-
Click to Connect with me on:
The Passion of a Real Estate Investor
What does it mean to be passionate? Passion has obvious connotations in the world of romance but also can be in reference to one’s general feeling about something. Passion is more than just heightened interest. It is a true love for something that you do or something that you follow or have interest in.
Having passion for a business pursuit may be something entirely new for you, especially if you’ve been in work environments that you didn’t really enjoy. That said, passion is not just something that you either have or don’t have. It can be developed, it should be developed, and, by doing so, you will only create more income and success as an investor.
First off, how can you tell that you are passionate about something? I think this question can be answered in several ways and the following list offers a few ‘tell-tale’ signs that passion is what you are experiencing:
- Seeing or discussing something that immediately makes you happier
- That something taps into your emotional side
- Discussion of something that gets you excited and energizes you
- Your heart rate goes up a little bit
- You look forward to (and even plan for) when you get to do or see something
- You love the idea of sharing that something with other people
Let’s first look at these ‘tell-tale’ signs in the context of something you may be more familiar with and then I’ll apply the same things to your business and you’ll immediately see the parallel.
First, let’s use the example of a sports team. Are you happy when you have the opportunity to see your favorite team play? Do you get emotional during games in which your team plays? Do you love talking about your team to other people, whether they are fans of the team or not? Does watching your team get your blood going a little bit? Do you make plans to see your team play, even if it’s just on TV? Do you want to share with the world and with anyone who’ll watch or listen that you are a fan? If you can answer yes to some or all of these questions, then it’s safe to say that you are passionate about your favorite sports team.
Note that there is a significant difference between interest and passion. Interest is a more passive and non-emotional attachment to something, while passion is much deeper. A lot of people are interested in sports teams but, comparatively, few are passionate about them. Business works in much the same way.
A lot of people are interested in business. Poll 100 people and ask them if they would like to own a small business (i.e. be their own boss). A majority would probably like the idea and would say they are interested in it. Ask the same 100 people if they are passionate enough about it to change their professional lives to do it, and you’ll likely see that interest drop off considerably. Passion is an extra gear that goes beyond simple interest and there’s just more to it. So where does it come from?
Think about it this way. If you are passionate about a sports team, how did you get to be that way? You weren’t born with it. You weren’t taught to be that way. It probably came from seeing other passionate fans and experiencing something valuable in how they approached following that team. In part, you wanted to tap into that energy by being like them and that’s how it starts. Business passion is much the same way. You are much more likely to develop a passion for what you do by seeing other investors with passion describe what they do and how they feel about their profession. In short, such energy can be infectious and can help instill that business passion in you.
Beyond where you get your inspiration, passion must be nurtured and developed, just like the business itself. Why are you passionate? What is your mission? What is it you most love about the business? What sides of us does the business bring out that you most love to see? These are the elements of business passion that you must understand and embrace for passion to be something that you truly have for real estate investing or any other business. When you can demonstrate passion, others will see it and also become motivated as a result. Much like a passionate sports fan or movie buff, others who witness true passion may not fully understand it but will admire the conviction and emotion that is behind it. In the context of business, this can be a powerful credibility booster.
Passion can be reflected by exuberant discussion and giving off that intangible ‘vibe’ that you really care about what you are doing. That is the truest form of passion for your business. When your passion is based upon the love of the process this will greatly attribute to your ongoing success. For example, when you love interacting with clients, seeing their faces when you are able to present a solution to them, watching a distressed property become something better, and love seeing everyone win in the end, that is true passion for what it means to be a real estate investor. When you love these things and it shows, you demonstrate a true passion and people will respond to that.
I can honestly say I am passionate about real estate investing. I had to learn so much, but the passion I have for buying and selling property has afforded me the endurance to stay committed to learning as much as I possibly can about the whole process. I don’t want to take for granted that what I have learned has given me so many opportunities to do all kinds of things including meeting really cool people in this business, make a decent living and have a successful, self-made business. That is why I share all I can with others who want to learn and have a true desire to invest. If this gets your heart racing a bit, then you have to take a look at my offer, here:
www.freemakemoneygift.com/Invitation.html
Skill Sets of the Real Estate Investor: Communication and Examination
Ability to Explain Complex Processes Clearly
As a real estate investor, it is imperative that you recognize and respect that your knowledge of the business makes you fairly unique. Most of your clients and many of your peers will not have the same knowledge as you and you need to be ready to properly explain things in so-called ‘layman’s terms’ or third grade English, so that you communicate effectively with everyone. Never assume, for example, that a client understands the foreclosure process in your area or that another investor speaks the language of real estate investing as you do. This approach will generally serve you well.
