I happened to stumble across a blog yesterday that was addressing all the great deals that were on the market. While I too tend to talk about all of the deals on the market, I forget, as we all seem to do that an appealing deal for one person, might be a money pit for the next person.
Sure, there are a lot of foreclosures on the market, and there are a lot of houses with equity on the market right now, but they don't automatically constitute a deal. The truth is that only YOU can determine if a deal is the right one for you. And the only way that you can be sure is to have a set of criteria that you use to evaluate each deal, that is tied directly to a goal that is defined in a business plan. So you see, all those deals out there might not actually be good deals for what you are trying to accomplish.
Make sure you didn't miss the part about having a set of criteria that you use to evaluate each deal. I completely enjoy the academic exercise of figuring out business systems and criteria. When you are done with the exercise, you are left with a keen sense of what it will take to keep moving forward at a sustained rate...and don't get me going about the sustainability of business plans...that is a whole topic in and of itself.
Alright folk, that's about all for now...Take care and happy investing.
Robert D. Cass
http://www.LocalRealEstateDeals.com
Wednesday, July 29, 2009
Tuesday, July 28, 2009
Real Estate Investing (Tour de France Style)
One of the most incredible sporting events has just come to pass and it held up to all of its usual glory. I am talking about the Tour de France, of course.
Many Americans do not completely understand the complex nature of cycling, never mind the mind-boggling, gut-wrenching, 3 week race in France every year. If you happen to watch it on tv at any given time, it just looks like a bunch of world class athletes riding their bikes all together. That is on the surface, but what is going on in the minds of those men is nothing short of amazing.
There is so much strategy and so much going on that you can't even begin to see everything that is going on. One of the things that strikes me most is that not everyone is there to win the tour. There are different races inside of the race and you have to be on your toes to know who is interested in what and why.
Lance Armstrong always has his sites on the podium when he goes into the tour, but there are others whose goal is to win as many stages as possible. These riders have no desire to win the overall race, just individual stages of the race.
This is not so different from Real Estate Investing...There is so much going on at any given time, that we need to know our game plan and stick to it. Even in this economy there is so much opportunity that it can be a distraction at times. That is why it is important to know which opportunities are real and which ones are not. Conversely, it is important to know the real threats when they present themselves and which ones are not worth responding to. Being able to distinguish the difference is a matter of reaching your goals or not, it is also the sign of the consummate real estate professional. When you worry about threats that are not real, or chase opportunities that are not leading you to your desired goal, you are wasting precious energy and risk losing it all.
Know what race you are in and why it is important to you. Study the competition and understand the real threats to your business. Don't rely on the spectators to tell you what the real threats and opportunities are for your business. Real estate is all about mental strategies and physical execution; not unlike the Tour de France.
Stay the course and remain focused. Healthy Investing!
Rob
http://www.LocalRealEstateDeals.com
Many Americans do not completely understand the complex nature of cycling, never mind the mind-boggling, gut-wrenching, 3 week race in France every year. If you happen to watch it on tv at any given time, it just looks like a bunch of world class athletes riding their bikes all together. That is on the surface, but what is going on in the minds of those men is nothing short of amazing.
There is so much strategy and so much going on that you can't even begin to see everything that is going on. One of the things that strikes me most is that not everyone is there to win the tour. There are different races inside of the race and you have to be on your toes to know who is interested in what and why.
Lance Armstrong always has his sites on the podium when he goes into the tour, but there are others whose goal is to win as many stages as possible. These riders have no desire to win the overall race, just individual stages of the race.
This is not so different from Real Estate Investing...There is so much going on at any given time, that we need to know our game plan and stick to it. Even in this economy there is so much opportunity that it can be a distraction at times. That is why it is important to know which opportunities are real and which ones are not. Conversely, it is important to know the real threats when they present themselves and which ones are not worth responding to. Being able to distinguish the difference is a matter of reaching your goals or not, it is also the sign of the consummate real estate professional. When you worry about threats that are not real, or chase opportunities that are not leading you to your desired goal, you are wasting precious energy and risk losing it all.
Know what race you are in and why it is important to you. Study the competition and understand the real threats to your business. Don't rely on the spectators to tell you what the real threats and opportunities are for your business. Real estate is all about mental strategies and physical execution; not unlike the Tour de France.
Stay the course and remain focused. Healthy Investing!
