Peak Portfolio Management

 

portfolio management

Are you prepared to hit a peak in your investing cycle?

Whether you’re an old hand at investing or a beginner, you’re probably wondering what to expect in a changing political and social environment and how you can optimize market cycles to work for YOU.

On our latest show, we interview successful multi-family investor and Rich Dad advisor, Ken McElroy.

Ken currently owns over 10,000 units and provides safe, affordable housing for thousands of people.

We picked Ken’s brain so we could get YOU his best advice on managing multi-family rental units and figuring out what tenants want.

We also chat about what’s changing in real estate, how to get started as a new investor, and what to do when you’re at your peak.

In this edition of The Real Estate Guys™ show you’ll hear from:

  • Your peak pontificating host, Robert Helms
  • His past his peak co-host, Russell Gray
  • Award-winning multi-family investor and Rich Dad advisor, Ken McElroy

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Broadcasting since 1997 with over 300 episodes on iTunes!

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Your cycle as an investor

One person can look at the metrics and notice that unemployment’s down, the stock market’s up, and wages are trending higher. That person might think the market’s ticking up.

A different person can look at the same metrics and note that home ownership is down and inflation is up. They will conclude that the market’s trending down.

There are so many different metrics to measure market cycles.

Here’s the secret: there’s more than one cycle.

Rent prices can be up while occupancy is low. When home ownership trends upward, landlords will have fewer tenants.

The most important cycle is YOUR cycle as an investor. You might be still acquiring knowledge, OR you might be an investor at the top of your game.

Wherever you are personally as an investor, there are things you can do to optimize your holdings (and potential holdings).

We think Ken McElroy is a GREAT example of how to optimize holdings at the peak of a cycle.

Q&A with Ken McElroy

Ken and his partner, Ross McCallister, of MC Companies, were recently honored as one of the top 10 management companies in the U.S.

We sat down with Ken to get an insider’s view on what’s happening with multi-family units right now.

What’s going on in the apartment space right now?

For now, Ken said, “It’s time to sit back and let others buy.” Last year MC Companies only made one new deal, and he’s moving really slowly.

Not that that’s always easy. MC Companies has over 800 investors. With his partner Ross, Ken manages a team of 350 people who buy, manage, and close on properties.

To have the discipline to say no … especially when they have the equity … is difficult. But it’s what’s best for their company right now.

They wait until they see the right fit for their investing philosophy. Then they buy.

Not before.

How’s your tenant retention?

Ken hasn’t tested it this cycle, but across the nation, 96% of rental units are occupied. Occupancy is high across the board right now, with some exceptions in certain markets.

“What will really be interesting are the next few years,” says Ken. “The companies that are hunkering down now are the ones who’ll do really well.”

How are tenant expectations changing? What can investors change to add value and retain tenants?

Ken’s properties are a level below high end. What he’s really seeing demand for, he says, are basic services you’d come to expect: a safe community, garden spaces, pet options, and WiFi.

Those things are pretty easy to deliver. Especially when you take Ken’s approach:

“We’re continually trying to figure out what tenants want,” he said. “That’s what keeps people there.”

Tell us more about pets.

A couple years ago, Ken and his company realized they’d never had a problem with a pet.

So they took a leap and decided to completely embrace tenants with pets.

They’ve even formed a whole brand around it, including pet clubhouses and pet parks in every community.

They’re now known as the go-to management company for pets.

It’s all because they went back to basics, Ken says. They looked at what residents want, and they asked themselves, “What could we do differently?

Ken’s tenants have, as you can imagine, a doggone good time.

What are some technological changes you’re seeing in the real estate market?

Ken pointed us to what’s happening in retail right now: thousands of big box stores are closing, while online retailers are booming.

People are buying differently now … and that includes real estate.

It’s possible to find and bid on properties electronically, rent apartments online,  and even buy properties … all without physically seeing them.

Ken projects brokers will need to make themselves resources in an age where heaps of information reside online.

You figured out a way to show apartments without labor. Tell us about that.

Ken’s company has actually moved away completely from paid advertising.

Their strategy now has two parts.

First, they’ve moved toward community and blog-based awareness. Ken has a team that manages his company’s digital presence and writes blog posts.

As soon as they started blogging, he told us, their traffic went up.

Second, they’ve reallocated the money they spent on advertising to call centers that help answer questions and set up appointments.

Interested potential tenants can make an appointment and then just show up at the property. Although every property has an office with a property manager or two, prospective tenants can look at open model units on their own.

This gives people the option to engage how they want, then ask questions after. And, it means a property manager is always in the office.

What’s your advice for newbies?

“I believe in my soul that real estate investment is the greatest thing,” Ken told us. “There’s nothing better.”

Ken’s lifestyle attests to that. He takes several months off every summer to travel with his family … and the money still comes roaring in.

For Ken … and for many others … real estate investing means financial freedom.

Ken’s advice? “Start how I started.”

Ken started with a single two-bed, two-bath condo. He worked on the ground, getting to know every aspect of the real estate business.

Fifteen years later, he’s living proof of the benefits of real estate investing. He now co-owns a company with 350 employees, builds his own units, and has hundreds of investors.

To be successful starting out, first get educated, Ken says. “People invest in us for what we know and what we stand for.”

Then, “Jump in.” You have to start somewhere.

The timing matters, the market cycles matter, yes … but ultimately, you just have to DO it.

A stellar example of smart, successful investing

We’ve learned a lot from Ken over the years, and we think Ken has a lot to offer to you, too.

Ken was the first person to help us think about strategic market selection. We realized there was a strategy to choosing markets.

Success wasn’t actually just dumb luck.

Ken was looking at geographies in a way that made sense, and now he’s looking at market cycles the same way.

He’s not buying right now … but not because he doesn’t have the money. He’s simply unwilling to compromise his company’s needs.

Of course, if you’re like Ken, the temptations you’ll face are many.

There’s pressure to perform from investors and employees. There’s the thrill of the deal.

Not giving in to those temptations is one of the reasons Ken is so successful.

He’s figured out a way to channel his DESIRE for acquisition into his current portfolio … by fixing, leveraging, remodeling, improving, and generally taking his investments to the next level.

Ken uses his time and his team to focus on ways to bring quality up and costs down so he can squeeze every penny possible from his holdings.

And he never neglects the human factor. His properties provide a great environment for tenants.

When the market pulls back, he’ll be prepared.

We like to say that “There’s no perfect investment, but real estate is the most perfect you can get.”

Ken started his entire journey with a single duplex. Look where he is today.

Wherever you are in your investment cycle, we hope Ken’s journey inspires you!


