12/30/12: Happy New Year! Your Real Estate Investing Plan

As 2012 fades into the history books and 2013 rises on the horizon of your life, it’s a great time to take a step back from the day to day hustle to think about the future you’re busy building.

Just like a sports team finishing one season and preparing for the next, it’s important to take a look back and see what worked and what didn’t, then assess where you are today and apply the lessons from the past to chart your course for the future.

Sound hard?  Maybe.  But it’s not mysterious and it’s certainly worth it!  After all, what successful business or sports team do you know that just wanders out into the future with no plan?

In studio to ring in the New Year:

  • Your ageless host, the Dick Clark of real estate radio, Robert Helms
  • Your happy hapless co-host, Russell Gray
  • The father time of real estate investing, The Godfather Bob Helms

The big picture of real estate investing and business is planning is being clear on what you want the enterprise to do FOR YOU.  This is important to make sure the business serves you and not vice versa.  So from the beginning of your planning project, take time to ask yourself what you REALLY want – in terms of lifestyle, finances, stress, etc.

Once you have your “dream” scenario in your mind, you need to take a look at the realities of your situation.  What you have to work with play a very important role in the strategies you use to build your portfolio.  People with great credit and documentable income have different options than those with poor credit who are self-employed.  Both can find success, but the paths are different.

On the same note, there are external realities which have to be taken into account.  You have no direct control over interest rates, availability of inventory, rental demand and overall economic factors.  Sure, you can look for optimal geographic markets and certainly some are better than others.  But the point is that external circumstances will open and close doors and require adjustments in your planning.

Navigating all of these variables is the art of planning.  It’s part science and a lot of creativity.  That’s what makes it so fun!

So as you look at the blank canvas of a New Year and consider what you want to build for your future, embrace the challenge of planning.  And you can start right here and now with this episode of The Real Estate Guys™ radio show!

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Who is Peter Schiff and why is he on the Summit at Sea?

If you really care about your money, chances are you’ve watched more than your fair share of financial shows.  If so, you’ve probably seen or heard Peter Schiff.  He’s a hard guy to ignore…not that you’d want to.  We know we’d be better off had we been listening to him back in 2006 when he accurately predicted the financial collapse.  Watch the video here.

So it’s probably obvious why WE would want Peter Schiff on board our 2013 Investor Summit at Sea™.  We want to spend quality time with him, hear what he thinks about the fiscal cliff, the debt ceiling, quantitative easing ( we call it “queasing”, because it makes us queasy), the Fed, and Keynesian versus Austrian economics, and more.  We’re also anxious to learn more about what Peter calls The Real Crash (the title of his recent best-selling book), which is the collapse of the dollar and government debt.

Scary?  Maybe.  But closing our eyes, or switching the channel on the remote won’t make these issues go away.  So like it or not, we are ready to learn from a guy we think has unquestionably earned the right to have an opinion worthy of our consideration. And maybe, we’ll learn some important strategies to protect ourselves and actually make great profits while everyone else is hitting the panic button (or the snooze button).

But why would Peter Schiff invest a week of his life to come hang out with us (and you, if you decide to join us)?  After all, we’re not paying him.

Peter told us he looks at the Summit as a rare opportunity to give more than a keynote speech to a large crowd or a short soundbite on a TV show.  And even though he has a radio program, we know from experience that radio is a one way conversation.  The Summit is about connecting with people face to face without cameras and microphones.

For Peter, just as Robert Kiyosaki told us about the 2012 Summit that he attended, the Investor Summit at Sea is a chance to spend quality time with a relatively small group of serious investors and a diverse faculty in a fun, semi-private and focused environment.  Plus, our event brings together a slightly different mix of speakers than Peter usually shares the stage with, which means new conversational dynamics and strategic relationships, both for him and everyone else.

If you’ve ever heard Donald Trump talk about how he avoided financial ruin and re-built his empire, you know how important building face to face relationships can be.   As Trump explains it, he was $900 million in debt and on the verge of ruin, when almost on a whim, he decided to attend a dinner party that he didn’t really feel like going to.

