Real Estate Investing – FSBOs vs. Agent Listings?

Many would-be real estate investing professionals face discouragement because of the assumption that acquisitions require deep-pockets. Some even believe the myth that nothing-down purchases are impossible.

The early 1980s era in real estate investing known as the Zero Down Real Estate Movement was initiated by Robert Allen with his best-seller, “Nothing Down.” After observing how commercial properties were acquired with no money down, Allen applied 50 techniques from the commercial real estate industry to the residential property marketplace. He was reportedly paid $1 million advance royalties for his publication, and began holding real estate investing conventions across the country.

The Nothing Down era was a startling eye-opener to the public. Very few were aware of Allen’s predecessors, like Nick Nickerson, Al Lowry and Mark Haroldsen who wrote books on real estate investing requiring no money. Allen popularized the notion, and it was a strong public draw for his real estate investing seminars.

However, some of Allen’s convention speakers were ultimately revealed as “con men,” and some bellied up. Robert Allen himself went bankrupt in 1996. The public generally concluded that Allen was probably a fraud, and that real estate investing was impossible without deep-pockets.

The Wall St.Journal got wind of the Nothing Down Real Estate Investing Movement, and interviewed many investors who were using “Zero Money Down” techniques. The business editor of the Wall St.Journal interviewed me repeatedly (and others who knew of my real estate investing), and featured me in an editorial as one of the most successful investors in the nation who had purchased millions of dollars in rental property without any money.

These previous unfolding events are pertinent to the conclusion of how to buy real estate properties with limited funds.

I proved that properties could be acquired without cash (or credit) to the tune of $10 million in real estate investments during my first 4 years. I used a $10 bill in the acquisition of many of my properties.

Purchases from FSBOs (For Sale By Owners) were possible through negotiations with motivated sellers. I bought millions of dollars in real estate properties without cash or credit by learning acquisition skills that required no money down.

On the other hand, real estate properties listed by real estate agents minimally require a down payment that covers the agent’s listing fee. These listed properties were no more valuable than the FSBO properties, but the agent fees demanded cash upon acquisition. In the intervening years since the 1980s, I have purchased some agent-listed properties, but my target acquisition continues to be FSBO real estate property from a motivated seller.

Real Estate Investing Requires Education

I really believe in getting an education in real estate investing, especially before launching a real estate investing career. I have been investing in real estate for 25 years, but I still spend thousands of dollars each year to learn more about real estate investing. To avoid unnecessary risks, you need to know as much as possible. If you make a wrong move in buying, managing or selling your property, you can lose everything, and your efforts will be flushed down the toilet. On the other hand, if you have what I call know-how savvy, you can weather almost any of the financial storms that will inevitably brew around your real estate investing venture.

Here are some of the critical essentials to make real estate investing pay off.

1.You’ve got to have a solid overview of the business.

You just can’t go out and start making offers – even if you have some money. I guarantee you’ll lose your money if this is your approach.

Don’t think that fixing up houses is a piece of cake. You’ve got to know what you’re doing.

2.You’ve got to have a good contract.

Picking up a crinkled ole contract document from your friendly real estate agent won’t cut it. Most contracts are NOT written to give you the slight edge as a real estate investing professional.

A good contract means the difference in walking away from a closing with money out of your pocket or in your pocket. I have taken home thousands and thousands of dollars from closings – up to $75,000 from my best closing on just a cheap little house. But a fistful of bills at closing is not your only reward for having a good contract. You can get your seller to take care of some or all of your closing costs if you have a good contract. And you can avoid some of the usual buyer costs if you have a good contract. Have a good BUYER’S contract as a real estate investing professional.

3.You’ve gotta have a good working model as a pattern for your fix-up project.

If you have never tackled the job of remodeling or even fixing up a house, you don’t have any idea what needs to be done and what should NOT be done.

Let me tell you from experience, you will be tempted to spend far more than necessary if you want the perfect house to sell. I know, because my wife is always suggesting what we need to do to our houses. Sometimes she is right, but often she wants to dress up a house with items that do not bring return on investment. It’s a very thin line of distinction.

You need a model for your fix-up project to establish a working formula.

Let’s face it. You can spend a bank full of money in fixing up a cheap little house. And it’s easy to over-spend with money you will never get back. But, on the other hand, if you don’t spend the right money on the right things, no one will buy your house. The margin of difference is close.

4.You have got to put on the hat of salesman when you get into this real estate investing business.

Your remodeled house will not sell itself. You have to polish to a spit-shine, and make the finished appearance of your house come off as the most desirable house in the neighborhood.

Don’t fix up a cheap little house if you are unwilling to show it and sell it. You will lose a big chunk of your profit if you have to list it with a real estate agent.

It’s O.K. to sell your makeover house through a real estate agent if you feel deficient as a salesman. But it is important to see your house AS a salesman in order to do your best job.

