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Category Archives: Real Estate Success Series

Real Estate Success Series: Losers and Losing

losing“Losers are people afraid of losing.”  – Robert Kiyosaki

Losing can teach you some of the greatest lessons you will ever learn in life. Losing can provide invaluable experience, refine one’s character, and set the stage to increase the chances of success in future endeavors. One could poetically write on the benefits of losing, yet many people will avoid losing as if it were a flesh-eating zombie because of one simple fact:

Losing is not fun. In fact, it stinks.

  It is not fun when your favorite team loses to its arch-rival. It is never fun when your older sibling beats you for the 95th time in a row in a competitive event. It definitely is not fun when you set out to accomplish something only to fall flat on your face. Losing can be a painful, emotional experience that brings out every deep dark fear of inadequacy that a person possesses. Because of this, many people simply avoid any situation where they might lose. These individuals forgo the possibility of winning in order to ensure not losing.

In order to avoid losing, some people will avoid competitive events where the only thing at stake is pride. The percentage of people who avoid the prospects of losing increases dramatically when monetary risk is put into the equation. Not only are all of the emotions created by losing present, but the thought of losing something tangible in order to potentially gain something makes these individuals very uncomfortable. This discomfort leads to no action being taken, as in their mind, inaction is the safest course of action.

What makes these situations sad and unfortunate is that most of these same individuals would joyfully embrace the benefits of successful action. They would love to profit off successful real estate deals. They would gladly choose to create enough positive cash flow to escape the Rat Race. They would cherish working for themselves by becoming successful entrepreneurs. However, to obtain these things they face the risk of losing money or their time. In the end, they choose security over potential prosperity as the thought of losing, or losing something, is simply too much to bear.

Remember this simple fact: Nobody has ever escaped the Rat Race by inaction. Action brings with it a certain amount of risk but the rewards so tremendously outweigh the risk that it is worth the occasional setback. Losing will never make you a loser, but not attempting to win surely will.

 

 

 

Real Estate Success Series: Selling Your Spouse

selling your spouse            You finally came up with a genius entrepreneurial idea. This is the idea that is going to change everything in your life. In fact, you cannot believe that you did not think of it before. Naturally, you are excited about the prospect of implementing the idea immediately and you cannot wait to share it with your spouse. After all, your idea is so brilliant that your spouse is not only going to share your excitement but give you that look of pride. That look that says: my parents were wrong. I should have married you after all.

You might be so excited that you spring the idea as soon as your spouse walks through the door or maybe you might wait until you are at the dinner table. You might strategically wait until the kids go to bed so that you will not be interrupted. When the moment finally arrives you start to share your idea. Naturally you are excited and so maybe you start to ramble on a bit, but this does not matter to you. After all, this idea is brilliant and it is going to change everything in your life.

            As you continue to share your plan you might notice that your spouse’s body language is beginning to change. She might start to ask questions that you were not expecting. She starts to give you a look — but not the one that you were hoping for. You are pretty sure this look signifies that she either thinks you have lost your mind or is regretting not following her parent’s advice.

As she starts to voice her objections, you become frustrated that she cannot see the brilliance in your idea. Instead of taking a step back, you attempt to push the idea even further. While raising your voice, making demeaning comments, or talking about your brilliance are horrible tactics at this point, in your frustration that is the route you choose to go. After this, not only does your spouse not want to hear your idea, it’s likely she will not want to talk to you at all. You have failed at pitching your idea to the most important audience of all — your spouse.

Your Spouse’s Perspective

            In selling an idea you must always take into account your target audience. While some couples share an entrepreneurial vision, many couples have one spouse who values security far more than the other. Even couples who are entrepreneurial in nature might have different objectives, levels of risk tolerance, and interests. Even if you and your spouse are the perfect match, entrepreneurial soul mates brought together by fate, your spouse might simply think your idea is dumb.

            Whenever you have an entrepreneurial idea you have to take into account your spouse’s perspective. Realize that to the average person most entrepreneurial ideas are going to sound a little crazy. In fact, the more out-of-the-box and brilliant the idea is, the crazier it is likely to sound. Even simple things like stock trading and real estate investing, things that thousands of people have succeeded at, are going to make many people uncomfortable.

            Getting your spouse to buy into your idea is a critical step for numerous reasons. Aside from marital bliss, your idea is likely to have financial ramifications on your family and will likely require you to make sacrifices of your time in order to implement it. It is not good enough to simply get a response of “fine, do what you want to do” or even general acceptance. Obtaining genuine support can do wonders to increase your chance of successfully implementing your idea. Here are a few tips to help you prepare for that initial spousal pitch.

1)      Work Out the Details of Your Idea. Thoroughly thinking through your plan may seem like common sense. However, many would-be entrepreneurs fail to do this even before pitching an idea to potential investors, let alone a spouse. Obtain all of the relevant financial data, determine start-up costs, educational expenses, marketing expenses, projected revenue, and projected monthly expenses. Are there similar products or individuals who are succeeding at what you are venturing out to do? What is the downside if you are wrong? What is the upside if you are right? How is your idea going to work? Take it from the point you have now (an idea) to the point when it is generating revenue. Is each step along this path logical? Determine for yourself how and why it is going to work.