Here are four tips to help you communicate more clearly:
Ask probing questions that presume the client or peer knows what you are talking about. This way, you’ll avoid unnecessarily patronizing them if they are more knowledgeable.
Welcome feedback so, if a client or peer is not up to speed with what you are talking about, they’ll feel comfortable asking you questions.
Use analogies to explain concepts to draw parallels between real estate and things a client may be more familiar with.
Avoid terms that might confuse or scare away your client.
For example, instead of saying Contract or Purchase and Sales Agreement, say, “this is the piece of paper that says you are selling the home and I am buying it.”
Instead of saying this is the Deed, say, “this is the piece of paper which transfers ownership in the property from you to me.”
Instead of asking a seller if they will Owner Finance for you, say, “Will you allow me to make payments to you for the house.”?
By following these tips, you’ll be more effective as a communicator. When you can effectively communicate your business, you will be seen as more convincing because part of effective communication is making sure the other party knows and understands what you are talking about.
Ability to Eyeball Properties
What I call ‘eyeballing properties’ is something of a two-headed skill set for the real estate investor. Part one of the skill is to be able to see potential where others may not. Have you ever driven past a property and found yourself making a judgment about whether it was occupied, or had income potential? This premature judgment of a property’s potential has likely cost hundreds of investors the chance to secure a great deal, and usually without them ever realizing it. Look at everything as having potential. This may seem pretty basic but it is a skill because most investors have to train themselves to look at properties this liberally. Trust me, do what you have to do, don’t prejudge, and you’ll enjoy more opportunities.
Part two of this skill set is to be able to quickly evaluate the condition of a particular property. Many new investors will downplay their ability to assess a property’s flaws (and necessary improvements) and this is not as hard as you might think. First, you should have a contractor on your team who can back you up during your due diligence period. Second, it’s not hard to take a trip to the hardware store and price out different things that you may need to do to renovate properties. Between these two things, you can quickly develop the skill to estimate repairs (even if it’s only a crude estimate) and this skill will give tremendous confidence.
In my next article, we’ll explore more skills that aid investors in profitable decision making. Until then, you can explore the unbelievable offer I’m extending to anyone with a desire to learn more about investing and things to avoid when you start this business. I’m including tools that will jump-start your investing career.
Go to: www.freemakemoneygift.com/Invitation.html
The Attitude of the Real Estate Investor - Continued
Flexibility
A significant and important part of an investor’s attitude has to include flexibility that allows the investor to work with a variety of situations they experience. Flexibility is generally an admired trait, and perhaps better stated, a lack of flexibility is often a negative. Flexibility is not just having an open schedule in which to make appointments. It is an underlying attitude of open-mindedness that naturally welcomes a variety of scenarios and potential outcomes. This is a healthy attitude to have because few deals go exactly according to plan. Be flexible, and you’ll be both more successful and more influential with your clients.
How do you rate yourself, on a flexibility scale of 1-10? It’s OK if you are low or in the middle; the important thing is to be honest with yourself. Many strong personalities have more of a ‘my way or the highway’ approach to life and to business and, if this sounds like you, then flexibility is something you likely need to work on.
Humility
Humility, as a component of attitude, is a nice counterbalance to confidence. Humility has been an admired trait in people for a long time and I think, in moderation, it has its place. What I mean by this is, too often, investors can overdo the humility and, in doing so, be seen as either soft or weak. This can be a disadvantage when working with other investors or more assertive clients.
The proper dose of humility can actually work to your benefit. Humility is essentially an expression of ‘Hey, I’m not that different from you’ or ‘I’m no better than you are’ or “I made a mistake and I’m sorry” and can be an indirect way to establish some basic rapport with a client. It effectively offsets confidence by adding a certain human side to a display of confidence and makes the client less prone to see your confidence as arrogance.
From a basic attitude standpoint, I think it is effective to truly think of yourself as being an equal of most people you encounter. If you truly believe you are better than someone else, then maybe you are arrogant and you will just have to do the best you can with that. Too much humility can make you prone to think you aren’t worthy of the success that you do deserve and can foster self-sabotaging behavior. As is usually the case, a good attitude is somewhat about balance and the right balance of confidence and humility can take you a long way.
Commitment to a Favorable Outcome
Underlying the repertoire of every successful real estate investor I’ve met is a dedicated commitment to a mutually beneficial outcome for every deal they complete. While I’ll talk a little more about how this fits into the skill of negotiation later, I think the spirit behind this commitment is a critical part of a good investor attitude. After all, if you are in this business just for the money and do not care what outcome is achieved for your clients, sooner or later that approach will catch up with you. That is just my opinion and I have seen that greed can go so far but does have a tangible end of the road, and I’d love to see you take a more favorable path.