Rob
http://www.LocalRealEstateDeals.com
Monday, July 27, 2009
Italian Cooking for Real Estate Invesors
I am just beginning to appreciate the subtleties of my heritage and how it applies to real estate and real estate investing.
As I was making tomato sauce for dinner this evening, it occurred to me that real estate is going through the same process that makes the best tomato sauce...reduction is the key word here.
I remember how amazed I was the first time I made my sauce from scratch, particularly, how much water is really in each tomato. It used to baffle me as to why my Nana would have to cook all day to make tomato sauce for all of the dishes she was cooking. The longer that you simmer your sauce, the richer the flavor and the more the flavors combine to give a full, rich taste.
The real estate market is doing the same thing right now. The market is simmering and has been simmering for some time. Too much heat ruins things...the key is to manage the heat and keep it at just the right temperature. The problem is that the real estate market was so hot for so long that it burned out. The same thing will happen to your sauce if you don't manage the heat...it will eventually burn.
Ok, this simmering effect has had its effect on the real estate population as well. While reduction in cooking removes all of the unnecessary water, the simmering in our industry has removed a lot of unnecessary middle men. What we are left with are the parts that make a rich flavorful, (wait we are talking about real estate)...what we are left with are the real estate professionals that are focused and driven to provide the best service in the market. The end result is a richer, more robust real and meaningful estate experience.
So while this may be a tough time for a lot of people, what we are going to end up with is a much better, cleaner, more efficient industry than before this happened. This simmering is a natural process that tends to bring out the best of the best...and YOU are one of the best.
Congratulations...Healthy Investing!
Rob
http://www.LocalRealEstateDeals.com
As I was making tomato sauce for dinner this evening, it occurred to me that real estate is going through the same process that makes the best tomato sauce...reduction is the key word here.
I remember how amazed I was the first time I made my sauce from scratch, particularly, how much water is really in each tomato. It used to baffle me as to why my Nana would have to cook all day to make tomato sauce for all of the dishes she was cooking. The longer that you simmer your sauce, the richer the flavor and the more the flavors combine to give a full, rich taste.
The real estate market is doing the same thing right now. The market is simmering and has been simmering for some time. Too much heat ruins things...the key is to manage the heat and keep it at just the right temperature. The problem is that the real estate market was so hot for so long that it burned out. The same thing will happen to your sauce if you don't manage the heat...it will eventually burn.
Ok, this simmering effect has had its effect on the real estate population as well. While reduction in cooking removes all of the unnecessary water, the simmering in our industry has removed a lot of unnecessary middle men. What we are left with are the parts that make a rich flavorful, (wait we are talking about real estate)...what we are left with are the real estate professionals that are focused and driven to provide the best service in the market. The end result is a richer, more robust real and meaningful estate experience.
So while this may be a tough time for a lot of people, what we are going to end up with is a much better, cleaner, more efficient industry than before this happened. This simmering is a natural process that tends to bring out the best of the best...and YOU are one of the best.
Congratulations...Healthy Investing!
Rob
http://www.LocalRealEstateDeals.com
Saturday, July 25, 2009
Plan your Business like a business plans
Ok, so I have a gripe...There are too many people out there that don't treat their real estate investing like a business. It kills me to hear about people and businesses that treat real estate investing like a hobby or a side job. There is way too much at stake to be moving forward without a plan.
Your plan doesn't have to be a 200-page dissertation on the state of the market either. But you should have some goals, milestones and some sort of way to track your success.
I used to think that your business plan was like the ten commandments, you know, carved into stone and never to be changed. Luckily, business plans are living documents and have to change and evolve. Your business plan should have enough flexibility to stand the test of time and weather many storms.
The truth of the matter is that your business and business environment are always changing so you need to have a tool that is flexible enough to guide you and give direction, but if it is taking you down the wrong path, you better be able to change course before you are completely derailed!
Even if you only have a one page business plan you should address the nature of your business, what your goals are (short-term, intermediate and long-term) and attach a metric that can be measured...when you use phrases like, I want to be successful or have a bunch of houses, this is useless, because there is no identifiable quantity to measure against. Be specific.
There was a time when I would start writing a business plan with words, but I like to think that I have evolved to the degree that I start out by building a proforma to see if the business makes sense from a monetary stand point. The words are the easy part, but if the business is not a viable venture in the first place, there is no reason to even write one word. My advice is to hunker down and put your business into a spreadsheet. The mere exercise will make you a better business person as you have to ask yourself if you have all of the right numbers in place and whether or not you can accomplish the financial goals you have set for your business.