The key to success in real estate investing is in knowing what you are doing when you sell.

5.Real estate investing is a business.

Real estate investing is not a hobby and it’s not a game. It is, however, a slam-dunk, dead-serious, rock-solid way of making money when you learn the ropes. And it just may be the easiest way you have ever earned a living.

But you have to know what you’re doing.

You can make money investing in real estate,but you must learn how to do it right. http://CashinHouses.com/

Boston Real Estate – Choosing the Right Boston Real Estate Agent

As a successful Boston real estate agent, it always puzzled me how and why some people choose particular Boston real estate agents to sell their homes. For most of us, a real estate purchase is the single largest investment we will ever make in our lives. Still, when it comes time to capitalize on this investment many home sellers are much too casual and have very low standards for the person they choose to handle the sale of their property.

I can cite many examples of poor decision making when it comes to home-sellers choosing a real estate agent, but there is one example from my experience that really boggled my mind.

I received a call from a woman about six months ago who asked me to do a Comparable Market Analysis (CMA) of her Boston Condo. (I gladly obliged and confirmed a time to meet with her and to tour her property.) The CMA process typically entails an initial tour of the subject property, comprehensive market research to produce a report, and an in-depth, in-person listing presentation. After meeting the client, viewing the property, doing the necessary research and presenting my report, I was certain that this woman would list her property with me. She disclosed to me that she had interviewed five other Boston realtors and that she was “by far” most impressed with my presentation and me. She cited my track record selling Boston real estate and Boston condos, my knowledge of the Boston real estate market, and my professionalism as the reasons she viewed me as the most qualified real estate agent to sell her home. She also disclosed to me that my service charge was identical to the five other agents she interviewed so “price” wasn’t an objection I would have to overcome.

After giving her forty-eight hours to review her options (I of course sent her a thank you card for considering my services), I followed up with a phone call to see if she had any outstanding questions. To my surprise she told me that she had decided to list her property with a friend, who is also her hairdresser, and sells real estate part-time in a suburb of Boston. My initial shock came from the fact that she decided to list her property with an out-of-town broker, someone who had very little knowledge of the Boston real estate market. But what really blew me away was her decision to list her property with a friend, who not only had very little total real estate experience, but who works part-time in real estate and had never sold a property before! Her exact words were: “She is a very nice person and I would like to help her jumpstart her real estate career.”

At this point she had already made her decision and the last thing I was going to do was to disqualify her friend as a competent real estate agent, so I wished her the best of luck and told her that I would try my best to cooperate with her friend to sell the unit. She thanked me and recognized my professionalism. What I really wanted to ask her was this: If I told you that you had $150,000 to invest, (which is approximately what she stood to profit from the sale of her home), and your friend, who is also your hairdresser, called you and told you that she just started selling stocks part-time and she wanted you to invest your money with her, would you do it?

Fortunately, most of the people I have actually posed this question to have thought about it and answered no. Unfortunately, there are too many people who do not think about their real estate investment in these terms and are essentially answering yes! For some unknown reason many people are much too casual when it comes time to sell their real estate investment, when if fact, most people look to the equity they have in their homes to pay for important things like major home improvements and educational expenses while they own their home.

It turns out, the woman I used in the example above ended up calling me in a panic after her property sat on the market for six months, overpriced by almost 10%. She had to sell the property within 60 days of calling me as she had been carrying two mortgages for four months and was running out of money. I ended up selling the property three weeks later for a reduced price because the property had become “stale” in the eyes of buyers in the market and she had very little bargaining power when it came to negotiating price.

You must have high expectations when choosing your Boston real estate agent and must truly think of your real estate investment as the largest single investment you will ever make in your life. The following is a list of 25 questions that you must ask all of the realtors you interview before choosing one to sell your Boston home:

1. Are you a licensed sales person/broker in the state of Massachusetts?

2. Do you have a licensed broker in your office?

3. How long have you been selling real estate?

4. Do you strictly work as a seller’s agent?

5. Do you have buyer’s agents working in your office?

6. Will you offer compensation to sub-agents, buyer agents, or facilitators, or all?

7. What is my liability if you offer compensation to and welcome sub-agents and he or she misrepresents my property?

8. Will you ever allow a buyer or another agent to enter my home without you being present?

9. Is selling real estate your full-time job?

10. How much real estate have you sold in my neighborhood in the past year?

11. Can you provide 5 references of people you have sold for in the last year?

12. How many listings do you currently have under contract?

13. What is the “average days on market” for all of your listings over the past year?

14. What is the average ratio of asking price to sales price for the last 10 properties you have listed?

15. What differentiates you and your company from your competition?

16. How will you arrive at an appropriate suggested asking price for my home?

17. How and where will you market my property?

18. What is your service fee?

19. What services are included in your fee?

20. What is the length of your listing contract?

21. Is your contract an exclusive listing contract?

22. Are your real estate forms in compliance with the laws in Massachusetts?

23. What professional real estate organizations do you and your company belong to?

24. What is the state of the Boston real estate market? Is this a good time to sell?

25. What properties would I be directly competing with if I put my property on the market today?

Donald Trump on Real Estate

I love what Trump says about the business of real estate.