It turns out that he ended up sitting next to one of the bankers scheduled to foreclose (first thing on Monday!) on an important property , but after a personal conversation, Trump made a deal that played a pivotal role in saving the property and Trump’s future.  What’s scary, Trump says, is how close he came to not going.

The important lesson?  No one is going to come to your home and hand you or a solution on an opportunity.  The good news is that everything and everyone you need is out there somewhere.  You’re mission, should you choose to accept it, is to go out and find the resources and relationships you need to achieve your dreams.  If you’re reading this, you’ve already shown yourself to be someone who is out looking.  Good job!

We’ve been hosting these Summits for 10 years now.  We never know who’s going to be there, what will be going on in the world at the time we sail, or what the faculty will have to say about anything.  But we do know that good things ALWAYS happen when we get people together for a week in the right environment.

Will getting to know Peter Schiff change your life?  We don’t know.  But we invite you to come and find out…maybe some good Schiff will happen to you!  Click here now to learn more.

12/23/12: Ask The Guys – Education, Vocation and Agendas

If you want great answers, you have to ask great questions. 

Think about it.  When you go to the doctor, or visit your auto-mechanic, or work with any true professional who is helping you solve a problem, they always start with asking questions.  And the better the questions, the better the diagnosis and the better the chances of applying the right solution.

When you’re trying to solve the mysteries of real estate investing, it’s no different…you have to ask great questions.  That’s why we do Ask The Guys.  it gives you a chance to hear the questions other people are asking, to jump in and ask some of your own, and to learn to discern the difference between an effective question and one that really doesn’t help at all.

So with that tee-up, here’s who’s in the studio for this edition of Ask The Guys on The Real Estate Guys™ radio show:

  • Your audacious Answer Man and host, Robert Helms
  • Your questionable co-host, Russell Gray
  • The unquestionably wisest guy in the room, the Godfather of Real Estate, Bob Helms

Since our email letter bag is always stuffed, we jump right in…

Should you pay off your personal residence BEFORE purchasing investment property?

Great question.  Of course, there’s no one-size-fits all answer.  The answer lies in your personal investment philosophy, what you have to work with, current market conditions and the highest and best use for the money.  Because your personal residence is involved, it’s not just a simply math question.  So we take some time and talk through several important considerations.

How to find a non-biased, fee based real estate investment planner?

This questions comes up a lot because virtually all financial planning is done from a stock market centered perspective.  Most “planners” are either stock brokers, insurance salesman or both.  It doesn’t make them bad, but they get paid when you buy specific financial products and services.  Ditto for real estate and mortgage brokers who may hold themselves out as “trusted advisors”.  So we talk about some ideas for those of you looking for a sounding board for your real estate investment decisions.

Where to go to get the essential education to become a professional real estate agent or broker?

Another common question.  Lots of people who want to invest are attracted to real estate as a vocation also.  There are some advantages to doing this.  You get some favorable tax treatment, you are closer to the deals, you learn the tricks of the trade, and you get into more and better strategic relationships – all very good things.  There are some disadvantages too.  We talk about both.  And probably more important, we expound on the important difference between getting the education necessary to obtain a license, versus the education necessary to make a living in the business.

How to assemble a team of out of area advisors that will be loyal to you?

Another great question!  We say all the time, “Live where you want to live, but invest where the numbers make sense.”  We also talk about the importance of building a team ahead of building your portfolio.  Sounds great, but HOW?  We discuss this in depth on this episode.

Where to start when you inherit an investment property?

Some of us are fortunate enough to have relatives who were smart enough to buy and hold on to income property.  But when the inevitable occurs and you find yourself the owner of an asset you know nothing about, it can be as bad as winning the lottery.

How can winning the lottery be bad?  The winner didn’t earn the money, so they never grew into a person capable of managing it.  That’s why most people who win the lottery end up broke again.  The same can happen with inherited real estate.