Once you have a spreadsheet that tells the story of your business, run it past somebody who knows anything about your business to see what they think. It is always best to be conservative when you are running your numbers. It is easy to get caught up in scenarios that show how you are going to make millions of dollars per quarter, but there is usually something that has not been taken into consideration.
Anyway, take the time to write a very basic business plan...just a couple of pages will be worth its weight in gold if you review it on a weekly basis and use it as the planning tool that it is designed to be. Be flexible though, the business that you are in five years from now may not be the business you started out building, but you just might find that the business you intended to start was not a viable, sustainable business...but that the business you ended up running is sustainable and viable.
Good Luck and Healthy Investing to all!
Rob
http://www.LocalRealEstateDeals.com
Your plan doesn't have to be a 200-page dissertation on the state of the market either. But you should have some goals, milestones and some sort of way to track your success.
I used to think that your business plan was like the ten commandments, you know, carved into stone and never to be changed. Luckily, business plans are living documents and have to change and evolve. Your business plan should have enough flexibility to stand the test of time and weather many storms.
The truth of the matter is that your business and business environment are always changing so you need to have a tool that is flexible enough to guide you and give direction, but if it is taking you down the wrong path, you better be able to change course before you are completely derailed!
Even if you only have a one page business plan you should address the nature of your business, what your goals are (short-term, intermediate and long-term) and attach a metric that can be measured...when you use phrases like, I want to be successful or have a bunch of houses, this is useless, because there is no identifiable quantity to measure against. Be specific.
There was a time when I would start writing a business plan with words, but I like to think that I have evolved to the degree that I start out by building a proforma to see if the business makes sense from a monetary stand point. The words are the easy part, but if the business is not a viable venture in the first place, there is no reason to even write one word. My advice is to hunker down and put your business into a spreadsheet. The mere exercise will make you a better business person as you have to ask yourself if you have all of the right numbers in place and whether or not you can accomplish the financial goals you have set for your business.
Once you have a spreadsheet that tells the story of your business, run it past somebody who knows anything about your business to see what they think. It is always best to be conservative when you are running your numbers. It is easy to get caught up in scenarios that show how you are going to make millions of dollars per quarter, but there is usually something that has not been taken into consideration.
Anyway, take the time to write a very basic business plan...just a couple of pages will be worth its weight in gold if you review it on a weekly basis and use it as the planning tool that it is designed to be. Be flexible though, the business that you are in five years from now may not be the business you started out building, but you just might find that the business you intended to start was not a viable, sustainable business...but that the business you ended up running is sustainable and viable.
Good Luck and Healthy Investing to all!
Rob
http://www.LocalRealEstateDeals.com
Friday, July 24, 2009
The Patience of a Gardener
I have found a new joy that compliments my interests in real estate. Gardening...or more specifically, vegetable gardens.
It is a modest garden of watermelon, cantaloupes, tomatoes, summer squash and cucumbers, but the lessons I am learning are invaluable. Now that the season is in full-swing, my sons and I go out to the garden every evening to see what is ready to pick. My youngest son of 19 months is getting very good at determining what is ready to pick and what is not.
The watermelons have him fooled though. My youngest boy can't figure out why we aren't picking the things that are biggest in the garden. Even though the watermelon are far from being ready, they aren't ready to pick. Real estate is the same way. If you pick your exit too early, you miss the fruit of your labor; profits.
You see, sometimes we have to be just a little bit more patient, and remind ourselves that every deal is not the same and every situation is different. Find your deal, work it, tend to it, give it what it needs to bear fruit. Pick it too early and all is for naught...Maybe you should try gardening to keep your mind off things...just a thought.
Happy Gardening, errr, Investing...
http://www.LocalRealEstateDeals.com
Rob
It is a modest garden of watermelon, cantaloupes, tomatoes, summer squash and cucumbers, but the lessons I am learning are invaluable. Now that the season is in full-swing, my sons and I go out to the garden every evening to see what is ready to pick. My youngest son of 19 months is getting very good at determining what is ready to pick and what is not.
The watermelons have him fooled though. My youngest boy can't figure out why we aren't picking the things that are biggest in the garden. Even though the watermelon are far from being ready, they aren't ready to pick. Real estate is the same way. If you pick your exit too early, you miss the fruit of your labor; profits.