More From The Real Estate Guys™…

The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training and resources to help real estate investors succeed.

Market Moves of Major Players

When big companies like Costco, Walmart, Home Depot and McDonald’s start moving into a residential real estate market it’s because they expect growth.

And they’re usually right.  After all, they have the budgets to buy the best data and hire the smartest analysts.

Some of the data the consider includes migration trends, infrastructure plans and demographic shifts.

Do people want to move there?  Are they Major corporations like Southwest and Hilton carefully analyze market data before making moves into places like Belize.the RIGHT demographic?  Are there freeways, airports, and other key pieces of infrastructure to support a growing population?

When everything checks out, these big organizations begin to move in… to get in ahead of growth.

Savvy residential real estate investors watch these moves … and then start to investigate.  It’s a way to piggy-back on the hard work paid for by the big players.

For those interested in resort property investing … and there are some compelling reasons to consider it right now … the principle is the same, but the players are different.

Resort properties make their money renting to tourists, not tenants.  The migration patterns aren’t gleaned from U-Haul statistics, but from airlines.

The companies moving in aren’t big box retailers, but rather big brand hotels.

So when you see a major airline adding flights to a resort destination, it’s in response to growing demand.

That’s a clue.Major airlines like Southwest Airlines, Delta and American Airlines are adding flights into Belize

Ditto for when a major hotel brand plants it’s first flag in an emerging resort market.  They have strong reasons to believe the tourists and occupancy are there or soon will be.

When those things are happening at the same time, in the same market …. SOMETHING must be happening to attract this attention.  And it is …

Tourism to Belize continues to boom.  And major players are making moves to take advantage of Belize’s growing popularity.

Of course, there’s a LOT more to this story than can be told in a few hundred words.

That’s why we’re heading to Belize for a fun-filled, educational field trip … and YOU are invited to join us!

Come see what makes this tropical paradise one of the most exciting resort property market in the Western Hemisphere … and why major players are making their moves.

Ambergris Caye Belize is one of the most exciting resort property markets in the Western HemisphereMany investors use low-end residential properties as a vehicle to build wealth so some day they can own and enjoy a beautiful resort property.

Imagine buying a resort property as an investment and still enjoy some personal use.

It’s possible.  And it starts with picking the right market, meeting the right team, and finding the right property.

The timing’s never been better.  Tens of thousands of baby boomers are retiring every day.  Studies say many wish to travel … maybe even retire … abroad.

Belize is a popular destination because it’s close the U.S., English-speaking, friendly to Americans … and REALLY beautiful!

You’re going to LOVE it.

Click here now to discover enchanting Belize!

Prospering on the road to ruin …

Social justice and equality, like their inverse, social injustice and inequality … can be polarizing political themes.

But this isn’t a political commentary, so keep an open mind!

Robert Kiyosaki has been warning for many years the rich would get richer … the poor would get poorer … and the middle class would be squeezed.

In the U.S., metrics like the historically low labor participation and home ownership rates, high levels of consumer debt, and stagnant-to-falling real wages are all indicators of where the middle class live.

The reasons and blame for these results are debatable.  There’s plenty of both to go around.  We have our ideas on the matter … and you may have yours … but the data just sits there.

Meanwhile, stock and bond markets (notwithstanding the recent tick up in rates), have powered upward … making the rich much richer.

So the financial condition and future of America FEELS very differently, depending on which side of the inequality divide you’re on.

A quick glance at the election map also illuminates the divide … as does social media and daily news.

Today, the U.S. has President Trump (and might have had President Sanders) largely because people being squeezed out of the middle were looking for a non-establishment answer.

But what if the problems … and the solutions … are more systemic and less political?

If the Titanic is sinking, it doesn’t matter who the captain is.

And if it’s not, then it still probably doesn’t really matter.  Sinking is caused by the ocean and weather … things outside the captain’s control.

Now before you tune out, this is NOT a doom and gloom piece.  We’re too optimistic for that.

But it’s smart to look at what’s happening and ask what it means to real estate investors.

So far, low home ownership rates have meant increased demand for rentals.

That’s GOOD for real estate investors … and rental growth and occupancies have proven this.

High bond prices brought low interest rates, which decrease debt service costs, and improve cash flows.

Also GOOD for real estate investors.

High stock prices have created paper wealth in 401ks and stock portfolios.

Ditto for home prices.

Some of this equity has found its way into real estate private placements, which has been GOOD for real estate syndicators.

Like Peter Schiff says … “Good economics is bad politics, and good politics is bad economics.”

So even if economic inequality is bad policy, there’s still a lot of investing opportunity inside of it.

Economic issues in the second Bush administration gave rise to the Obama administration.  Issues during the Obama administration gave rise to the Trump administration.

So again … MAYBE the issues aren’t political, but systemic.  And we should study, debate, and react to the systemic issues … perhaps more than the political issues.

That’s what James Rickards contends in his latest book, The Road to Ruin.

We’re not all the way through it, but so far it’s a REALLY interesting read … as are all Jim’s books.

Of course, with the Super Bowl fast approaching, no commentary this week would be complete without a football analogy.  😉

So let’s think about a game plan for approaching investing in any environment …. even one where there are systemic problems and the potential for radical political change.

A successful game plan addresses offense, defense, and special teams.  And once in the game, it’s about focus, execution, and adjustments.

Warren Buffet says rule No. 1 in investing is “Don’t lose money” … and rule No. 2 is “Don’t forget rule No. 1.”

In other words, defense is important.  The old football adage is “defense wins championships.”

In Jim Collins’ now classic book, Good to Great, he says you must confront the brutal facts.  Yet, most people don’t want to.

Investors don’t like listening to the bears. We like to think we’re always going to come out on top, which pushes us to keeping investing.

But you MUST.  It’s how you prepare for the worst, even while you hope and work for the best.

Defensive investing means moving assets away from high risk environments into lower risk places … maintaining adequate liquidity stored in safe places … and being diligent in managing cash flow.

Of course, while it’s true, “If they don’t score, we can’t lose” … if YOU don’t score, you also can’t win.  So offense is important, too.

The BEST offense is to take what the opposition gives you.  That is, it’s typically not a good idea to show up and just run your script.  Conditions change.

The best teams enhance their probabilities for success by creating match-ups … pitting their strengths against weaknesses in the opposition’s defense.

As we’ve seen, economic weakness can create scoring opportunities.

MANY real estate millionaires were born out of the 2008 financial crisis …the same crisis that wiped out those only playing offense when conditions changed.

So trends in economics, demographics, geo and local politics, technology and other factors, all take something away and give something else.