I am a big believer in setting up business systems for all
my clients. So it is cool to hear from a master like Trump
about the importance of systems!

Sincerely,

Tom Kish

THE REAL ESTATE BUBBLE OF 2005?

‘What Donald Trump has to say about the latest business
opportunities found in Real Estate Investing.’

By Phyllis N. Schwartz

Staff Writer

Have you ever wanted to become a millionaire?

If so – and, if you live in the United States, there is now a
very REAL chance for you to enjoy the same opportunities
as Donald Trump.

You don’t need to invest in real estate to be wealthy. But, by
and large it is the easiest, most leveraged way to build real,
sustainable wealth. With mortgage rates at an all time low and
tax laws favoring real estate holdings, now is an ideal time to
profit from the greatest real estate gold rush in history.

Marriage, job changes, divorce, new families, death — the
average American moves every five to six years. And with that
constant stream of movement across the United States, more
than 12 million homes are bought and sold every year. Many of
these will be great deals that you, yourself, could be profiting
from.

The very same principles that make Donald Trump a fortune
with New York City skyscrapers will work for the average
investor, no matter what size the property.

So precisely what can the small real estate investor learn from a billionaire wheeler- dealer like Donald Trump? According to George Ross, Executive Vice President and Senior Counsel for the Trump Organization (and, of course, Apprentice co-star), one of the cornerstones of Trump’s philosophy is “Improve any location.”

And that’s just what Trump did in his very first real estate deal on a foreclosure of a 1,200 unit apartment complex in Cincinnati, Ohio. Without a penny invested, Donald and his father, Fred, were able to turn the apartment complex around by doing some remodeling and taking a tough stance on rent collection.

In the single most valuable lesson in Donald Trump’s real estate career, he learned how the government would assist buyers in purchasing property with little or no financial backing and how to get such aid. His passion for real estate grew from there and he went on to create the strategies and systems that turned his business into an empire.

“Deals are my art form. Other people paint beautifully on canvas or write wonderful poetry. I like making deals, preferably big deals. That’s how I get my kicks.”

In New York City, the Trump signature is now synonymous with
the renowned Trump Tower, The Trump International Hotel &
Tower, The Trump Park Avenue and the Trump Building at 40 Wall Street. He also owns golf courses in 4 states, and current projects include the building of the biggest development ever approved by the NYC Planning Commission .

Ranked #228 on Fortune Magazine’s list of the world’s billionaires, Trump stated: “Real estate is at the core of almost every business, and it’s certainly at the core of most people’s wealth. In order to build your wealth and improve your business smarts, you need to know about real estate.”

The most obvious problem that confronts many would-be investors
is lack of know-how and/or financial resources. Common sense
would dictate that wanting to make money in real estate is simply not enough. Knowing how to get it is the real key to success. Like any other profitable business, it takes a proven business system.

In Trump: The Art Of The Deal, ‘The Donald’ gives his own assessment: “If you take care of the downside, the upside will
take care of itself. In other words, if you have a contingency
plan for everything that can go wrong, you can’t help but succeed.”

So how does the average Joe or Jane actually succeed in real estate?

Because you can’t know it all, no matter how smart, educated or experienced, there is no way to acquire all the wisdom you need to make your business flourish. It’s precisely why 95% of franchises succeed and only 25-35% of independent businesses fail. Wanting to make money in real estate is simply not enough.

Just as Donald Trump had starting out, you need a great mentor
with a proven track record to lead the way and support your
efforts… also a proven business system that allows you to invest in all types of real estate without ever having to tie up all your own cash. It is wise to begin your journey using the research, experience and wisdom of those who have been there before you.

The beauty of a franchise is that it provides a proven business
model with years of experience behind it. As far afield as real
estate investing may be from starting a McDonalds, the principle is the same. If you can find a real estate investment teaching program that eliminates much of the trial and error and allows you to get a quick start with a proven system, you’ve just found your own golden arches.

True success is bigger than any one person, no matter how well educated or experienced that person may be. There is no reason
to settle for anything less. Once again, to quote the king of real estate: “If you’re going to be thinking anything, you might as well think big.” Sound advice to anyone who wants to become a millionaire.

p.s. Don’t forget to check out my one of a kind business system for real estate investing.

I am the only expert teaching you how to use business lines of
credit to invest in real estate instead of cash!