You see, sometimes we have to be just a little bit more patient, and remind ourselves that every deal is not the same and every situation is different. Find your deal, work it, tend to it, give it what it needs to bear fruit. Pick it too early and all is for naught...Maybe you should try gardening to keep your mind off things...just a thought.
Happy Gardening, errr, Investing...
http://www.LocalRealEstateDeals.com
Rob
Thursday, July 23, 2009
Real Estate Compost Pile
Ever since we began talking about the "green edition" of our magazine, my son has been urging us to become a "greener" family. Considering he is in the third grade, this is an impressive and reasonable request.
We have taken up the greener lifestyle and I must say that it suits me well. One of my favorite green things to do is to contribute to our compost pile in the backyard. Last night as I was contributing the latest kitchen scraps to the pile I noticed that the pile was "cooking." Yep, it was about 132 degrees. HOT! or as they say in compost terminology, it was "cooking!"
That got me to thinking that the real estate industry is not so different; especially real estate investing. There are a lot of "scraps" left on the market right now and it is up to the real estate investment community to make things good again. Well, these are the properties that nobody can afford, or that need fixing up, or are just sitting around on the market. This is not good for a stumbling economy. What we need to do is to turn this "refuse" into fertile soil that we will allow us to rebuild the garden of our industry.
With my compost pile out back, I have been contributing for months, putting my lawn clippings in there along with kitchen scraps, and finally last night it began to cook. The same thing is going to happen in our real estate community. We just have to keep the faith and keep practicing fundamentally good transactions. In that way, we will be contributing to the come back of our industry.
The real estate investment community will inevitably begin heating up again, or "cooking" very slowly, but then it will turn into the hot market that it was and give off returns that will help spur the economy as well. These times that we are facing are only temporary and while we may not see it on a daily basis, the universe is already at work putting together the elements to the next great real estate boom.
Hang in there and take the good with the bad. Real estate investing is cyclical, just like any other natural occurrence.
Think of http://www.LocalRealEstateDeals.com like your real estate compost pile, throw in your deal listings and look for new ones. Together we will turn the tide around.
Rob
We have taken up the greener lifestyle and I must say that it suits me well. One of my favorite green things to do is to contribute to our compost pile in the backyard. Last night as I was contributing the latest kitchen scraps to the pile I noticed that the pile was "cooking." Yep, it was about 132 degrees. HOT! or as they say in compost terminology, it was "cooking!"
That got me to thinking that the real estate industry is not so different; especially real estate investing. There are a lot of "scraps" left on the market right now and it is up to the real estate investment community to make things good again. Well, these are the properties that nobody can afford, or that need fixing up, or are just sitting around on the market. This is not good for a stumbling economy. What we need to do is to turn this "refuse" into fertile soil that we will allow us to rebuild the garden of our industry.
With my compost pile out back, I have been contributing for months, putting my lawn clippings in there along with kitchen scraps, and finally last night it began to cook. The same thing is going to happen in our real estate community. We just have to keep the faith and keep practicing fundamentally good transactions. In that way, we will be contributing to the come back of our industry.
The real estate investment community will inevitably begin heating up again, or "cooking" very slowly, but then it will turn into the hot market that it was and give off returns that will help spur the economy as well. These times that we are facing are only temporary and while we may not see it on a daily basis, the universe is already at work putting together the elements to the next great real estate boom.
Hang in there and take the good with the bad. Real estate investing is cyclical, just like any other natural occurrence.
Think of http://www.LocalRealEstateDeals.com like your real estate compost pile, throw in your deal listings and look for new ones. Together we will turn the tide around.
Rob
Tuesday, July 21, 2009
Show me the MONEY!
Traditional financing has been so readily available for so long that many investors never needed to get really creative. It in times like these that we need to tap our creative skills to find the money that we need to finance the deals that are out there….and there are indeed deals out there! If ever there was a time to be involved in real estate…THIS IS IT!
Hard Money…Yep, there is still plenty of hard money out there. My suggestion is to find a good source and make friends with them. Build their trust in you and your ability to give them a return on their investment and keep using the same source. These guys are regular people just like you and me and they are looking to make good deals. You have to remember that they make money by lending it and they don’t make money when they aren’t lending it…so, give them a reason to lend money to you and you will have your deals.