Your equity-building mission is to look for high probability match-ups and run some plays.

Sometimes special opportunities arise that aren’t directly part of your wealth preservation or wealth building game plan.  It’s more chaotic and free-form.

Sometimes it’s more about fast reactions and smart in-the-moment judgment.

When unexpected situations arise, your ability to quickly assess and respond can prevent disaster or help you capitalize on rare opportunity.

But you need to be smart, decisive, and quick to act.

We’re in the final phases of selling out our 15th Annual Investor Summit at Sea™.  This is where we gather each year with thought leaders, subject matter experts, and active investors from around the world.

We talk about what’s going on in the world, what the trends are, where the challenges and opportunities are … and how to increase probabilities for success.

When we arrive for the Summit, the world will be different than today.

We’ll be about 70 days into the Trump administration.  We’ll have a lot more visibility into what America will be doing over the next four years … and how the world is reacting.

It’s our annual “half-time” intermission … a break from the day-to-day action …to huddle with coaches and fellow players to analyze and adjust game plans.

There’s still room for you on the Summit and we’d LOVE to have you.

But whether you join us, or find your tribe elsewhere … we encourage you to listen to great thinkers. Talk with them if you can … and schedule intermissions away from the daily game to look at the big picture and adjust your game plan.

If Rickards and Kiyosaki are right, there could be an iceberg on the horizon.

But remember … some folks survived the Titanic.  We’re guessing they were the ones who saw the problem sooner, heeded warnings, and got into the lifeboats early.

Until next time … good investing!

More From The Real Estate Guys™…

The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training and resources to help real estate investors succeed.

Robert Kiyosaki on Why the Rich Get Richer and How You Can, Too

 

kiyosaki

When you look at successful people, from the outside, it might seem they’ve just gotten lucky.

We think “luck” is what happens when you’re prepared at the right time. There’s no such thing as an “overnight success.”

Your ability to be successful in real estate depends on your ability to get educated, take action, and not be paralyzed by fear.

We’re hoping you get very wealthy from real estate investing—but don’t make the mistake of thinking it will happen overnight.

You have to put in the work. And choose your teachers wisely.

On our recent show, we chat with Robert Kiyosaki, well-known author of mega-bestselling Rich Dad, Poor Dad, and one of our favorite teachers.

He’ll give us some insights about why the rich get richer—and how you can get richer too.

In the Rich Dad studio for this rendition of The Real Estate Guys™ radio show, the three R’s of real estate investing … 

  • Your rich-and-getting-richer host, Robert Helms
  • His riches-to-rags co-host, Russell Gray
  • The richest best-selling personal finance author of Rich Dad Poor Dad, Robert Kiyosaki

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Broadcasting since 1997 with over 300 episodes on iTunes!

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Special preview: Three books from Kiyosaki and team

We were lucky enough to get a preview of THREE books that Robert Kiyosaki and team have coming down the pipeline.

  1. More Important than Money, written by the advisors of Robert Kiyosaki.

Readers will get nuggets of wisdom from Kiyosaki’s team of experts, bright minds like Ken McElroy, Andy Tanner, Garrett Sutton, and Tom Wheelwright.

In real estate, and in life, it’s crucial who your friends are.

In fact, the quality of your relationships is more important than money. The value of the people you hang out with—if they’re the right people—is priceless.

This book will provide crucial insights into those relationships.

  1. A new book from Kiyosaki himself called Why the Rich Are Getting Richer.

If you’re listening to our podcast, you’ve probably read Rich Dad, Poor Dad. If you haven’t yet… we HIGHLY recommend it.

Robert describes his new book as Rich Dad, Poor Dad “graduate school.”

This book goes one level deeper into why the rich get rich (and how you can too).3. A special 20th anniversary edition of Rich Dad, Poor Dad.

Don’t worry—the classic content is still the same.

But this edition includes brand-new material. Robert takes a look back at the economy of the past 20 years—and projects what will happen in the next 20.

This is a book that helps people take control of their lives. If you haven’t read it yet, perhaps the 20th anniversary of this finance gem is a great time to pick up a copy!

How to prepare for the unknowable

Of course, none of us have a crystal ball. But a lot of Robert Kiyosaki’s work is about preparing for the future.

We asked Robert to weigh in on a timely question: How can we prepare for what is unknowable?

He was kind enough to give us some sage words of advice.

  1. “Choose your teachers wisely.” In this case, history is your teacher.

There are a thousand possibilities, but in the end, the history of every paper currency only goes one way: down.

But wait, you say… I read in the news that the dollar’s at an all-time high! Well, yes—compared to other paper currency. Historically, Robert reminds us, “every paper currency has gone to its true value, zero.”

  1. “Be entrepreneurs, be smart, study, choose good teachers, have good teams, support each other, and do the best you can.”

Many people are highly educated in terms of degrees, but have no financial education. Educate yourself!

  1. “Risk is a four-letter word.”

In our last podcast, we talked about risk. Robert re-emphasized our point that risk can work to your advantage. He reminded us that financial education and experience give you control over risk.

Educate yourself: More Kiyosaki insights

We’re all swimming in the economic sea. If you don’t have any education, you don’t understand the way the wind is blowing and can’t see tremors forming.

Preparing for the future is really all about educating yourself. Like our motto says, it takes Education for Effective Action™.

When we talk about Rich Dad, Poor Dad, we sometimes tend to wax a little poetic.

That’s because we think this book is much more than informational. It’s  transformational.

To be truly successful in the real estate investing world, you have to work within the right paradigms.

The problem is paradigms become ingrained over time. They don’t break easily.

Take a look at the rise of populism in the U.S. and Europe. People are uncomfortable. “They know something’s wrong at the gut level,” says Robert Helms.

We don’t necessarily think the answer’s political. The answer is in educating yourself, in making that shift so you can see into the future.

You have to be able to sense what’s coming. “This is a time to make new friends, get new ideas, and look at the world differently because there will be more opportunities,” says Robert Kiyosaki.

There are two sides of the coin: risk and control. You have to switch the paradigm and learn to stand on the edge of the coin.

For some people, the best advice is to go to school, get a job, and save money the traditional way. But in Robert Kiyosaki’s words, “The rich don’t work for money.”

The rich flip conventional thinking on its head. Debt becomes a good thing. Getting a job and even a college education? Maybe not as good as you think.

“Debt is like a chainsaw. If you don’t know how to use it, stay away. If you do know how to use it, debt is wonderful. It’s one of our favorite tools in our toolbox,” says Robert Helms.

It’s this kind of thinking that will help you survive the future.

