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Part 4: Quick-Start Guide to Investing – Exit Strategies and Mastering Your Craft

Post It Note to Improve Skill

We’ve been outlining the 8 Steps you need to take as a beginner to get your real estate investing business off to the quickest start possible:

  1. Understanding Real Estate Cycles
  2. Identifying the Key Indicators in Your Market
  3. Building Your Power Team
  4. Making Offers
  5. Finding Financing Sources for Your Deals
  6. Implementing Finding Strategies
  7. Understanding Exit Strategies
  8. Constantly Learning and Mastering Your Craft

In this final installment, we’ll be looking at Steps 7 and 8.

Step 7 – Understanding Exit Strategies

To effectively get started in the investing business, you must understand exit strategies and how to use them to get into and out of deals profitably.

Every property that you encounter is a different situation. Each one has a different need, a different financing challenge and one or more appropriate exit strategies. The more exit strategies you know and master, the greater your chances of success as an investor!

For starters, make sure that you have a sound understanding of wholesaling, lease options, seller financing, rental properties, and rehabbing. These exit strategies will provide you with a solid foundation to be able to put together deals that are profitable for you and helpful for sellers. (Rich Dad Education’s Elite Training courses are designed to give you detailed instruction in each of these areas.)

Step 8 – Constantly Learning and Mastering Your Craft

Like most things in life, learning is a journey and not a destination. Truly savvy investors realize that they must remain in constant search of new ideas and information if they want to stay one step ahead of their competition.

Rich Dad Education offers classes, a Mentor Program, and personal coaching that are designed to help you realize your full potential as an investor and entrepreneur. We also encourage you to utilize many of the resources you have, from your local library to the Internet, to stay up-to-date on current market conditions and strategies.

As you continue on your path to financial freedom, get help as you need it.

By Mark Justice

Rich Dad® Education Elite Training Mentor

Quick-Start Guide to Investing – Part 3: Finding Financing and Strategies

Toy house placed on money

Getting a real estate business started can be overwhelming for a brand-new investor. Rather than getting caught up in all the details that cause people to be overwhelmed, we are breaking it down into 8 basic steps:

  1. Understanding Real Estate Cycles
  2. Identifying the Key Indicators in Your Market
  3. Building Your Power Team
  4. Making Offers
  5. Finding Financing Sources for Your Deals
  6. Implementing Finding Strategies
  7. Understanding Exit Strategies
  8. Constantly Learning and Mastering Your Craft

Today, we’ll be covering Steps 5 and 6.

Step 5 – Finding Financing Sources for Your Deals

 This is the step many new investors fear. The truth is if you have done your homework and secured a good deal, financing is usually the easier part of this business. People with money will always come forward if the deal is right.

Don’t get caught in the trap of focusing only on one approach. Once you have an offer accepted on a property (or even before it is accepted), take a four-step approach to getting the money for the deal:

  1. Traditional Loans
  2. Hard Money Loans
  3. Wholesaling
  4. Finding a Partner

If you pursue all four methods on every one of your first deals, the money should be there.

Remember, you can’t have too many sources for financing. Start now and find these sources as outlined in our training courses.

Step 6 – Implementing Finding Strategies

To sustain a growing real estate investment business, you must have a constant stream of potential properties.

A real estate agent can be one way of finding properties. However, it’s not the only way. Some popular finding strategies include:

  • Marketing and Advertising
  • Foreclosure Properties
  • Probate Properties
  • Getting Deals from Wholesalers

Many investors have a marketing budget and use that money to advertise. Done properly, this gets sellers calling them about buying their property. The more phone calls you get, the easier your life will be as an investor. Usually, the most motivated sellers will call you because they need a fast solution to their housing problems.

Foreclosures can be a constant source of finding deals. Keep in mind, foreclosures are more of a finding strategy than an investment technique. Why? Because foreclosure properties can be rentals, lease options, wholesale deals, etc.

Probate properties can also be a great way of finding investments. In many cases, the home must be sold to help pay the estate’s creditors. As a result, you can find some very motivated sellers that have probate properties.