A couple of hard money sources that you may want to check out are:
www.blazevicfunding.com
www.EquityDevelopmentCorp.com
There are also Self-Directed IRAs that have been around a while and I am still amazed that many investors do not use this tool to invest in real estate. Check with the experts on this, but you can also work with other investors and their Self-Directed IRAs to pool your money to work on bigger deals or commercial deals. Not a bad way to go if you are in need of some capital at a great rate! Why not pay yourself the interest, rather than pay someone else…think about it…
And of course there are always the time tested 1031 exchanges to maximize your “NOW” money after a deal. There are pros and cons to 1031 Exchanges just like there are to all of the types of funding out there. Get familiar with them and use them like the tools they are to help you build your portfolio.
These, of course, are just a few of the alternative financial tools that are out there, you will want to become familiar with as many of them as possible. Knowing what money is out there and how to use it may just prove to be the fine line between success and failure.
Good Luck and Healthy Investing!
Rob
http://www.LocalRealEstateDeals.com
Hard Money…Yep, there is still plenty of hard money out there. My suggestion is to find a good source and make friends with them. Build their trust in you and your ability to give them a return on their investment and keep using the same source. These guys are regular people just like you and me and they are looking to make good deals. You have to remember that they make money by lending it and they don’t make money when they aren’t lending it…so, give them a reason to lend money to you and you will have your deals.
A couple of hard money sources that you may want to check out are:
www.blazevicfunding.com
www.EquityDevelopmentCorp.com
There are also Self-Directed IRAs that have been around a while and I am still amazed that many investors do not use this tool to invest in real estate. Check with the experts on this, but you can also work with other investors and their Self-Directed IRAs to pool your money to work on bigger deals or commercial deals. Not a bad way to go if you are in need of some capital at a great rate! Why not pay yourself the interest, rather than pay someone else…think about it…
And of course there are always the time tested 1031 exchanges to maximize your “NOW” money after a deal. There are pros and cons to 1031 Exchanges just like there are to all of the types of funding out there. Get familiar with them and use them like the tools they are to help you build your portfolio.
These, of course, are just a few of the alternative financial tools that are out there, you will want to become familiar with as many of them as possible. Knowing what money is out there and how to use it may just prove to be the fine line between success and failure.
Good Luck and Healthy Investing!
Rob
http://www.LocalRealEstateDeals.com
Sunday, July 19, 2009
Dot Com Busted!
Who can forget the dot com bust of the new millenium? Apparently, millions of real estate professionals that's who! How is it that every time a new bubble appears on the horizon everyone and their brother forgets about the last bubble that busted or even worse, tells themselves that they are not in a bubble or that their industry is safe from bubbles...
Unbelievable...but it happened so there is no use fretting about it now. In my opinion, we need to buckle down and understand how each of us contributed in some way and how we can avoid this again. How do we do that? Personal accountability for starters. We can't control the whole industry, so we might as well control our own deals and actions.
Take the time to re-evaluate your business plan, if you have one. If you don't have one, create one. There is nothing complicated about it...keep it simple and realistic. I love to see a business plan that can be articulated in the form of a spreadsheet...words are nice, but numbers tell the real story. Make sure that your plan is sustainable. Sure, you might be able to make a killing on a particular deals, but how many times can you do that and furthermore, can you do that forever? The answer is probably not...so find a business or aspect of the business that you can maintain for an indefinite period.
Modest margins over the long-haul add up to more than you think. Just take the time and stay the course. The good news is that if you are still standing in the real estate industry today, you are doing something right. Keep up the great work and hang in there!
http://www.LocalRealEstateDeals.com
Unbelievable...but it happened so there is no use fretting about it now. In my opinion, we need to buckle down and understand how each of us contributed in some way and how we can avoid this again. How do we do that? Personal accountability for starters. We can't control the whole industry, so we might as well control our own deals and actions.
Take the time to re-evaluate your business plan, if you have one. If you don't have one, create one. There is nothing complicated about it...keep it simple and realistic. I love to see a business plan that can be articulated in the form of a spreadsheet...words are nice, but numbers tell the real story. Make sure that your plan is sustainable. Sure, you might be able to make a killing on a particular deals, but how many times can you do that and furthermore, can you do that forever? The answer is probably not...so find a business or aspect of the business that you can maintain for an indefinite period.
Modest margins over the long-haul add up to more than you think. Just take the time and stay the course. The good news is that if you are still standing in the real estate industry today, you are doing something right. Keep up the great work and hang in there!
http://www.LocalRealEstateDeals.com
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