“When the chasm opens up,” says Russell,” you have to decide: will you fall on the side of the rich or the poor?”

With a rapidly narrowing middle class, flipping the coin on its side is a necessity.

Start educating yourself today! Transformation is a process. Pick up a book, talk to your tribe, or…

Join us at the Investor Summit at Sea™

An ESSENTIAL part of being a smart investor is hanging out with the right people.

That’s why we created the Investor Summit at Sea™. It’s an opportunity for YOU to meet great people and get great ideas.

This year, we’ll have some amazing faculty, including Peter Schiff, Tom Hopkins, and G. Edward Griffin.

If you don’t want to fall off the back of the bus into the poor pile, or you’re tired of being part of the squeezed middle class, come spend a week with people who are already rich … and getting richer!

Think about the time you’d spend reading a book like Rich Dad, Poor Dad and the knowledge you’d gain from it.

Now multiply that times 100.

There will be 100 different investors, insights, and paradigm shifts. The Investor Summit at Sea™ isn’t just an afternoon spent reading. It’s a WHOLE WEEK for you to soak in knowledge from some of the most brilliant, hands-on investors.

We’ve created the opportunity for you to spend an entire week wrestling with new ideas and networking with new people. Come join us!

We’re more than 80% sold out, but there’s still a room left for you.

Tune in next time on The Real Estate Guys™ radio show to hear Kiyosaki advisor Ken McElroy on what’s happening in the world of multifamily units and beyond!


More From The Real Estate Guys™…

The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training and resources to help real estate investors succeed.

Real estate prices plunge … and soar

Can real estate crash … and boom … at the SAME time?

Sure.

We were reminded of this when we dug into the following headline …

New York Real Estate Prices Plunge in 4Q As Listing Days and Discounts Soar
Maybe you don’t have any plans to invest in New York real estate … now or in the future.  Neither do we.

That’s not why this headline caught our eye.

Sure, we look for clues in the news to see challenges and opportunities in those markets and product types we’re interested in.

But we also look for patterns and principles … and consider what they teach us about strategic real estate investing, even when the news is about markets we’re not currently following.

So there are a few reasons why this article attracted our attention.

First, we know the world’s wealthy like to store chunks of their wealth in premium real estate in non-domestic markets with strong property rights.

If you’re an American, you’d look outside the United States.  Many non-U.S. wealthy favor U.S. markets. Chinese and European investors tend to like New York … Manhattan,  in particular.

Of course, activity in any specific market is a blend of local and out-of-area demand.  To really understand what’s happening, you need to look into the various components of demand.

From the report the article refers to, we can’t tell what role foreign demand played in the decline of Manhattan prices.

We can’t simply assume a decrease in foreign demand caused prices to drop.  In fact, based on data in the report, we’d expect the change probably was not primarily due to changes in foreign activity.

But we don’t know.  You can read the report yourself and see what you think.

The more important principle for markets you’re tracking is that when prices move … either property prices or rents … it’s worthy of digging in to find out WHY.

If you determine the cause is temporary, it might be a great time to move into acquisition mode … so you have boats in the water when the tide comes back in.

Another thing to look at when the tide recedes … where the demand flowing?

In this case, the pricing collapse referred to is happening in Manhattan,  a sub-set of the greater New York market.  Did the demand flow elsewhere?

Citing a Bloomberg report, the article also says …

“… while buyers are abandoning Manhattan en masse, Brooklyn seems to be the key beneficiary with purchases there soaring 22% YoY and median prices climbing 15%.”
Again, it’s not Manhattan and Brooklyn we’re necessarily interested in.  We’re simply looking for patterns and principles we can apply to any market we’re observing.

The contrast between Manhattan and Brooklyn reinforces the notion that when it comes to real estate markets, there will always be winners and losers.

So a savvy real estate investor should be able to make money in any economic climate by paying attention to these flows.

Does that mean in soft economic times, high-priced markets always lose and low-priced markets always win?

If only it were that simple!  But that’s what makes market analysis and selection so fun.

You have to consider economics, demographics, politics, supply and demand factors, social patterns, taxation, business climate, job and income growth, quality of life, and market sentiment.

That sounds intimidating, but it’s not as tough as it seems.

In fact, it’s largely common sense. After all, you’re a human being. You can relate to why another human being would prefer to live, work, or run a business in one place over another … when you see challenges and opportunities from their perspective.

That’s why doing your homework is important … both statistically and anecdotally.

We like to research markets from afar, and then go there and put boots on the ground to affirm or refute our long-distance assumptions.

Stats only look in the rear-view mirror.  Data tells you what already happened. It’s just one valuable point on a trend line … the past.

But when you add feedback from people who are in direct contact with the market right NOW … bidding on properties, marketing properties, screening tenants … you get another valuable point on the trend line … the present.

And just as businesses are wise to listen to feedback from frontline employees … folks dealing with customers and operational issues on a day-to-day, real-time basis … real estate investors are wise to listen to their property managers, real estate agents, turnkey providers … even the tenants.

These are the boots-on-the-ground folks who are best qualified to say what’s happening NOW.

Your job is to consider the past and the present in the context of macro-factors and your personal objectives.  Then make appropriate moves.

The good news is that real estate markets and trends typically move and develop slowly. 

So there’s usually plenty of time to adjust … to get in when opportunities are emerging … and get out or restructure early as challenges start showing.

But ONLY if you’re paying attention.

The bad news is it’s easy to fall asleep at the wheel.

So as you’re planning the new year, be sure to schedule some time to monitor the news coming out of markets you’re interested in. 

Dig deeper into the reports and data to see what they’re saying.  Then schedule touch points with your team in the markets you’re in or considering.

If you don’t have relationships in the markets you’re interested in, get to work on developing them.

Staying informed and in touch is important and easy to do.  You don’t need a fancy MBA, PhD, or genius IQ.

However, like most things important but not urgent, “easy to do” is also “easy not to do.”  Just remember, life doesn’t give you credit for intentions … only for actions.

Scheduling time converts intentions into actions.

A person of average intellect who acts will always surpass a genius who fails to act.

Until next time … good investing!

More From The Real Estate Guys™…

The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training and resources to help real estate investors succeed.

Smart Risk Taking for Real Estate Investors

 

tribe

There’s no getting around facing risk in life – and real estate.

Whether you’re risk adverse or a risk lover, the best way to approach risky business situations isn’t to jump, guns a blazin’.

Being prepared to take risks SMARTLY is half the battle

Your BIGGEST DANGER as captain is failing to educate yourself and failing to ask for help. Know the seas you navigate, and rely on your crew (your tribe!) to pull you away from shipwreck.