It is more than just a negotiation strategy. It becomes an underlying part of your attitude and could even be more effectively described as a sort of philosophy for your business. When a real estate investment business has such a philosophy, it carries over to most every aspect of how you communicate. The commitment to that ideal outcome will appear in your marketing message, it will be reflected in how you talk to clients, and will be more apparent than you think.
Before you know it, this type of philosophical commitment will actually start resulting in more deals. Why? It will be because this component of your attitude has permeated every part of your business. You will be seen as more sincere because people will enjoy talking to you and will be more responsive to your business proposals. I’ve seen this attitude-based evolution in many an investor and it is always a fun thing to watch unfold. It can happen for you too, so make the commitment to yourself and to how you will do business, and it will just be a matter of time.
It is natural that the formation of a good attitude may be something that you need to work on a little bit. I like to believe that many of us are naturally positive people, but as you’ve seen, there’s more to a good real estate investor attitude than just that. It’s what goes into a good attitude that will also contribute the most to your success and growth. Why do these things need to be built or worked on?
Well, the basic components of who you are as a person will still shine through in your attitude as a real estate investor. If you’re naturally friendly, this will reflect in your attitude. The components like empathy, confidence, and commitment to a favorable outcome may take a little time to develop as you get comfortable in your business and learn more about how things work. For example, it’s real easy for someone to say ‘Just be confident’ but, if you are just learning the business, this may be easier said than done and the confidence will come as you get more experienced and absorb more education.
The bottom line is this. Who you are does shape your overall attitude. What you learn and add to your vault of experiences will mold and refine your attitude and your business.
Continue to refine the components of a successful investor. I’m still offering the tools that will help, check it out here: www.freemakemoneygift.com/Invitation.html
The Attitude of a Real Estate Investor
How important is attitude in the world of real estate investing? It is extremely important, so important in fact, that it can make a huge difference in the overall profitability of your organization.
The typical reference to attitude that you’ll hear is heavily laden with emphasis on how it always needs to be positive. ‘Stay positive!’ or ‘Be positive!’ are the two calling cries of this approach and I can’t say that I disagree with this at all. I just happen to think there’s a little more to it than that. A good attitude has two critical components: what you feel inside and what you convey to the outside world. Today, I’d like to explore three components of a positive attitude friendliness, empathy and confidence.
Note that I’m not highlighting ‘raw exuberance’ or any reference to the classic ’smile and nod’ approach to pleasing clients, or in some cases, people very close to us. In short, a good attitude is not about exuding energy or being constantly agreeable. There’s just superficiality to that approach that I believe many clients can see right through.
Friendliness
This first component of a good attitude is also perhaps one of the most obvious. Naturally, an investor who comes across as being a bit of a jerk (and unfortunately I’ve met some like this) is not going to be seen as favorably but those that fit this category probably have their reasons. For example, the jerk might say ‘Hey, this is a business and I just treat it and everyone I’m around as if it is a business.’ Sure, treating a business like a business is important but I think a comment like that is just a euphemism for ‘I’m a jerk; deal with it.’ The bottom line is that some people just aren’t nice and probably never will be.
You can look at this and shake your head or you can look at it as a golden opportunity. The jerks of the world are going to bring their bad attitudes to the clients and colleagues they meet and that will only make those of us who are friendly look that much better. Just being professional, cordial, polite, and courteous are elements of the friendly investor’s approach. The integrity comes not from investment expertise in this case, but rather from just being a decent human being and the value of that alone should never be underestimated. You are in a people business and being likable can go a long way towards your ultimate success.
Empathy
Empathy is simply defined as seeking to understand a situation or the needs of another person. It is sometimes confused with the similar term sympathy and there is a significant difference between the two. Sympathy is to actually feel bad for someone and, in doing so, absorb the emotional impact of someone’s situation. Empathy is no less sensitive but involves less of the emotional side of a situation, making it much more objective which is a good thing for us as real estate investors.
The way that empathy manifests itself is to simply be interested in someone’s situation, ask questions, and legitimately want to understand what is going on. When you can convey this to your clients, it can give you a tremendous amount of respect because you actually are interested in what is going on with the client. Empathy is not just asking questions, though. It is a part of your attitude and will show in both your tonality of how you speak and body language so your empathy must be sincere in order for it to show to a client.