To create that constant source of potential deals, determine what is going to work best for your situation, needs and goals as an investor.

Only two more steps to go! Next time, we’ll finish up with Step 7 and 8.

By Mark Justice

Rich Dad® Education Elite Training Mentor

Quick Start Guide to Investing – Part 2: Power Team and Making Offers

 

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There are 8 steps beginning investors should take to get their real estate investing activities off to a quick start with a minimum of heartache:

      1. Understanding Real Estate Cycles
      2. Identifying the Key Indicators in Your Market
      3. Building Your Power Team
      4. Making Offers
      5. Finding Financing Sources for Your Deals
      6. Implementing Finding Strategies
      7. Understanding Exit Strategies
      8. Constantly Learning and Mastering Your Craft

 

Last time, we talked about the first two. Today, we’ll be discussing Steps 3 and 4.

 Step 3 – Building Your Power Team

Real estate is not a business where you can achieve success all by yourself. You are going to need to have a team that can help you with various aspects of the process.

At a minimum, you are going to need a real estate agent, a lender, and a title company or real estate attorney. These people can help you take a deal from start to finish and so it is important to have them in place as soon as possible. This is a huge key to getting started.

When you have a great real estate agent, they can save you time by only bringing you properties that fit the type(s) you’re looking for.

A good lender will be able to get you into deals that you wouldn’t have thought possible. It may take awhile to find the right lender; but when you do, the returns that they can give you can be exponential.

There are other people that you can add to your power team as your career progresses. This would include people like accountants, attorneys, contractors, property managers, inspectors etc. The important thing to keep in mind is that team building is a constant activity.

Step 4 – Making Offers

Another key step in getting started quickly is to actually make offers. This is one of the biggest items that set apart successful investors from the rest of the group.

During our Rich Dad Education trainings, we instruct you on the proper way to make offers. Follow those guidelines because they are designed to protect you as you make offers. You want to put yourself in a position where you have everything to gain and very little to lose.

By Mark Justice

Rich Dad® Education Elite Training Mentor

Mobile Home Investing 101: The Forgotten but Profitable Investment

Rich Dad Education Real Estate

Mobile home investing typically happens one of two ways. You invest in mobile homes attached to your own land, OR you invest in mobile homes that are on someone else’s land (typically the land rented in someone else’s mobile home park).  Today, let’s talk about mobile homes located on rented land.

First of all, there are no closing costs. In many states, owning a mobile home is very similar to owning a car or a truck.   For us as investors, that can mean no title insurance, no real estate taxes or insurance prorations, no fees, no surveys, and no doc stamps or other costs that typically come with home ownership.

Mobile homes located on rented land, such as mobile home parks, do not close at a title company or attorney’s office.  You can close “traditionally.” I even encourage that in some cases, but you can save those dollars once you understand the process for your area.   As I mentioned, mobile homes in parks are considered “personal property;” and for that reason, it may be as simple as buying or selling an automobile, boat or lawnmower.

The second reason to invest in mobile homes is you have built in bird dogs and lead generation. At the start of my mobile home investing career, I was almost too embarrassed to tell people I was investing in mobile homes.  I really thought that my investor friends were sure to scoff and think I had lost my mind.  What really happened?  No one scoffed. Well, maybe a few did at first; but for the most part, my fellow investors were happy for me. They were happy because now, they could do something with all the mobile home leads that had been stacking up for months. They could bring them to me. Investors were bringing me done deals or great new leads on a silver platter every day.  It still is amazing to me no one seemed to know what to do with “ready to go” mobile home leads that came to them from their regular marketing efforts.

The other “built-in bird dog” resource is the park residents themselves.  Once you start visiting the parks, you will be amazed at the people who will simply strike up a conversation.  They will begin telling you not only their business, but everyone else’s as well.    If you are willing to take the time to listen and ask good questions, those conversations often lead to additional inventory, information about market needs and motivated sellers and buyers.