Our latest episode helps you get in touch with your “rings of risk”  and evaluate whether YOU are taking the RIGHT risks, the right way.

In this edition of The Real Estate Guys™ radio show, you’ll hear from:

  • Your risk-taking host, Robert Helms
  • His deal-making co-host, Russell Gray
  • Our always-honored guest, the Godfather of Real Estate, Bob Helms

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Discover the three rings of risk

Before you take ANY risks at all, you need to evaluate your personal investment philosophy.

Having a personal investment philosophy doesn’t mean all the investments you make will fit in one box.

The investments in your personal portfolio should fit into three rings of risk:

  1. a conservative base
  1. a slightly riskier but still cautious second ring, and
  1. a high-risk outer ring

In your core set of investments, you DON’T want to take much risk. For example, you don’t want to risk losing your own house or the money from your kids’ college funds.

Determine your starting place. How much money do you need to have on hand for personal living expenses in case something goes wrong? Three months’ worth? A year? Are you comfortable having a mortgage on your primary residence, or should that be investment be loan-free?

In the next ring, you can start taking a little more risk and using a little more leverage.

If you lose some money in, say, your core real estate investments, it should be disappointing, but not devastating.

Once you’ve made some solid investments and see cash flow, consider jumping to the outer ring. To operate in this ring, you have to be okay with losing 100% of the cash you put up.

You can do this because those losses shouldn’t touch your personal funds AT ALL.

You have a ring of security between your high-risk investments and your personal possessions.

Ask yourself: What degree of risk is reasonable for me and my family? Before I make this investment, what else could I do with this money? With what risks? Am I prepared for every possibility? What will happen if everything goes according to plan? What will happen if something goes wrong?

Taking smart risks

Here’s a question for you to consider. Which is riskier: to buy a plot and build from the ground up, or to buy an existing building?

We asked this question to some of the investors and got a wide variety of answers.

The truth is, there’s no right or wrong answer in this scenario. Either choice takes on different kinds of risk.

Everything you do as a real estate investor involves risk. The goal isn’t to AVOID risk. It’s to be smart about the risks you take.

A KEY part of being a smart risk taker is investing in things you understand and have a degree of control over.

If you can’t do your due diligence on an investment because you don’t even know where to start, that’s probably a BAD investment.

To be a smart investor, you have to be self-aware.

Taking smart risks isn’t just about the inherent risk in a property. It’s about YOU and how much YOU can handle.

Also keep in mind that sometimes saying “yes” to the good can cost you the great.

Don’t be afraid to say no.

Ask yourself: Where am I in my life? What are my needs? My capabilities? My ability to engage on this project? My knowledge? Is my team up to par?

Balancing the investor emotions scale

We’ve established that risk is omnipresent in real estate investing. You can’t make a real estate investment without some degree of risk.

To take smart risks, you need to weigh the upsides and the downsides of a potential investment, then make an educated risk assessment.

You also need to think about your own emotional makeup.

Investor emotions run on a scale from greed to fear. In between is rationality.

To be a smart investor, you have to find your own middle ground of rationality.

How do you handle uncertainty? If your answer is close to “not well,” perhaps smart investments for you would have more predictable outcomes and a high degree of control.

But leaning too heavily toward the fear side of the scale won’t get you anywhere.

If your goal is to make money, you have no chance if you don’t make a deal.

On the other hand, tipping too much towards greed can turn making deals into personal badges of honor.

When you have your eye on the prize, it’s easy to lose sight of rationality.

Whether you’re too afraid or too greedy, letting your emotions run high impacts how you behave, which impacts your decisions, which ultimately impacts your bottom line.

Smart investors have tight control over their emotions.

They strive to always operate in a zone of low emotions and high intelligence.

When a deal comes, these investors are the ones who make good, pragmatic, and well-informed decisions.

Ask yourself: Can I stay composed about this investment? How do I handle uncertainty? Do I get carried away when I’m making a deal? Can I evaluate this decision rationally instead of emotionally?

Nine ways to mitigate risk

Risk in the real estate investing world is not going away.

But there are some things you can do to mitigate your risks.

Our list of nine:

  1. The obvious one: get insurance.
  2. Hire the right people (don’t hire cheap; hire the best). Make sure your hires hit all three Cs: character, commitment, and competence.
  3. Educate yourself. Before jumping into a new market, get familiar with it. Jumping into an investment with no background knowledge is an unnecessary risk.
  4. Be self-aware.
  5. Have a strategy.
  6. Have the discipline to execute that strategy.
  7. Choose your partners carefully. You can’t have someone hitting the panic button every time something goes sideways.
  8. Know there’s not one right way to do things.
  9. Most importantly, THINK THROUGH every decision you make. Be a sober decision maker.

Risks come in two varieties: those inside your control and those outside of it.

You can’t obsess about the risks outside your control.

You CAN make the best available decision based on the risks you can control.

Think of yourself as a boat in the big ocean of economic activity. When you can learn to understand the tides and winds, you put yourself in a better position to navigate when it gets stormy.

You can’t mitigate a risk you don’t understand.

Our final note for today: embrace risk smartly, and great things can happen!


More From The Real Estate Guys™…

The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training and resources to help real estate investors succeed.

SO much insight in just one chart …

Here’s a chart residential real estate investors should find interesting…

Source:  Unprecedented Spending Trends in America, in One Chart, an article from HowMuch.net, a cost information website.

If you can’t quite make it out on your screen, go ahead and click on it.  Don’t worry, it won’t bite.  But you’ll want to see the labels.

So why did this chart tickle our fancy?  And why should real estate investors care?

Great questions!  Glad you asked.

The first and most obvious are the ginormous pink lines on the far right.  That’s housing.  As in, “little pink houses for you and me.”

Not only are the numbers big, but there’s a long-term trend.  Up.

BUT … you can see the last 10 years have slowed.

Hmmm … does that mean housing is becoming more affordable?  Or could it mean it’s becoming LESS affordable because people have to spend a bigger chunk of their budget elsewhere?

The source article noted, “ … spending on food and clothing has fallen when adjusting for inflation while spending on education and healthcare has risen quickly.”

That’s interesting.

How much control do consumers have on the costs of education and healthcare?  For food and clothing?  And toss in transportation, which is also down.

And then notice recreation and entertainment.  A little dip recently, but pretty stable.

What does all this mean?

Think about this:  A person’s values can be fairly accurately inferred through an analysis of their calendar and checkbook.  Where you spend your time and money says a lot about you.

