, is it is about doing.
You have to think different than you ever have before. Many times you will need to think just the opposite than you do today.
You have to think different from most everyone that you know. You have to resist their dooms day comments. They will put more effort in to stopping you from trying, than they would in trying to succeed themselves.
Rich Dad’s cash flow quadrant will help you understand why you need to change your thinking from your past way of thinking.
Can you make deals on real estate with poor credit and limited funds, of course. It will be like digging a basement with a shovel, it just takes longer to get where you are going.
No matter where you are starting from, YOU HAVE TO MAKE OFFERS.
Many, many, many offers.
If you are not making offers, you are not buying property right. You are only buying what others are selling you.
Make the offers suite your needs and abilities.
We all know guys that would ask every woman they meet for a kiss. They get rejected a lot, but they will get a kiss every once in awhile, and so will you.
It is not important to get every deal and you should walk from most.
What is important is that what you do buy, you buy right, with terms that you CAN handle.
If a realtor tells you that your offer is ridiculous and that he will not submit.
Submit it yourself.
Do not let others beliefs stand in your way.
Everyone of you should keep improving your financial picture.
- Financial statement - start one now. It may be limited at first, but you have to gage your performance, how else will you know if you are moving up?
To just own some houses is not enough.
- Credit report - You can use a service like truecredit.com to pull your own credit, learn how to read it, for these two items make up your financial picture. There are ways to improve them both. Also, True Credit has a service that emails you when any changes, like inquiries or new accounts are posted to your credit report.
Know what it says at all time and know who is pulling your credit.
Do not approach real estate as a get rich quick scheme. It likely will be quicker than most anything else you could do, but you are going to spend years, fine tuning yourself, your skills and your financial picture.
If the thought of work bothers you, walk away now.
Most people think that I do not do anything, yet I keep myself very busy and this is where many will fail.
Who is going to make you get out there and work it? Who is going to fire you, if you don’t? Who is going to pick you up when you are down?
It has to be you. It is about you and your life. You must apply yourself everyday.
Self-employed = Boss/employee
You are your own employee and as the boss you must be demanding of your employee. Demand results.
As the boss you have many hats to wear and must be demanding of yourself or your employee will not have a place to work.
You are the CEO of your life. How are you doing at the job? If someone else was the CEO, would you be happy with the results that you have gotten?
Keep it honest. Honesty brings repeat business. Karma is real.
Use some imagination and write down where you want to be in 1/5 and 10 years. You must have a destination before you can know which turns to make along the way.
Set your goals high.
Each decision that you make, needs to get you closer to your goal.
At some point you may want to quit your job and do this full time, but not now. You will need to have verifiable income to qualify for your financing. If you got started today, you would need two good tax returns before you could quit your job.
Even if you are making good money at your current job. You will need to have replaced that income with 2 years of real estate income.
You must show income on these returns, don’t let the fear of taxes limit your abilities.
Pay those credit cards off, even if you have to work overtime or sell a bunch of your junk. They rob you of available monthly funds and cost you points on your credit scores.
About this whole market up / market down thing, it does not matter which it is, you can make money in both. Make offers.
I like making offers when a hurricane is just a few days away, some sellers become afraid. Common sense will tell you which properties will not likely have any damages and so what if it does, the seller will have to fix it before I close and I’m not responsible until I close.
I have bought a lot of foreclosures, pre-foreclosures and from others that had to sell. They may have been angry during the negotiations, but everyone of them thanked me at closing.
I had set them free. Maybe it would have been better, if they were free and had money, but they were free all the same.
Freedom is not free.
*Buy when others are selling and sell when others are buying.
*Get most of your gain when you buy and you will be able to handle some downturn.
*Know your value before you make an offer, work from value backwards.
*Appraisers are not always right, know your market. You may need to order a second appraisal.
*Bankers and loan officers do not know as much about money as you would think.
*Experience is something you don’t get, until just after you need it.
*If you want the rainbow, you’ve got to put up with the rain.
*Fortune favors the prepared mind.
*If everything seems to be going well, you have obviously overlooked something.
*In life, you do not get what you deserve. You get what you negotiate.
The early bird may get the worm, but it is the second mouse, that gets the cheese.
This is more important, if you collect bubbles.
If a market reset will kill you, you paid to much to start with. Work those offers.
Many times a seller will call back 30/60/90 days, after my last offer and ask if I am still willing.
This can be your biggest problem.
Evaluate your tenants like your banker does you.
His objective is to be repaid and to make money, your past performance is one indicator as the whether or not you will repay him. Another is your ability to pay (do you have enough available money to meet your obligation).
Make your prospective tenant prove who he is.
A lease from a dead beat is worse than no lease at all.
Look at where he is moving from, the way that he treated that house is the way that he will treat yours.
Look in his car, look at his wheels, is he clean.
People are who they are and will do what they have done.
Either he will pay your mortgage or you will pay his rent.
If rent is due on the 1st of the month and is not received, send an eviction letter on the second, do not waste time. Tenants will test to see how tolerant you will be. If money gets tight someone is not going to get paid on time, don’t let it be you.
If oil is limited, the squeaky wheel will get oiled first.
Good qualified tenants are also potential home buyers.
Bankers and mortgage brokers:
They are not created equally. Only deal with the proven ones. Find other people that are really getting what you want and ask them who they are really getting it from. When you find a good one, let him make some money. Either, off of you or by you sending him more business.
Do you have a team?
Realtor, banker, broker, closing attorney, appraiser, repairman, contractor, real estate attorney, legal attorney, accountant, etc.
Do not wait until you need one before you start looking. Who are the best, using. Go and introduce yourself. Send them some business. After all they are now on your team. If you are out talking the talk, like you should be, you will be meeting people that are potential customers for your team members.
If you are not willing to promote your team members, why should they promote you.
I want everyone on my team to make money when they deal with me.
If they can buy one, they may be able to buy two.
Well that should be enough food for thought for now.