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2/24/13: Ask The Guys – Credit and Credibility

Another exciting episode of Ask The Guys!

Some of the most common questions we pull out of our email grab bag have to do with getting started in real estate with very little money.  Makes sense.  After all, how popular have all the “No Money Down” seminars been over the years?

So while we answer a variety of questions in this episode, as often happens, a theme emerges.  In this case, it’s credit and credibility.

In the studio for another hour of powerful pontifications:

  • Your incredibly credible host, Robert Helms
  • The no-credit co-host, Russell Gray

Whether you’re starting out or starting over, if you’re short on financial resources, it’s important to leverage your knowledge, relationships and potential.  Because to attract the money you need to get in the game, people need a reason to believe that you’re a good investment.

So lesson #1: People invest in people first and deals second.

Of course, after you’ve been investing for awhile, you’ll be faced with questions of “optimization”.  And just what is optimization you ask?  Glad you asked!

As the value of your property changes, so does your loan-to-value ratio.  That is, you have more or less equity.

Now that some of the bargain properties purchase in the depths of the recession are beginning to appreciate, some lucky investors find themselves in proud possession of positive equity.  Remember ypositive equity?  Ahh…those were the days – which are apparently coming back!

Anyway, optimization is about keeping your equity productive.  It’s too big a topic for a blog, which is why we devote quite a bit of time to this topic in our amazing book Equity Happens (humility is for pansies).

For now, suffice it to say that debt and equity aren’t idle items on your balance sheet, but important assets (yes, debt can be an asset) to be proactively managed.  So we talk a bit about debt and equity optimization in response to a couple of listeners questions.  Yes, sometimes we answer questions you didn’t know to ask.  What can we say?  It’s a gift.

And finally, what Q&A session would be complete without some discussion of due diligence?  So when listener Jill asks about this topic, which is especially important to long distance investors, we use the opportunity to wax on about this often overlooked topic.

All in all, this is yet another powerfully practical episode (in our once again not-so-humble opinion) of the Ask The Guys series.

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