And when you understand someone’s values, you can position yourself to provide goods and services they are likely to buy.

So this chart is like looking at the American consumer’s checkbook.

It seems Americans value housing, healthcare, education and entertainment more than food, clothing and transportation.

Of course, none of these are really optional for basic survival needs, except possibly education and entertainment.

But most of these spending categories can be dialed up or down based on preferences … and some are more controllable than other others.  After all, when you’re sick, you’re sick.  You need healthcare.

But if we use this snapshot into the collective American consumers’ spending to think about the types of real estate most likely to be in demand, here are some thoughts …

Affordable housing markets and properties

Seems like the willingness or ability to spend on housing is slowing, though the need will never go away.  When squeezed, people usually move to a more affordable area or property.

Lots of renters

This has been going on for a while … and if interest rates continue to tick up faster than real wages … saving down payment money and affording a mortgage payment will become even harder for debt-laden consumers.  So they rent.

Healthcare related real estate

Another niche we’ve been talking about continues to look appealing.  Maybe you’re not ready to build a hospital or medical office building, but you can invest in communities with a strong healthcare economy.

You could also turn a McMansion into a residential care home.  This is also a way to derive rents from affluent people and their long-term care insurance policies.

Entertainment-related real estate

In good times and bad, people pay to escape their reality for a little while.

We’re not talking movie theaters and restaurants.  People can watch movies at home.  And we’ve already seen a downward trend in food spending.

You don’t have to build a theme park, but you can invest near one.  Vacation rentals and resort properties are another option for generating entertainment related income from real estate.

The trend is your friend

This old stock trading adage can be applied to real estate as well … except that real estate moves slowly.  So slowly in fact, it’s easy to fall asleep at the wheel.

But if you pay attention, you can see long term trends in demographics, economics, supply and demand, and public policy … which create an ebb and flow of long-term investment opportunities.

So keep your day job and enjoy your daily life … but from time to time, take a look at long term trends.

Think about where the opportunities are and what moves you can make to put yourself in the path of profit.

And if you’re REALLY motivated, attend conferences and trainings where you can hear from expert analysts and experienced investors, and immerse yourself in thought-provoking conversations.

After all, based on the law of large numbers, just one good idea acted upon in real estate can be worth tens of thousands … perhaps even hundreds of thousands of dollars.

Of course, the good idea you don’t discover can’t help you.  So keep learning!

Until next time … good investing!

More From The Real Estate Guys™…

The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training and resources to help real estate investors succeed.

Tribes – Why and How to Find or Build Yours

 

tribe

No matter how brilliant you are, going solo in real estate won’t get you very far.

It’s a team effort, which is why you need a tribe.

We’ve joined (and founded!) many tribes, and  encourage you to do the same.

Have you ever considered you are the sum total of the people you spend time with? The people and habits in your life can either drag you down (misery loves company!) or help you progress.

YOU CHOOSE your tribe, or the people who get to take up time and space in your life.

We want your tribe to bring you up—to help you learn from others, grow as an investor, and connect with like-minded folks.

Today on The Real Estate Guys™ show, coming to you from sunny San Diego, you’ll hear sage advice on finding your tribe from:

  • Your shy-no-more host, Robert Helms
  • His frog-kissing co-host, Russell Gray
  • The godfather of real estate investing, Bob Helms

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Broadcasting since 1997 with over 300 episodes on iTunes!

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Find a balance between diversity and common goals

We just wrapped up our yearly goals retreat in beautiful San Diego.

While we were at the retreat, we had the awesome opportunity to observe our own tribe in action.

We were also able to ask ourselves: What makes our tribe so great?

We realized our tribe worked well because it was diverse. It wasn’t an echo chamber, but instead, a group of people with different perspectives united by a bond of commonality.

Take a group of people with similar values but diverse perspectives, and you get an incredible synergy.

It’s that synergy that helps you know when you’ve found your tribe.

“You know it’s your tribe because of how you feel,” Russell tells us.

Yes, it’s that simple.

Step out of your comfort zone

Do you feel embarrassed, overwhelmed, and underqualified to show up in a room of investors?

If so, THAT’S OKAY!

Once upon a time, we felt that way too.

But we want you to know that new investors can be invaluable to a group.

You help people farther down the road understand new perspectives.

And you allow others opportunities to refine their thought processes and share information they’ve acquired.

If you think you can’t network because you’re “too shy,” we have three words for you: GET OVER IT.

Step out of your shell. Push yourself out of your comfort zone.

We’re “shy guys” too, but very early on we realized that being shy didn’t serve us in the world of real estate investing.

So instead of hiding out, terrified of rejection, we faced our fears and did some hard things. We still do, every day!

Put yourself in environments where you’ll be surrounded by successful people.

Then ask yourself whether those environments are working for you.

If you realize you’re in a place you don’t want to be, don’t stick around! Cut your losses.

Realize that you might have to kiss a few frogs before you find your ideal match.

You might even have to kiss a lot of frogs!

Begin with little things, one-time events: paid seminars or talks by published authors.

Attendees at these events WILL have commonalities with you. Start there.

Then latch on to the people you want to spend more time with. You never know where things will lead.

One person can open up a whole new world of connections and new tribes.

Start with your values

The basic gist of finding your tribe is to set course, then be smart about where you’re headed and what you’re doing to get there.

How do you set course? The VERY FIRST thing we encourage you to do is identify your values.

Set out your personal investment philosophy and your goals. Identify what is most important to you.

Beyond whatever else we may have in common, it is truly our values that bond us to others.

When you start looking for your tribe, look for people who share and reinforce your personal values.

And make sure you act on your own values. Be the best version of who you really are.

In a new environment, DON’T

  • Play close to the vest
  • Pose and pretend you’re someone you’re not
  • Try to look smart

DO

  • Be willing to open up
  • Ask questions and share ideas
  • Make an impression
  • Prepare talking points
  • Bring business cards!
  • Get contact information for new acquaintances

Don’t insist on acting alone

Real estate can be a lonely business.

While we trust you to be an innovative independent operator, we also believe strongly in the power of a tribe.

We know finding your tribe isn’t a piece of cake.

You have to commit time and energy. You might have to put yourself out there and overcome some natural inhibitions. You might even have to form your own groups.

But being a member of a tribe is a sacred and special thing.

When you’re part of a tribe, you have a community and responsibility. Treat that responsibility with the utmost care, and in return, it will give you more than you ever thought it could.

Remember, your environments and associations can either drag you down or bring you up.

Today, we encourage you to start the work of finding your tribe by asking yourself these questions:

  • Who do I spend time with?
  • What do these people have me thinking? Doing? Reading?
  • What do they have me BELIEVING?