In the world of real estate investing, it is common to work with clients who are in distressed situations. Empathy is an extremely valuable tool to have in your attitude arsenal because clients want to be understood more than they want someone to feel bad for them. Your empathetic attitude keeps a level of business professionalism around your approach but also shows that you care, which can be a very potent and effective combination.
Confidence
What exactly is confidence? This state of mind is often misconstrued and I think unfairly so. Often times, the confident individual who gets a bad rap is seen as arrogant or, in the case of more laid back demeanors, smug. Is this fair? In many cases, no, but that is how it is and I would like to offer my opinion here on how to convey confidence without overdoing it.
To best illustrate this, let me offer my definitions for arrogance. Smugness, or at least the perception of it, is just quiet arrogance so the same definition will apply to both. Arrogance is a display of confidence that (a) cannot be backed up by real knowledge or experience, (b) is used to demean or patronize another, or (c) both. Arrogance is of course a little more flamboyant and is more noticeable but smugness can be equally detrimental. Many people who themselves are not confident will see any display of confidence, quiet or exuberant, as smugness or arrogance, even if the label is unwarranted. As you develop more confidence in your business, you must work to make it an effective part of your attitude but also be aware that it can be seen the wrong way. Confidence mixed with the right infusion of humility and simple expression of knowledge may well serve you in avoiding being unfairly tagged as arrogant or smug.
The bottom line here is that confidence can be effectively demonstrated through having good knowledge in a particular area without coming across as a know-it-all. In short, when you educate yourself as an investor, that knowledge will show up at some point in the form of confidence. That first meeting you have with a client where you feel sure of yourself and are able to convey that to the client can be a breakthrough confidence builder. When you can consistently convey knowledge-based confidence, the impact on your local reputation will be significant and can mean great things for your business.
Learning how to avoid costly arrogant mistakes will help build your knowledge-based confidence. It is part of my Free gift to you.
Go here: www.Freemakemoneygift.com/Invitation.html
Professional Real Estate Support Team - Part 3
Team Member 9- Financial Planner
Now that you are in business or are at least considering it, do you think it will change your financial outlook? You certainly hope that it will and it behooves you to be prepared for the changes that are coming. A good financial planner is just an essential part of modern money management and you may want to have such a professional behind the scenes to help streamline and optimize your financial growth. Are financial planners critical to negotiating deals on properties? No. Are they critical to you feeling comfortable that you are operating within a defined plan that actually has a chart and a course? Absolutely. When you have confidence in the big picture of what your business is doing, you will be more confident and that will show in how you handle yourself and as you meet new people.
As a spin off to this topic, you may also want to look into adding a self directed Roth IRA into your plan for retirement. Imagine buying and selling a property and the proceeds from that sale going directly into your self directed Roth IRA, which means you’ll never have to pay tax on that money (when you follow the rules). This may sound too good to be true, but trust me it’s not. If you haven’t already, you should look into setting up a traditional Roth IRA now while the government still allows you to and then converting it to a self directed Roth IRA down the road when you are ready. A qualified financial planner who has experience in self directed Roth IRA’s should be able to help you with this, but do your own due diligence as well.
Team Member 10- Property Inspector
A dedicated property inspector is not necessarily one of the foundational team members you will need for your real estate business but is important all the same, especially as you start purchasing properties that you intend to keep for a while in order to produce monthly income. The presence of an inspector on your team helps you both avoid problem properties (aka the money pits out there) and also demonstrates to others that you are serious about your purchases and are ready to perform all necessary due diligence before ever completing a transaction.
The best way to find a good inspector is through a referral. Try to find an inspector that can also provide you with, or knows someone that can provide you with a certified termite inspection and a mold inspection. These two little hidden demons can cause you serious problems down the road if you don’t take the appropriate precautions up front. Take it from me, I have the scars to prove it.
Team Member 11- Property Management Company
I learned a long time ago that property management is not a profession for the weak. Maybe many of you are very compassionate people at heart or tend to generally trust people you meet. These are redeeming qualities but will make you a poor property manager. Managing tenants may not seem to be that big of a deal but, if you believe this, you’ve likely never had to coordinate a difficult eviction or deal with a ‘professional’ tenant who likes nothing better than living rent free. In short, if you’re serious about owning rental property, I believe property management is an essential part of your professional team. Pay someone else to deal with these problems while you utilize your time to invest in more deals.
