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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

Market, Market and then Market some more

MarketingHaving trouble finding deals?

I was told the other day by a friend of mine, “Wholesaling is difficult”.  I think I gave a blank stare back with thoughts running through my head as to why would they would think that.  They stated it was hard to find a great deal.  Still taken back from their comment I found it to be an interesting comment, but not the first time I had heard it.  I’d like to believe that it must be easy for me because I AM THE QUEEN OF WHOLESALE; but in reality it truly just goes back to the basics.

I have taught a lot of students the strategy of wholesaling properties throughout my 14 years as a real estate trainer and I have given the same message to each class I teach.  In order to purchase a great deal you must have a motivated seller.  Anyone can put a property under contract but it doesn’t mean it’s a deal. It has been my experience that if you can’t sell your wholesale contract, then one or two things are probably a problem.  One, you have not marketed the property correctly and two, you contracted the property for too much.  If you don’t have enough profit in the deal for your new buyer they will not be interested in buying your contract.

So how do you find a great deal at the right price? Find a motivated seller or better yet, let them find you.  As a full time real estate investor I must find deals on a regular and repeated basis.  I need to find a source of real property leads where no one else is looking.  Once I have targeted possible motivated sellers, I spend time marketing, marketing, and marketing to that demographic.  I find that a seller tends to be much more motivated when they call me.

Once the seller calls you then just run the numbers like you are taught in class. Don’t overthink this part and stay true to running the numbers.  You have been taught in class that everything is based on the numbers.  You cannot make an emotional decision; you cannot will the numbers to work for you.  You have to put them into our time tested formula.  While many sellers will not take your offer, you will find that the ones who are motivated enough will.  Not everyone will like your offer; so what!  If the seller wants more than what you can offer, refer them to your Realtor.  Do not overpay for a property!!!  If you overpay for a property, then you will be the motivated seller down the road.    The key to successfully finding properties is to Market, Market, and then Market more.

When you are evaluating a deal, it is crucial that you make sure you are getting enough of a discount.  Often there are hidden expenses that students don’t think about.  Make sure that you are taking into consideration that you are going to have closing costs associated with the purchase and with the sale of the property.  You also need to budget for 6 months of holding costs.  If you are able to sell the property faster, then you will make more money.  If you budget less time and it takes more time, you will lose money.   You also need to factor in the repairs.  Finally and most importantly, you need to factor in your profit!!!  I have seen so many students figure all the other expenses and leave out their profit.  Remember you make the money when you buy the property, make sure that you buy right.

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