2)      Prepare a Business Presentation. After you work out the details of your plan, you will have gathered plenty of information to present to your spouse. Treat the opportunity to present your idea to your spouse very seriously and use the information you have gathered to make a professional presentation. Prepare a presentation that you would make for a potential investor. Give your spouse this level of respect and if your idea has merit then she will likely will be more receptive to hear it.

3)      Prepare for Potential Questions. After you make your presentation or during the presentation, you are likely to be asked numerous questions. In preparation, put yourself in your spouse’s shoes and attempt to anticipate what questions she might have. Have detailed responses for these questions; going as far as preparing material that can help answer these questions.

4)      Prepare Action Steps – At some point near the end of your conversation you may have sold your spouse on your idea or she may be on the fence. Even if she seems hesitant, it will be helpful to have a list of action steps that you need to take as a couple/family to implement your idea. Make the first few of these steps simple to achieve; steps that your spouse is almost assuredly willing to agree to. This will help create momentum after the initial sharing of your idea and unanticipated excitement in your spouse as those first few steps are accomplished.

There is little downside to putting in a little preparation before you share an important entrepreneurial idea with your spouse. You might discover the idea was not as strong as you thought it was or you might become more convinced than ever of its worth. Your spouse will be far more receptive when you have facts, figures, and thought-out ideas presented in a professional manner. You might even get that look of admiration as an added bonus. 

Real Estate Success Series: Getting and Keeping an Advantage in Your Investing Business

Perserverence

One of the greatest sports movies is Hoosiers. If you haven’t seen the movie, it is the story of a small-town high school basketball team and how it won the state championship as the ultimate underdogs. It’s a great motivational movie with a wonderful message. And there is a quote from the movie that you would do well to remember. Here is that quote from the team’s basketball coach named Norman Dale, played by Gene Hackman:

“You know, in the ten years that I coached, I never met anybody who wanted to win as badly as I did. I’d do anything I had to do to increase my advantage.”

And that quote is really the whole purpose of this article… getting an advantage and keeping it.

This is a very timely article. As the holiday season comes upon us, this is the time that many investors relax and take it easy. They think that no one is buying or selling during this time, so they put no thought into their business. They simply do what everyone else does, which is exactly why you hear them say things like, “The holidays are a slow time for me,” or “I have never done any deals in December.”

Maybe those statements have more to do with the way they run their personal business rather than market conditions. We know investors who do more deals during these months than other times during the year simply because they expect it and run their business that way! By doing a reality check we can help you get an advantage over the competition.

Let’s review a series of questions to put things in their proper perspective:

Do people buy and sell homes during the holidays? YES! You may know someone planning to buy their first home or upgrade their home as a gift for Christmas.

The truth is that people are always buying and selling and it has nothing to do with market conditions. People are always being relocated due to their job or the military regardless of the time of year. There are always families that moved because they want their children to be in a better school district and have a better education. People pass away and the heirs sell their home to settle debts. People are unemployed and face foreclosure regardless of the time of year.

See, the truth is that there is always buying and selling going on regardless of the time of year or market conditions. When you understand this truth, your mind will be ready to capitalize on the opportunities that are in front of you.

Are there still investing opportunities at this time of year? YES! In fact, when you consider things from a proper perspective, there are actually more deals per investor this time of year. Since most investors are inactive during the holidays, there are actually more deals out there for those who are active and keep working.

Even though the total number of deals out there may go down during the holidays, so do the number of people seeking those deals! The whole point is that you can leverage your time to make the most of it when others are not working on their business.

Why do most investors slow down at this time of year? It is the same reason why most people don’t work much during the holidays. They are busy preparing for work parties, buying presents, going to festivities, etc. Sure, it is a busy time of year, however you can stay as busy as you want.

The reason why this is such an advantage for you is that you have so much less competition because of the holidays. They are busy taking time off to do what everyone else is doing. One of the easiest ways to have an advantage over your competition is to do the opposite of what they are doing. At this time when your competition is not advertising, not making offers, not networking, is the time for you to do even more of it!

People still need to buy and sell and you can capitalize on this opportunity by keeping your marketing going, by talking with people, and by making offers. When you do what others are not willing to do, you will get results that others do not get.

Now, you might be saying, “Well, I am busy with my own parties, presents, and other obligations too.” We aren’t suggesting that you not do those things. We are saying that you keep your business moving forward. There is no reason for it to come to a screeching halt.

At the very least, take some time to put together a plan for the following year. You can make more plans to expand your business into other markets, try different methods of advertising, approach partners that may become funders for your deals, or grow into new areas of the market.

The absolute worst thing you can do during the holidays is to do nothing to move your business forward. Everyone loves the freedom that being an entrepreneur provides, but you must also pay the price to make your business successful. Remember, we are after creating an advantage for your investing business. When you do what everyone else does, you have no advantage. In fact, the easiest way to create an advantage in any business is to do the opposite of what everyone else is doing. You can work smarter without working harder.