Personally, I don’t do straight rentals, but rather lease options or seller financing because I want my tenants to feel like homeowners. I want them having the feeling of home ownership in the property and maintaining or fixing up the place rather than trashing it. I find that if they have a vested interest in the home it results in fewer problems. When problems do arise, the existence of property management in your world of real estate investing will save you countless hours, reduce stress, and also boost your credibility by showing the world that you are running a business like a business and, in doing so, that you recognize your own limitations. Forget the investors you talk to who insist that managing your own properties is the only way to go. Most I’ve met who feel this way look like the business has aged them 15 years and I don’t think it’s just a coincidence. Sometimes the best thing you can do is to admit you need help with something and this is a great example of that point.
In my next post, I will discuss the last members of your real estate support team. I appreciate the comments that are shared about any of my articles and encourage you to continue sharing your thoughts. If you haven’t already, be sure to check out some of the material I am giving away for only shipping and handling costs.
Go to: www.freemakemoneygift.com/Inviation.html
Becoming Your Local Real Estate Investing Guru
Story Time - “My Early Days As A Real Estate Investor”
It is interesting for me to think back about my early days as a real estate investor. When I finally made the decision that I wanted to make a living buying and selling real estate, I was filled with mixed emotions of excitement and fear. However, I knew deep down in my heart and soul that this was right and that I was going to succeed no matter what obstacles I encountered and no matter how long it would take. It is definitely easier for me to say this now, however I won’t lie, there were times when I second guessed myself and picked up the newspaper skimming the employment section, “just in case.”
My journey to becoming a successful real estate investor was without question the most difficult thing I have ever set out to do in my life, and yet this journey has also been the most fulfilling and personally gratifying thing I’ve ever experienced to date. There were many nights of sleeplessness and anxiety (and still are on occasion) however I realize now that every experience, positive and negative, was and is meant to be.
I went from a college graduate, to an insurance underwriter on Wall St., to a failed retail coffee shop owner, to a real estate investing novice, to a local real estate investing guru, to an author and a real estate investor coach. This was all over a six-year period, and I have to be honest, I wouldn’t change the past for anything. I loved the business of real estate investing before I could fully comprehend what it was all about and I love it now even more. Real estate is the greatest wealth-generating vehicle on the planet, and I’m proud to be a figure within the industry.
What I would like to do now is give you a little exercise to complete. This simple questionnaire is based upon an honest rating of yourself and (if you have one) your current real estate investing business. Some things you will score high on and others you may not. That’s OK. I’ll have you complete the same questionnaire at the end of the book once you have learned this material so you can accurately measure your own progress.
Questionnaire (Round 1)
On a scale of 1 to 10, with 1 being the least and 10 being the most, write down your number for each of the following:
- I would rank my current understanding and development of a professional support team as…
- I would rank my current level of real estate investment education as…
- I would rank my positive attitude as a real estate investor as…
- I would rank my current understanding of the necessary skills as a real estate investor as…
- I would rank my current passion for real estate investing as…
- I would rank my current professional appearance as a real estate investor as…
- I would rank my current office set up for my real estate business as…
- I would rank my current accumulation of credentials and testimonials for my business as…
- I would rank my current real estate transactional experience as…
- I would rank my current understanding and development of a professional business plan as…
- I would rank my current marketing plan for my real estate business as…
- I would rank my current understanding of and approach to holding effective meetings as…
- I would rank my current understanding and mastery of real estate paperwork as…
- I would rank my current understanding of and commitment to customer service as…
- I would rank my current tax/corporate structure for my real estate business as…
- I would rank my current understanding and pursuit of private lending as…
- I would rank my overall credibility as a real estate investor as…
Did you know that the statistics are not in your favor? By that I mean, it is accurately estimated that only 20% of readers will complete the above survey, and the other 80% will choose to skip it. Interestingly, these statistics are quite similar to the income levels in the Unites States, where approximately 20% of the population would be considered upper class and the remaining 80% is lower class. Knowing this, I’ll wait if you want to go back and complete the self-evaluation questionnaire!
In my next post, I’ll begin sharing how trustworthiness and expertise fit into becoming your local real estate investing guru. Until then, be sure to fill out the above survey and hold onto it, we will be revisiting it again to see our progress. Now go check out the invaluable real estate investing tool that I have personally put together just for you!
Go to www.freemakemoneygift.com/Invitation.html
How To Become Your Local Real Estate Investing Guru
To better understand the psychological nature of real estate investing, you first need to understand the nuances of the real estate market, and how the opinion of the market differs between investors and the rest of the universe. Consumers might use the following terms or phrases to describe the current real estate market: bleak, dismal, sluggish, and catastrophic.