The key is education, good advisors and patient diligence.  The same kind of things it takes to be successful in anything you do.

You have questions.  We have answers…on The Real Estate Guys™ radio show!

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The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training and resources that help real estate investors succeed. Visit our Feedback page and tell us what you think!

The World Didn’t End Today – Now What???

If you thought you were going to be whisked away from your daily grind by the doomsday apocalypse on the Mayan calendar, you’d better put you’re running shoes back on because we’re all still here!

Wait.  Hold on that.  New plan!

BEFORE you get back on the treadmill and start running in response to the tyranny of the urgent, how about doing something truly important?

A brand New Year approaches.  So NOW is a great time to focus on your future and making sure you spend your time living your life by design…and not by default.

So start of the New Year more focused, energized and clear about who you are, what you want and how you plan to get from where you are to where you want to go.  After all, if proper planning is essential to running a successful real estate project or investment portfolio, how much more important is good planning to living a meaningful life?

The answer is obvious, yet so few people actually take the time to plan their lives.  In fact, the average person spends more time planning their vacation than they do setting life goals.

But who says you have to be average?

Make your plans NOW to attend…

Creating Your Future – The 2013 Goals Retreat featuring Robert Helms
January 11th- 13th, 2013
DoubleTree Golf Resort in San Diego, California
Click here for more info

“If you don’t know where you’re going, any path will get you there.” – The Cheshire Cat in Alice in Wonderland

The secret to achieving what you want in life is knowing how to set effective goals…and actually investing the time to do it. It can’t be done piecemeal. It takes intense focus. Proper goal setting and multi-tasking are incompatible.

How many dreams are never realized because of the tyranny of the urgent?

The Creating Your Future event provides a proven goal setting process.  You will emerge from this retreat with greater focus, passion and motivating hope. But only if you’re there.

“The book you don’t read or the seminar you don’t attend can’t help you.” – Jim Rohn

It’s never convenient or affordable to stop “doing” and take time to set goals and make plans.  Yet how many businesses, sports teams or effective organizations move forward without goals and plans?  And those goals and plans are reviewed and updated on a regular basis!

“Obstacles are the frightening things we see when we take our eyes off our goals.” – Zig Ziglar

When you step back from your hectic life into this beautiful and serene setting, you will be guided through a powerful proven goal setting process.

“Let others be consumed with trivial pursuits and daily distractions, but not you.” – Jim Rohn

Sure, you could spend the second weekend of the new year taking down holiday decorations, watching sports or reconciling your bloated credit card statement.  But what’s the pay off on those activities in 10 years?

Isn’t it better to invest the second weekend of the new year charting your course for the rest of your life?  Join us!

Act now to reserve your space at this life changing event!  Click here for more info

12/16/12: The Return of Equity – The Fed Strikes Back

When the evil Debt Star blew up the mortgage and real estate markets, it was a major blow to the balance sheets of many investors and institutions.

The shroud of the dark side of leverage fell.  The foreclosure wars began.  Suck, it did.  And for many, suck it still does.

In response, Supreme Chancellor Bernanke was granted emergency powers.  The old republic of independent mortgage banks was wiped out and reformed into the Great Galactic Government Sponsored Enterprise.

Before long, the Fed’s balance sheet was bigger than Jabba’s fat Hutt.  And, through QE4ever,  it continues its epic growth to unprecedented proportions.  And while some are into that kind of thing, to us it isn’t a pretty sight.  But (get it?), we digress….

So what does all this mean to the real estate market and real estate investors?  To find out, we assembled three storied members of the Equity Council:

  • Your host and pilot of the Millennium Microphone, Robert “Helms Solo”
  • Your “not a Jedi yet” co-host, Russell “Luke Skytalker” Gray
  • The ancient and lovable Equity Master and Godfather of Real Estate, Bob “Yoda Man” Helms

For 800 years (or so it seems), Bob has invested for equity.  Yet there are things happening in this market that even he’s never seen…like 30 year fixed interest rates BELOW 4%.  Powerful, Bernanke is.