Then ask yourself the big question: Is that okay with me?

If your answer is yes, you’re on the right track.

And if your answer is no, then maybe you have some work to do.

Go out today and kiss some frogs.

We guarantee you’ll find Prince Charming, or at least a good friend, a role model real-estate investor, or a terrific tribe.

Now get out there!


More From The Real Estate Guys™…

The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training and resources to help real estate investors succeed.

President Obama’s REAL Legacy

The JOBS Act signed by President Obama allows real estate investors to advertise private placements to accredited investors

Speaking at Julius Caesar’s funeral, Shakespeare’s Marc Antony gave one of the most iconic eulogies in literary history …

“Friends, Romans, countrymen, lend me your ears; 
I come to bury Caesar, not to praise him. 
The evil that men do lives after them; 
The good is oft interred with their bones …”

Now here we are … at the end of the Obama years … and time will tell how history will remember the 44th President of the United States.

From what we’ve seen, it seems that President Obama’s “signature” achievement, Obamacare, could likely end up undergoing a major overhaul in 2017 … maybe even a complete repealment and replacement … at least if one is to believe all of the campaign rhetoric of soon-to-be President Trump.

Frankly, we’re HAPPY all the attention is on Obamacare. Hopefully, it means no one will mess with what we think will go down as President Obama’s REAL signature achievement …

The JOBS Act.

More specifically, the provision of the JOBS Act which lifted the restrictions on soliciting investors into private placements.

When it passed in 2012, we said it would be huge.

When the first set of regulations was released at the end of 2013, we spoke on this topic at the New Orleans Investment Conference.

Shortly thereafter, we published a special report, New Law Breaks Wall Street’s Monopoly.

We’re doing our best to get the word out so ambitious real estate entrepreneurs can get in on the action.  But of course, these things move at their own speed.

For some, it’s forgetfully slow.  For others, it’s frighteningly fast.  It just depends on how you respond to opportunity.

If you take a “wait and see” approach, you’re bored waiting for the action to start.

But if you have a “plan and do” personality, you’ve been madly paddling into position so you can ride the wave as it breaks.

Personally, we think “Plan and Do” is better than “Wait and See.”

You can read the report for a better understanding of why the JOBS Act is so huge for real estate investors … and ultimately for all kinds of investors.

The short of it is that U.S. securities laws have largely served to protect the market-making monopoly of Wall Street … and herd Main Street investors into the paper-asset casinos.

Read that again and let it soak in.

By making it very dangerous and expensive for purveyors of private investment opportunities … like folks putting a group together to buy an apartment building or hotel … the old law discouraged real estate entrepreneurs from offering those deals to Main Street investors.  Those deals went to Wall Street banks or a select few insiders.

So as a Main Street investor, if you wanted to get in on real estate, you either had to figure out how to do it yourself, or have an inside relationship with someone who had deals … or do a Wall Street version of real estate like REITs or mortgage-backed securities.

But now, purveyors of private placements can advertise their deals directly to Main Street investors … completely bypassing Wall Street. We like it.

Some entrepreneurs are investing a lot of time and money into building special market-making software called crowdfunding platforms.

Those take a lot of money to build … and there’s a fair amount of regulations you need to contend with.  Being a crowdfunding entrepreneur is not for the light of wallet or faint of heart.

And at the end of the day, to make crowdfunding work, you still need deal flow and a crowd.  Those cost money to build, too.

Somebody will probably figure how to become the Amazon.com of real estate crowdfunding.  But remember how much time and money Amazon spent to get there?  Yikes.

For street rats like us, we think there’s still tons of money to be made leveraging the new law into taking good old-fashioned syndication to the next level.

In fact, we’d prefer it that way.  Think of all the problems created by too much concentration of power in corporations and governments.

Sure, we understand the benefits of economies of scale.  But when things get big, accountants and politicians move in and manage for numbers … forgetting the human element.

Call us old school (we’ve been called worse) … but we much prefer Main Street investors doing business with Main Street entrepreneurs and doing Main Street deals.  Small.  Local.  Personal.

And if we’re all doing enough Main Street business well, it slows down how fast someone can build a new monopoly that forgets the people.

When corporations get big, they lobby for laws which are used to protect their monopolies and crush competition.  That’s bad.

So when we look back on the Obama years, we’re happy for the JOBS Act … and the freedom to do business Main Street to Main Street … completely circumventing Wall Street.

Of course, not using a freedom is almost like not having it at all.  So we hope LOTS of people will get on board and keep driving the Main Street to Main Street revolution.

If YOU want to get in on the action, come learn the Secrets of Successful Syndication on March 3-4 in Dallas, Texas.  Not only will you learn, but you’ll meet lots of people who are out there doing it successfully already. Why not join them?

Remember, Plan and Do is better than Wait and See.

Until next time … good investing!

More From The Real Estate Guys™…

The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training and resources to help real estate investors succeed.

Stupid Investor Tricks

 

investor tricks

Let’s take a look at some investor tricks.

Not stupid, simple tricks. Not the kind of tricks that earn you $100k overnight Spoiler alert. Get-rich-quick schemes are rarely more than just that … schemes.

No, these are investor tricks that went way, way wrong.

Today, we hope you learn from the lessons of others and spare yourself the pain of making mistakes you could easily prevent.

In the words of Franklin P. Jones, “Experience is that marvelous thing that enables you to recognize a mistake when you make it again.”

In today’s special edition of The Real Estate Guys™ show you’ll hear from:

  • Your wise(?) host, Robert Helms
  • His wise-cracker co-host, Russell Gray
  • The godfather of real estate and seven-decade investor, Bob Helms

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Broadcasting since 1997 with over 300 episodes on iTunes!

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Trick #1: Terrorizing your tenants

Enterprising entrepreneurs look for workarounds. When life hands them an obstacle, they look for a way to work around it.

Some workarounds are smart investor tricks that actually work.

And some workarounds are really stupid investor tricks.

For example, see the story of these two landlords in Brooklyn, NY. To get tenants out of a rent-controlled building, they resorted to illegal tactics: not providing heat or electricity, enticing drug dealers to the building, even running dogs through the hallways.

Good workaround? DEFINITELY not.

You don’t want to be someone who resorts to those kind of tactless tactics.

Rent control can be a tricky situation. It gives owners a perverse incentive not to maintain the property.

But there ARE things you can do—legally.

First of all, think long and hard about your decision to own a rent-controlled building in the first place.

Understand that everyone in a transaction will have a short-term view except you. The loan broker, real estate agent, and seller only care about what happens in the short term. YOU’RE the one left holding the bag.