Investors, on the other hand, might use a slightly different set of descriptions for the exact same real estate market, because we will always view market conditions different from the majority. Examples include: opportunistic, a rare gem of possibility, a millionaire maker, ripe for the picking and a never-ending opportunity.
The truth, for investors, is that there has rarely ever been a market condition that is better than the one you are experiencing right now. Like the hundred year flood, you may never see the likes of this again in your business lifetime and it represents a rare and exciting opportunity for people like you and me. The public, influenced as you know by the popular media, sees things differently and in a much more pessimistic light. As real estate investors, you have an amazing opportunity in front of you, and in the spirit of building a multi-million dollar business, you also have to bear in mind that your view of the market is dramatically different than the one your clients will have. This is a gap that needs to be bridged if you are to have optimum success.
In part because of the difference in perception about the market and in part for reasons I’m about to describe, it is the unfortunate truth that investors, as a group, often get a bit of a bad rap and have a questionable reputation in the world of real estate. Why is that? I can think of several reasons that are worth discussing:
Greed
Jealousy
Ignorance
Dishonesty
Lack of Credibility
First, you have the greed factor. Basically, in a nutshell, what I’m referring to here is the small percentage of real estate investors who let their pursuit of power, money, and glory get in the way of running an ethical business. Ultimately, the emphasis should be on creating outcomes that benefit all parties. We’ve all come across examples of greed in this business, and if you haven’t, you will. It could appear as the slumlord that maintains slovenly apartment units to better line his or her pockets with revenue from rents. It could appear as the scam artist who dupes others into sinking funds into phantom projects that never actually materialize. It could appear as the heartless person who promises the world to a client in pre-foreclosure and then leaves them stranded at the eleventh hour. I could go on and on.
These select few make a bad name for the rest of us and it is an unfortunate reality for those of us who wish to run our business the right way. There’s not much you or I can do about it. Real estate is a commodity from which tremendous profits can be realized, and as a result, some greedy people are going to get into the mix. What you can do is recognize how these people affect the reputation of real estate investing as a business and place extra emphasis on building a reputable business that will show the true colors of your craft.
Second, you have the issue of jealousy. I might be going out on a limb or sparking a little controversy here but some of the current reputation for real estate investing as a profession comes from that which is explained by real estate agents and brokers. It is unfortunate, but some (not all) of your real estate brethren are often working against you either consciously or subconsciously. If these select few would simply take the time to learn something new, and open their eyes to the many unconventional and creative opportunities that real estate offers then they would truly understand why you choose to be a real estate investor, rather than a real estate agent. There are hundreds of differences between selling houses for a commission, and buying and selling houses for equity and profit. Personally, I’ll take the equity and profit any day of the week.
Should real estate investors to be alarmed? Not necessarily. Rather, it is important to be aware of the preconception that exists in this business. Credibility must be built in spite of this obstacle, rather than simply expecting that things you can’t control will somehow change.
Third, you have the issue of ignorance, not as much on the part of your colleagues but on the part of the general public. I’m not suggesting the public is ignorant in a general educational sense. What I am suggesting is that the general public is very unlikely to be up to speed with the kinds of concepts and techniques that you will be utilizing as a real estate investor. For example, the majorities of homeowners only buy and sell a few homes in their lifetime and in doing so utilize realtors who are pretty much driving the transactions based on conventional wisdom. We as investors on the other hand are trained to buy and sell properties as a business and perhaps have completed dozens if not hundreds of deals or more. That said, while this type of ignorance may impact the reputation of investing as a profession, it also opens a key door of opportunity for you to really establish a local name for yourself and your business that will literally make believers out of your clients.
Next, is the unfortunate issue of a few dishonest investors out there who threaten what you do on a daily basis. Whether it’s an unscrupulous developer who cuts corners or abandons a project, or foreclosure investors who skim equity or take funds up front from clients and then disappear, the bottom line is the same. Like any industry, real estate investing has its share of “bad apples” and unfortunately, these people get more attention than the good ones. The media loves a story where some evil investor scams an innocent consumer because; (a) it’s negative, and (b) people pay attention to that kind of stuff. My commentary on the media aside, it’s important that you recognize what your clients are likely hearing or reading and how it relates to what you do for a living. You do not want to let yourself become defensive about it but understand that your reputation will in part be built upon showing clients that you do not fall into the “bad apple” category.
Last on my list of things that give investors a poor reputation is a simple lack of true knowledge & professionalism. In short, some of your investor colleagues just don’t know what they are doing and this can impact the overall perception of what you do as a business. While I can’t oversee proper education for all investors, I think (in fact I know) that this can work to your advantage. Where other investors fall short, you will finish. Where other investors are weak, you will be strong. Business is about survival of the fittest and, even though some investors may damage the reputation of the business as a whole by not being very good at what they do, that can and should be seen as a great opportunity to establish your own reputable foundation and build from it.