Remember that the whole focus of this article is to create an advantage for you over your competition. Take this time to reflect on what you can do to put yourself in a different category than your competition. Do you need to find more funding sources? Network for more opportunities? Learn new strategies? Focus on creating your advantage. Your business will prosper from it as a result.

Real Estate Success Series: Paying Too Much for a Property

payingThis Rich Dad Education investing series focuses on the common traits of successful students in addition to the mistakes that unsuccessful students make. The goal of this series is to help provide a guide to emulate the traits of successful students while simultaneously helping new students avoid the pitfalls that can occur to those starting their real estate investing career. One of the pitfalls that you want to avoid is one of the biggest mistakes new real estate investors make — paying too much for a property.

It is easy to understand why even new investors who are properly trained pay too much for a property. After acquiring the proper training, there is a tremendous amount of excitement at the prospect of completing one’s first deal. After spending time becoming familiar with the local market, new investors who overcome whatever fear they have make their first offer on a property. Unfortunately, most offers are not successful and the new investor thus is forced to find another property and make another offer. This too is unlikely to be successful. Fueled with enthusiasm and a desire to get their new real estate career rolling, it is very tempting for a new real estate investor to start increasing the number of offers in order to get a deal done.

Perhaps the new real estate investor gets a counteroffer that is above their parameters for purchasing the property. It is very tempting for the inexperienced investor to adjust their numbers to find a way to make the deal work. This leaves them very little room for error, but they find a way to convince themselves that they can make it work. Their impatience, coupled with their enthusiasm to make their first deal, leaves them vulnerable to paying too much for the property.

Other Mistakes New Investors Make in Purchasing Their First Property

Aside from the pitfalls of unbridled enthusiasm and impatience, new investors can make mistakes depending on the exit strategy they are using. Many new investors choose rehabbing as their first real estate strategy to master. In analyzing a property, a new investor needs to determine what they can sell the property for and account for all expenses. These include acquisition costs, holding costs, repair costs, selling costs, a discounted sales price, and the profit they hope to make. Without the proper training, it is very easy for new investors to make mistakes in these calculations. Even with the right training, many impatient new investors get creative in their calculations to make the deal work.

New investors who are purchasing a property for rental in order to produce cash flow often make the mistake of calculating what the home might resell for instead of properly calculating the cash flow it will produce. New investors can also forget to factor in a realistic vacancy factor in their exuberance to get a new deal done.

Every new investor wants to get that first successful deal done. It is an exciting time that can create momentum that lasts an entire investing career. The key phrase here is successful deal. Completing an unsuccessful deal can have the opposite effect, leaving a new real estate investor frustrated and unmotivated to put in the work to complete that next deal. If you follow your training and demonstrate patience, then you will eventually complete that first deal and turn a nice profit in the process.

Real Estate Success Series: Finding Real Estate Success: Knowing Your Local Market

Real Estate SuccessThis Rich Dad Education investing series focuses on identifying the common variables that determine student success. Students who attend Rich Dad Education elite trainings receive knowledge on how to broadly apply specific strategies and techniques in their real estate investing career. Students who participate in the Rich Dad Education mentoring program further hone their skills on their chosen techniques and start to learn how to apply them in their local market. Learning about the specific market that you are investing in is crucial. This knowledge plays a critical part in determining student success.

Understanding Your Market

Rich Dad Education students who find high levels of success normally have spent a great deal of time studying their market. They develop true expertise, not only in the area of training they have received, but also in how to apply that training in their local market. In essence, they know almost everything about the local market they invest in.

For new real estate investors, this might seem like a daunting task. Naturally, this type of expertise does not come overnight, but you would be surprised at how quickly you can gain a basic understanding of the market you are investing in. True expertise will develop over time as you apply your trade and continue to study the characteristics of your market.

Once Again, Start One Step at a Time

The advice to start one step at a time applies in the study of your local market as well. Start with a singular area of knowledge and you will find this knowledge builds upon itself quickly. Here are some ideas to begin your search. You want to know:

  • Where properties are selling and what prices they are selling for
  • The average number of days that properties in certain areas stay on the market
  • The total number of homes that are for sale in each area
  • Information on the local job market
  • The rates of population growth and decline in certain areas
  • Where schools and shopping centers are located
  • The crime rates in the areas you are looking to invest in
  • The percentage of properties that are occupied by owners and by renters
  • Existing zoning laws and any restrictions on certain types of property

Once you have acquired knowledge in these areas you will have a tremendous advantage and you’ll be able to determine where you should focus your investment efforts and what types of property you should be looking to invest in. Naturally you will have insight into how much you can pay for a property as well. Students who become successful real estate investors take the time to learn their local market and are handsomely rewarded for their efforts. One would be wise to follow down the path of those who have previously succeeded and learning about your local market is a path that can quickly start paying dividends.

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