Next reason, avoid the crowds. When I started getting leads and looking at homes listed at $1000, $3000 or even “FREE…MUST BE MOVED,” I really thought that my calls would be answered with “It already sold.”  To my delighted surprise, approximately 9 out of every 10 homes hadn’t been sold and the sellers were desperate to play “Let’s Make a Deal.”  I remember to this day the voices of anxious mobile home sellers telling me how other investors wouldn’t even talk to them because they had a mobile home or how interested buyers were asking for owner financing and the seller didn’t understand the concept and didn’t feel equipped to handle that situation.

The fourth reason is low dollar deals…REALLY! This is the reason I started buying mobile homes. I didn’t have cash or credit when I started. Mobile homes in parks can be VERY inexpensive. I have gotten many complete homes (appliances included) 100% FREE in terms of purchase price.

With mobile homes, you start with initial investment capital of hundreds of dollars, not thousands. This also helps if you are hung up by a “fear of loss” factor.   Although none of us like the idea of losing money, committing a $1,000 “uh-oh” (what we call that the cost of “real world education”) is a lot easier to recover from than a $100,000 catastrophe!

The final reason: going, going, gone! What’s that you say? “Good luck selling a mobile home and making money in this market!” It true selling a used mobile home in a park for “all cash” could be difficult in many markets today. The fact is not many mobile home buyers have $5,000 to $80,000 lying around. But there is a world full of serious buyers ready to own their own home.

Our target buyers have had some credit challenges in the past and may not be bank approved; but they DO have a clean record, savings account and good job history. Plus, they have $2,000 to $5,000 cash for a down payment and the ability to make monthly payments. In my experience, they make the ideal customer; and being able to create a home ownership opportunity for someone that thinks they can never own (or never own again) is AWESOME!

Those are just a few of the many reasons that mobile home investing can be easy and extremely lucrative. I hope to see you in the Rich Dad Education Mobile Home Elite Training, so you can discover more of the profitable approaches to investing in mobile home units and parks. And so, like I did, you can go from skeptic to motivated!

By Jonathan Dugger

Rich Dad® Education Elite Training Mentor

Quick Start Guide to Investing – Part 1: Real Estate Cycles and Key Indicators

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Many real estate investors when they are just beginning are overwhelmed. The one thing they know for sure is that they want to take control of their financial future. However, once the decision to take your financial future into your own hands has been made, what should you do next?

This post is the first in a four part series that will address the fastest way to get started as a real estate investor. This quick start guide will outline the absolutely critical steps in establishing your investing career. They are:

  1. Understanding Real Estate Cycles
  2. Identifying the Key Indicators in Your Market
  3. Building Your Power Team
  4. Making Offers
  5. Finding Financing Sources for Your Deals
  6. Implementing Finding Strategies
  7. Understanding Exit Strategies
  8. Constantly Learning and Mastering Your Craft

Today, we’ll deal with the first two.

Step 1 – Understanding Real Estate Cycles

The reason that we put this step first is that you are going into investing blind without an understanding of how real estate cycles work.

You must understand how the real estate cycle changes and the variables that cause it to change. You must also understand how financing changes as the cycle shifts. In addition, different investing techniques will work better than others under certain market conditions.

While there are undeniable national trends in real estate, local market conditions can vary greatly from location to location. You must spend the time getting to know the specific real estate market where you want to invest or you will not be properly prepared.

When you have the information about real estate cycles and how they function, you can begin to lay out a game plan for investing. You will know what strategies are likely to be best for your market.

Step 2 – Identifying the Key Indicators in Your Market

This step is very closely linked with Step 1. In order for you to truly understand what is happening in your market, there are some statistics you need to examine.

These include:

  •  Jobs Coming In
  • Occupancy Rate
  • Rent Incentives
  • New Units Permitted
  • Inventory for Sale
  • Average Days on Market

Since supply (homes for sale/for rent) and demand (people coming into the area) are the factors that push the cycle from one stage to the next, you want to monitor these indicators closely.

By staying in touch with these statistics, you will see changes coming instead of being blindsided by them after they have happened.

Next time, we’ll talk about building your power team and making offers.

 

By Mark Justice

Rich Dad® Education Elite Training Mentor

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