I will continue this topic next week. Until then, check out my set of tools that when used correctly will easily make you stand out as the educated, smart, and confidant investor. Using the same techniques with the integrity and honesty with which we should all do business, I have created a very successful and highly profitable investment company.
Check it out: www.freemakemoneygift.com/Invitation.html
Why Investors Get a Bad Rap in the Current Real Estate Market
Welcome friends to one of the most beneficial series of articles on real estate investing that you may ever read. No, I’m not here to offer you the next and greatest technique on how to profit from the booming foreclosure market. No, I’m not going to get into the fine details of creative real estate finance or the intricacies of land development. What I am going to do is discuss what I believe to be the foundation for success and longevity as a real estate investor. This all-important topic is professional credibility. This issue is one of the most critical you may ever face because it is something that is both constantly under scrutiny and something that is also fairly easy to develop, once you know exactly what you need to do.
What is credibility? One could easily apply a very broad definition and thus simply presume it to be related to believability. I think a little more depth is necessary to really get at the importance of this issue so, with a little help from our friends at Wikipedia, I can describe credibility as:
“The objective and subjective components of the believability of a source or message. Traditionally, credibility is composed of two primary dimensions: trustworthiness and expertise, which have both objective and subjective components.”
Let’s take a closer look at this definition and break it down to a simplified level. Credibility has to do fundamentally with the quality of a message. That message has everything to do with your credibility as a real estate investor. Whether it’s a marketing message, how you convey yourself over the phone, and especially how you come across in person, the quality of your message has everything to do with your perceived credibility.
If you want people to believe in the
message that you are saying, they
must first believe in you.
A second feature of the definition of credibility is the pair of factors that most influence credibility. Credibility is too often seen as being overly related to trustworthiness when in fact, the issue of knowledge and expertise is equally important. This is particularly true for the real estate investor. It’s one thing to be trustworthy and do a good job of convincing a client that you are as advertised. Not to be a cynic here, but any good salesperson can convey a level of trustworthiness and I’ve seen both consumers and other investors alike burned by the real estate investor who was high on sales skills and low on ethics. In my opinion, there is no such thing as business ethics, only ethics in general.
Trustworthiness is best demonstrated by results. In short, do what you say and say what you do. It may sound like an oversimplification but it does carry a lot of weight and can go a long way towards establishing the trustworthiness component that your business will need to be successful. As previously alluded to, the other factor that ties in so critically to credibility is knowledge and expertise. Don’t confuse experience with expertise because they are two different things. Experience has more to do with time, while expertise can be achieved much more quickly.
The last feature of the definition of credibility that I’d like to point out to you is the reference to both objective and subjective components. Your trustworthiness and expertise can be evaluated both objectively and subjectively and it’s important to not underestimate the value of either. For example, a client could find you subjectively credible (i.e. they have a good impression of you or feeling about you) but, if you don’t back up what you say, the objective side of trustworthiness will come back to haunt you. That’s why it’s important to act out and achieve results, rather than just talking a good game.
Similarly, one could subjectively present a good level of expertise by communicating with industry jargon and relying upon client ignorance to get ahead. This may work for a select few but the expertise you present can and needs to be backed by real knowledge to create sustained levels of success. I’ve heard a few pundits out there say things like “Fake it ‘til you make it” but I find this to be a slippery slope that can cause permanent damage to your business if you aren’t making the proper effort to really learn what you are doing. If you think education is expensive, try ignorance. A better quote is this: ‘be real, every deal.’ Your customers will, at some point, come up with an objective assessment of your expertise, and in the absence of real knowledge, you might find yourself in trouble. Education and evaluated experience is the key to true knowledge and expertise that can be backed up.
On Friday, we’ll explore some nuances you need to understand in the world of real estate investing and I’ll share more of how I became a successful figure within this industry. In the meantime, there are investment tools I have made available to you and you should take full advantage of the incredible offer I am extending to anyone with the same intense passion I have to turn real estate investing knowledge into a wealth creating lifestyle.
Go to: www.freemakemoneygift.com/Invitation.html
The Real Estate Investor Credibility Kit – Part 9
The Competition
Understanding your competition’s strengths and weaknesses is critical for establishing your product or service’s competitive advantage. If you find a competitor is struggling, you need to know why, so you don’t make the same mistake. If your competitors are highly successful, you’ll want to identify why. You’ll also want to explain why there is room for another player in the market.
