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7/6/14: From the Archives – Creating Partnerships…Finding and Becoming the Right Partner

They are a lot of options to choose from when it comes to making money with real estate investingSometimes when you go to a buffet, you try a little of a lot of different things….then you go back and LOAD UP on what you REALLY like.

In case you haven’t noticed, we’re really enamored of partnerships.  In our business and investing lives, we do almost everything through partnerships.  We just think it’s one of the fastest, most fun and effective ways to get things done.

So while we were busy at Freedom Fest 2014 (which was awesome as usual…watch for some great interviews coming soon!)…we decided to dig into the archives and re-release one of our most popular episodes from earlier this year.

You can see the original broadcast blog here.  It’s got some great commentary about the timeless principles of putting together powerful partnerships.  So even if you read it before, it’s probably worth a review.  And if you’ve never read it, then be sure to check it out.

But since we have your attention, here are some timely thoughts on why NOW is the time to get moving on putting together partnerships to accelerate your investing.Now is the time to take your real estate investing to the next level with partnerships

Not So Tiny Bubbles

The stock market is raging.  Real estate is on the rise.  Bonds are remarkably solid (that’s why interest rates are low).   Food and energy are climbing.  Oil, in spite of reduced demand and increasing supply, is holding steady.  Even gold is eking out a slow comeback.  In other words, measured in dollars, things are looking up.

That’s what happens when trillions of dollars are created to save banks from their derivatives folly.

There are a lot of different directions we could go with this (and boy, are we tempted), but the main point is that the Fed’s efforts to bolster balance sheets at any expense is working.  At least for investors…for the time being.  It’s still not stimulating growth in jobs, wages, consumer debt and spending, or business investment.  But Wall Street is LOVIN’ it!

There's a lot of money looking for a home right nowCombine this with the BIG wave of baby boomers crossing over into retirement, and there’s a LOT of investment capital looking for a home.

And it may sound crazy, but banks don’t want the money because it creates a high maintenance liability for them.  Besides, they can get all the money they need from the Fed at no interest.

So until borrowers show up in droves (loans are ASSETS to the bank) to offset the deposits (which are liabilities to the bank), banks aren’t chasing depositors.  When’s the last time you were offered a free toaster to open an account?  They want you to BORROW, not deposit.

Besides, banks aren’t paying any interest.  Bond yields are anemic.  That is, investors put up a lot of principal for very little yield.  Investors are STARVING for yield.

So investors are turning to stocks in spite of the obvious bubble.  Dividend paying stocks are probably the best play, but when stocks are so high, it’s hard to find good yields without taking too much principal risk.

YOU are the Solution

Real estate has healed from the black eye it got in 2008.  But even so, there are still great markets where nice properties can be acquired for less than replacement costs.  A real estate bubble may be coming, but it’s not here yet.

Mortgage rates are low.  Tenant population is strong and growing.  That means you can grab the assets at discount prices, lock in cheap long term financing (short the dollar), and service that debt with the rents from a growing population of renters.

But paper investors have no idea how to do real estate.  It’s messy, scary and mysterious.

YOU can offer investors your knowledge, connections, time and hustle.  They put up all or most of the money.  You find the deals, manage the details, and make it all happen.  Investors NEED you MORE than you need them.

Context vs Content

Robert Kiyosaki talks about this a lot, and it’s really important if you’re trying to figure out how to go from solo operator to investment company CEO.

Most solo operators focus almost exclusively on content.  They know, or think they need to know, how to do everything from plumbing to property management.  They work 24/7, have white-knuckle grip control on every detail, and can’t help anyone but themselves.

For the solo operator, there’s no light at the end of the tunnel, except to sell it all, buy bonds or carry back their equity, and retire.  Then they become part of the army of investors starving for yield.

To go big, the emphasis needs to be more on context.  What needs to be done and why, and not so much on how.  “How” is important, but better left to your team of technical advisors, vendors and staff.

It takes a different skill set to operate an investment company.  Many solo operators struggle to make the transition.  It’s done by changing the paradigm, then focusing on building the team.

The Great News…

It’s worth it.  By involving other people, you can do more faster.  You create jobs for team members and vendors.  You create better profits for more investors.  Most of all, you serve the communities you’re operating in by providing real estate for people to live, work or play in.

The World Needs YouBe a hero and save investors from low yield, high risk investments

There are people who don’t produce enough and have to rely, all or in part, on others for their needs.

The majority of people only produce enough to take care of themselves.  There’s nothing wrong with that, except that the world needs more.

A few exceptional people find ways to create abundance.  They build companies and portfolios that serve lots of people.  Obviously, the world needs more of these people.  And one of the fastest ways to become one is to learn how to put together partnerships to do more faster.

If you’re already one of those people, thank you!

If you’re not, then we hope you choose to take the steps necessary to become one.

It starts with learning how to put together partnerships, which is the theme of this re-released episode of The Real Estate Guys™ radio show.

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