Don’t be naïve about what you’re getting. Do your homework. Verify tenants and make sure they’ve been at the location for longer than a month and have been paying their rents.

And before you make the final decision, check the rules of your location—can you raise rent a certain percentage each year, or are you stuck at one rate?

Property managers in the area will be your best friend. They know all the rules and regulations and can tell you what the real inventory of a property is.

If you do own a rent-controlled property, think in the long term.

Maybe you can move slowly, making improvements and raising rents as tenants move.

Maybe you can make improvements that’ll save you money in the long run and make your building more enticing when you look to sell it—like changing the plumbing system.

Whatever you do, avoid these stupid investor mistakes:

  • Not doing your homework before buying.
  • Holding a short-term view.
  • Doing anything that could come back and bite your reputation—like pushing tenants out illegally.

Trick #2: Coloring outside the lines

We want to touch on a serious subject here: the warehouse fire in Oakland, CA, which claimed the lives of 36 young people.

Our hearts go out to the victims and their families.

We want to examine the responsibility of the landlord and owner in this situation.

The building where the fire occurred was designed to be a warehouse. It was leased by the owner to a single tenant, who then created individual living and artist spaces.

However, the building did not have the proper code, plumbing, electricity, or safety protocols (like an adequate amount of properly marked and cleared exit doors) for human occupancy or high-occupancy events.

In high-rent marketplaces, creative folks often figure out ways to find lesser accommodations for less money.

We are certain that there are many buildings in high-rent markets that are similarly creative—in this case, extremely dangerous.

“At the end of the day,” says Russell, “the owner has a high degree of responsibility to know what’s going on at their property.”

If you own a building, be aware of what’s going on. Inspect regularly—whether you go or you send a trusted employee.

Take time to understand the local code and keep your building up to date.

If you feel like giving in to a good tenant who pays on time and wants to create a similar artist space, think first.

Think about your legal liabilities in the case of an accident.

Think about the weight on your conscience if people lost their lives.

Think about all the possibilities instead of hanging on to low probabilities.

In both stories we’ve shared so far, landlords and tenants encountered a market problem. We emphasize that there are better, more creative ways to solve this kind of problem.

That doesn’t mean you have to quench your creativity. But coloring outside of the lines sometimes just creates a big mess.

There are paths and procedures to get where you need to go.

“When you bend the rules creatively to come up with a solution, there’s often fallout,” Bob reminds us.

Don’t throw up your hands. Take responsibility. And color inside the lines.

Stupid investor tricks:

  • Putting your property on autopilot and hoping everything will be okay.
  • Coloring willfully outside of the lines—that is, not following code and safety regulations in your quest for a creative solution.

Trick #3: Mistaking cheap for prudent

On our Halloween horror stories show a while back, we told a true horror story of a careless buyer.

The buyer was a realtor who thought he knew what he was doing. He figured he had plenty of expertise. So he skipped getting an inspection when he bought a four-plex for a killer price.

Six months later, he’d made some improvements, the market was doing great, so he put the four-plex on the market sell. The (smart) new buyer got a home inspection.

Turns out, there were some problems. BIG problems: the building literally didn’t have a foundation.

The buyer sold, finally, at a tremendous loss.

We’ve heard this story over and over. Buyers think they’re being prudent and saving some cash, but end up throwing their hard-earned money away.

If you are buying a property, do your due diligence.

If it’s a no-go, have you wasted your money on an inspection? ABSOLUTELY NOT!

Think of inspections as insurance. Insurance costs you a little while things are going well, but saves you a LOT if something ever goes horribly wrong.

As Bob says, “The most successful investors are the most educated investors.”

Don’t take shortcuts. Use a reputable broker. Find a good lawyer. Get a certified inspector.

This doesn’t mean you can’t save money and do things better. Learn to use your lawyer efficiently. Actually walk through WITH the inspector and see first-hand what changes can be made.

Here’s the stupid investor tricks you SHOULDN’T follow:

  • Not doing due diligence before making a big investment.
  • Mistaking cheap for prudent.
  • Failing to learn from others’ mistakes.

Trick #4: Failing to major in the minors

One of the most important skills you can learn as a real estate investor is how to differentiate between major and minor issues.

When you’re sitting down with a buyer, you have the right to bring up every issue you see with a property.

That doesn’t mean you should.

Here’s the question you need to ask yourself, says Robert: “If the seller says no, are you willing to walk away from the deal?”

Is bringing up a chipped $1.29 switch plate that you could replace yourself worth abandoning a potential purchase?

Choose your battles wisely.

And when you’re buying a property, realize that even in this do-it-yourself world, you’re working in a highly regulated industry.

Do the research. Get advice and legal help.

Listen to your attorneys and advisors, but realize: they DON’T give business advice.

They will give you technical advice. You have to make a risk versus reward assessment.

Business decisions—deciding what risks and tradeoffs you’re willing to take—is YOUR job.

You are the one who cuts through all the chatter.

Stupid investor tricks:

  • Majoring in the minors and neglecting what’s most important
  • Leaving business decisions to others

Trick #5: Making decisions in a vacuum

As The Real Estate Guys™, we ALWAYS encourage you to educate yourself.

Part of educating yourself includes surrounding yourself with smart mentors.

Listen to this brief tale of two investors.

One investor found a market he liked, LOVED the idea of leverage, but chose to invest in a market with zero appreciation.

His strategy wasn’t wrong. The market wasn’t bad. But his strategy and the market he chose didn’t match.

He didn’t do the math, didn’t look at his exit strategy, didn’t run his decision through with someone wiser before purchasing.

He trapped himself.

Our second investor went on some field trips with us and fell in love with a particular market. This market was a strong market, with great performance.

So the guy had a brilliant idea: buy a house, rent it out, use it for vacations once a year, and then use it as a retirement home in 15 years.

At least he thought it was brilliant.

We helped him see that one property was very unlikely to fill all his needs.

We encourage you to bounce ideas off those who are more experienced than you.

Don’t get trapped in your own circular thinking. Get a reality check.

Build a team. Form a circle of advisors.

Lay out your outcome, what you’re thinking of doing, and what you have to work with.

THEN, bounce it off creative, experienced, smart people! It may be there’s more than one solution.

Stupid investor trick:

  • Thinking you don’t need help from ANYONE ELSE

Tune in to The Real Estate Radio Guys™ next week to learn more about finding your tribe.

Go out and make some equity happen. (Without stupid tricks!)


More From The Real Estate Guys™…

The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training and resources to help real estate investors succeed.