Analyzing your competitors should be an ongoing practice. Knowing your competition will allow you to become more motivated to succeed, efficient and effective in the marketplace.
Operations
Now that you have had an opportunity to really sell your idea and wow potential investors, the next question on their mind is how will you implement the idea. What resources and processes are necessary to get the ball rolling? This section of the plan should describe the purchasing, staffing, equipment and facilities required for your business.
You’ll want to provide a roll out strategy as to when these requirements need to be purchased and implemented. Your financials should reflect your roll out plan.
In addition, describe the vendors you will need to build the business. Do you have current relationships or do you need to establish new ones? Who will you choose and why?
The Management Team
For most investors, the experience and quality of the management team is the most important aspect they evaluate when investing in a company. Investors must feel confident that the management team knows its market, every detail of the product or service, and has the ability to implement the plan. In essence, your plan must communicate management’s capabilities in obtaining the objectives outlined in the plan. If this area is lacking, your chances for obtaining financing are bleak.
If your team lacks in a critical area, identify how you plan on compensating for the void. Whether it is additional training required or additional management staff needed show that you know the problem exists, and provide your options for solutions. You should include the following four areas:
- Personal history of the principals
- Work experience
- Duties and responsibilities
- Resources available to your business
On, Wednesday I will continue outlining the business plan. Please check out the following offer I have decided to extend well into the New Year for those that want to possess the most effective and successful money making real estate investing tool on the planet!
Go here: www.freemakemoneygift.com/Invitation.html
The Real Estate Investor Credibility Kit - Part 8
Sample Business Plan Outline
Author’s Note: Although there are numerous ways to assemble a quality business plan, this particular outline can be easily adapted for a real estate investing business and is thus an excellent recommended choice for you to consider.
The Executive Summary
The first page of your business plan should be a persuasive summary that will entice a reader to take the plan seriously and read on. The Executive Summary should follow the cover page, and not exceed two pages in length.
The summary should include:
- A brief description of the company’s history
- The company’s objectives
- A brief description of the company’s products or services
- The market the business will compete in
- A persuasive statement as to why and how the business will succeed, discussing the business’s competitive advantage
- Projected growth for the company and the market
- A brief description of the key management team (if any)
- A description of funding requirements, including a time-line and how the funds will be used
The Product or Service
It is important for the reader to thoroughly understand your product or the services you currently provide or plan on providing. However, it is important to explain this section in layman’s terms to avoid confusion. Do not overwhelm the reader with technical explanations or industry jargon that he or she will not be familiar with.
It is important to discuss the competitive advantage your product or service has over the competition. Discuss any barriers that you face in bringing the product to market, such as government regulations, or the effects by any competitors.
Areas that should be covered in this section include:
- Is your product or service already on the market or is it still in the development stage?
- If you are still in the development stage, what is the roll out strategy or timeline to bring the product to market?
- What makes your product or service unique? What competitive advantage does the product or service have over its competition?
The Market
Investors look for companies with a thorough knowledge of their target market. If you are launching a new product, include your marketing research data. If you have existing customers, provide an analysis of who your customers are, their purchasing habits, their buying cycle.
This section of the plan is extremely important, because if there is no need or desire for your product or service there won’t be any customers. If a business has no customers, there is no business.
This section of the plan should include:
- A general description of your market
- The niche you plan on capitalizing on and why
- The size of the niche market, including supporting documentation
- A statement and supporting documentation as to why you believe there is a need for your product or offering by this market
- What percentage of the market do you project you can capture?
- What is the growth potential of the market? Include supporting documentation.
- Will your share of the market increase or decrease as the market grows?
- How will you satisfy the growth of the market?
The Marketing Strategy
Once you have identified who your market is, you’ll need to explain your strategy for reaching the market and distributing your product or service. Potential investors will look at this section carefully to make sure there is a viable method to reach the target market identified at a price point that makes sense.
Analyze your competitors’ marketing strategies to learn how they reach the market. If their strategy is working, consider adopting a similar plan. If there is room for improvement (and there usually is), work on creating an innovative plan that will position your product or service in the minds of your potential customers. The most effective marketing strategies typically integrate multiple mediums or promotional strategies to reach the market. Such as TV, radio, print, web, direct mail, trade shows, telephone, public relations and promotional materials.
Next week I’ll continue the business plan outline starting with knowing your competition.
Want to go ahead and get an advantage over your competition? Use the most valuable real estate investing tool on the planet! Go here: www.freemakemoneygift.com/Invitation.html
-
-
Other Blog Stuff