Now that Emperor Bernanke has announced to the world that he’s planning to print a TRILLION dollars in the next year (we didn’t make that up, we got it from quotes in the Wall Street Journal), and hold interest rates at essentially ZERO until unemployment is below 6.5% (which the Fed estimates will be in 2015), the question is….

So what?

To find out, we dusted off a VHS cassette and watched a prequel.  And we noticed the last time the Fed flooded the market with currency and credit (under former Fed Emperor Greenspan), it created an explosion of equity.

Apparently, the market is starting to buy it.  Home builder confidence is up.  New construction is starting in some markets.  And even though there are still tons of foreclosures and anemic economic growth, people are starting to spend money and buy properties.  In short, equity is happening again!  (Hopefully, that will be good for book sales.  There are still a few shopping days left before Christmas.  😉 )

Of course, having seen this movie before, we know there’s a ton of money to be made on the front end of a wave of equity growth.  We also know (school of hard knocks) that if that big wave of equity your riding crashes on top of you, you can quickly find yourself underwater and in danger of drowning in debt.

The main point of all this is that while you may or may not agree with all this “inside the beltway” market manipulation, when you’re living on Main Street or in the Outer Rim, all you can do is watch and do your best to go with the flow.  After all, the forces at work are a lot more powerful than you are, so (to borrow from a different sci-fi series) resistance is futile.

The good news is that even though many people (like savers, workers, small businesses…you know, “the middle class”) get hurt by all this “easing”, YOU don’t have to.  You can borrow essentially free money to purchase assets and income streams that grow with inflation plus throw off tax breaks that are even more sacred than the perhaps soon to be extinct homeowner’s mortgage interest deduction.

With so much distress remaining in the resale market (foreclosures are still holding down prices), you don’t have to settle for passive equity.  You can buy stuff in bad shape, pretty it up, and “force” the equity.  And if you get some appreciation, cash flow, tax breaks on top of that…well, more power to you!

So listen to Yoda Man, and “force the equity” young padawan.  Twenty years from now, you’ll be happy you did.

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The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training and resources that help real estate investors succeed. Visit our Feedback page and tell us what you think!

12/9/12: Competing in a Down Market with New Construction

Sooner or later, new construction has to happen – at least in residential markets where the population is increasing.  After all, those new people need someplace to live.

And while home builder confidence is improving, it’s still a far cry from “happy days are here again”.

So how can a small time real estate developer compete in a fragile economy?  We get some great ideas in this episode of The Real Estate Guys™ radio show.

In the studio to talk boutique residential real estate development:

  • Your well constructed host, Robert Helms
  • Special guest, real estate developer Beth Clifford

Real estate development is a great way to “force equity” (a term from our book Equity Happens for making money by changing the use of a piece of real estate).  But when the economy is soft, building properties “on spec” (building without a specific buyer secured) can be risky business.

Big developers look for growing economies that push populations out to undeveloped areas.  This is the famous “path of progress” everyone talks about.  But it takes a growing economy and population growth to feed the sprawl.

Usually development begins around some piece of infrastructure.  Early in a country’s development, it’s usually a river, ocean or some other natural resource or means of transportation.  Later, it’s around existing population centers and just pushes out (downtown to the suburbs to the country, which eventually becomes the suburbs).

At some point, the development sprawl meets some natural resistance point.  It could be physical (like a mountain range or body of water), political (like a border), or the population’s resistance to travel longer distances to access amenities near the center (commute times).

When this happens, the big developers have a hard time because they need big chunks of land to do their huge developments.   This opens the door for small, “boutique” developers to do “in fill” projects on smaller patches of land inside the already developed area.

So whether you’re in an up or down economy, there’s always opportunity for in-fill development.  But in a down economy, you need to be very careful about your project so you don’t end up sitting on inventory you can’t sell.  Soft local economies, especially those where existing product can be purchased for less than replacement cost, will not allow fat margins.  And carrying costs on unsold inventory can quickly erode those thin margins.

Beth says the key is to pick the right market, product type and price point.  Then manage your project carefully.  It may sound obvious, but there are some nuances Beth cautions us about.

In Beth’s case, she’s active in the Washington DC metro.  It’s dense (not just the politicians ;-)), so there are no big developers to compete with.  No one can find a big chunk of land to dump a bunch of inventory on the market.  That’s good for the little developer.

DC is also affluent.  The U.S. Government is a huge operation which pulls in lots of money from all over and dumps it into the local market.  It’s a very powerful market driver.  It also attracts a lot of people to the area, so when it comes to residential real estate you have little supply, high demand and good capacity to pay.  That’s our favorite recipe for equity!

So listen in as Beth shares her practical advice for creating new construction profits – even in a down economy!

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The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training and resources that help real estate investors succeed. Visit our Feedback page and tell us what you think!

12/2/12: Does a Career in Real Estate Work Today?

Real estate is a BIG and multifaceted sector of the economy.  And there are MANY different ways to make money in real estate, both as an investor and as a business owner or operator.

So, with so many people still looking for jobs, we thought we’d take some time to talk about some of the various ways people make money in real estate as their profession.

In the studio for this episode of The Real Estate Guys™ radio show:

  • Your professional host, Robert Helms
  • Your amateur co-host, Russell Gray
  • The Godfather of Real Estate, Bob Helms

Each of us has a background in a real estate related profession, in addition to our activities as investors and big-shot radio talk show personalities.  And through the radio show, we’ve met dozens of very successful business owners or operators who make their living in one of the various sub-sectors of real estate.  We bring all of these perspectives to the discussion.

Obviously, there’s no way in a one hour radio show to cover all the professional opportunities related to real estate.  But we cover a few.  And we talk a bit about WHY investors often end up in a real estate related profession as a means of enhancing their own investing.

As in any career choice, it’s important to not only understand the opportunities, but to understand yourself and your strategy in making a move.  No one likes to go from the frying pan into the fire.

That is, just because you can make a lot of money in a business, doesn’t mean you’ll like it.  And if you don’t like it, even if you find initial success, it will be hard to sustain your success over a long period of time because you’ll be fighting against your lack of interest.

So before you quit your day job to pursue riches in professional real estate, take some time to ask yourself (and people who know you well) about your strengths, weaknesses, skills and interests.  Then look at the actual work you’ll need to do on a day to day basis to be successful and honestly answer the questions:

  • Do I have what it takes?
  • Will I enjoy spending my time doing this?
  • Will this endeavor allow me to keep the main thing the main thing?

To find out what a profession truly requires, take some time to interview successful people in that space.  Find out about their skills, personalities and interests.  Then compare those with your own and consider whether it’s a good match for YOU.

Just as important is to stay focused on WHY you are going into this new profession.  Many investors get into real estate brokerage (as did the Godfather), mortgage brokering, or property management as way to get closer to people, deals and data that would be useful for their own investing.  In addition to making money, how else does the activity enhance your life?

One danger to watch for (and this is true in any profession) is if the job now takes up all your available time and energy, you may find yourself in the rat race of making a living while neglecting the building of your own portfolio.  This is the classic story of the landscaper whose own yard is overgrown.  Make sure you don’t get too busy in your professional life that you neglect your investing.  Unfortunately, it’s VERY easy to do.

Another consideration is what’s hot now.  Markets change and sub-sectors of real estate investing go through the ups and downs of market cycles.  So we take spend some time in this episode to talk about what’s hot and what’s not right now.

If you’ve ever considered making some aspect of real estate your full time vocation, tune in and find out if a career in real estate works today!

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The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training and resources that help real estate investors succeed. Visit our Feedback page and tell us what you think!