Are We Really In The Real Estate Business??

Ok…..yes I know this blog is all about the real estate business, but the question every real estate investor needs to ask themselves is the title to this article;

Are we really in the Real Estate business?

And the answer that should immediately pop into your head yes….I mean no…..I mean sort of. All kidding aside the reality is we are in the real estate business, but knowing about actual real estate is secondary to a couple other very important skills that you must posses if you want to experience sustained success. Most investors think that if they learn everything that they can about real estate investing strategies through courses, infomercials and seminars they will be a successful investor, but the truth is learning about actual real estate is only a small piece of the much larger puzzle to find success in this business. So what should I be learning about in order to help ensure I achieve massive success as a real estate investor? Well keep reading this article and you will find out what most GURU’s won’t tell you…..

The number 1 most important skill set that you need to have in order to be hugely successful in the Real Estate business is MARKETING! You see most investors have been spoiled over the past couple years by just being able to buy deals off the MLS or at foreclosure auctions that make them money. The days of being able to easily snag deals through these two strategies is starting to come to an end…..and quickly might I add. The number of foreclosures are decreasing and the number of investors getting into the game using these strategies is increasing dramatically, so this means if you want to continue to be successful in this business you will need to learn how to effectively market your business to motivated sellers! Marketing is one skill that very few real estate investors actually spend much time mastering (mainly because very few GURU’s sell courses about it), but they absolutely should! If you spent as much time trying to learn about marketing as you do learning about the next greatest real estate investing strategy that the online GURU’s are pushing to your inbox, you would be spending your time much more wisely! Once you learn how to effectively market for motivated sellers you will have a skill that allows you to write your own paycheck at will…..and that is the key to achieving financial freedom. If you can set up a marketing systems that constantly deliver your business motivated seller leads, you are pretty much creating a personal ATM with an unlimited supply of cash for yourself! I have built this type of system for myself and from scratch…….so I know its possible for anyone to do it once they posses the right education.

The 2nd most important thing that you must learn to be successful in the real estate biz is people skills! Now this is a skill that some people are just born better at than others, but that doesn’t mean just because you suck now at sales and people skills that you can’t improve yourself! I used to be very reserved and shy when I was younger, which doesn’t lend itself to being very good at talking with complete strangers and selling them on your company’s services. Fortunately (although I didn’t see it this way at the time) I took a job right out of college that was commission only……which meant I needed to learn how to flap my gums quick if I wanted to actually make any money and not have to live off of top romen. Eventually I did get a lot better at talking with people and honing my sales skills which ultimately has had a HUGE impact on the success I have achieved in the real estate investment business.

Now if you have just been buying deals off the MLS or at foreclosure auctions then you are probably saying to yourself “what the hell do I need to be able to talk to strangers for?”. Well the reality is if you are only buying houses off the MLS or at foreclosure auctions then you don’t really need to have good people skills. The fact is a lot of the real estate investors who buy houses only through these avenues are deathly afraid to talk with motivated sellers (or are just really really bad at it)…..which is part of the reason why they only  buy properties where the human element is non-existent. Now although I do suggest you try and purchase properties both off the MLS and at auctions (in addition to other strategies), the truth is it really doesn’t make you a “real” real estate investor to just be purchasing properties from those sources. It does make you an opportunist who is taking action (which is good) using the path of least resistance, but to achieve sustained success and rise above your competition you will eventually need to step outside your comfort zone, build an actual marketing machine and talk with motivated sellers directly! Once you take this step and build your own marketing funnel you soon realize how much more opportunity there is in this great business for those who treat it like one.

I can remember some of the first motivated seller appointments that I went to early on in my career……and to be honest I sucked real bad at connecting with the sellers and putting together a deal. But over time and with a lot of practice I am now extremely comfortable meeting with and talking to just about any kind of motivated seller. By having this skill set it has allowed me to beat out my competition over and over again when dealing directly with motivated sellers! In fact its not unusual for me to get a deal over my competition even when I am offering less money (which happens quite frequently), and the sole reason for that is because I have better people and sales skills.

So lets circle back around and really hit the key points of this article before signing off……If you haven’t started to learn everything you can about marketing then you need to get started ASAP! In addition make sure to study “direct response” marketing more than anything else, since that is mainly the type of marketing you should be using as a small Real Estate Investment business. Next you need to constantly be improving your people and sales skills so that you are comfortable and confident talking with motivated sellers, which will ultimately help you to crush any competition that you may have! Motivated Sellers first need to know who you are and what your company can offer them, but then its your job to make them want to do business with you! I hope this article at least gets you to start to see this business for what it really is…..marketing & people…..and then real estate last, not the other way around!

What’s Up With This Crazy Ass Market??

There have been a lot of headlines lately on a number of Real Estate Investment websites and forums talking about the fact that the market is either heating up, or is absolutely on fire again (in the more desirable neighborhoods)! So whats up with this crazy ass market??

Well I can tell you this much….we have been selling houses faster now than back in the boom years, which is absolutely crazy to me! On the retail side of our business even if the houses are priced aggressively they are selling in less than 2 weeks on the market, and on the wholesale side of my business every rehabber and their mother is calling me 10 times a day literally begging for my next wholesale deal, so that they can rehab it and make a big fat profit check doing so! It seems that the days of every investor with half a brain being able to pick low hanging fruit deals (listed REO’s, HUDS & other auction deals) with fat paychecks attached to them has come to an untimely end! Personally I thought this day wouldn’t come for at least another year, which should tell you a couple of things: The first is that I have been thinking about this day and preparing my business for it ahead of time (and hopefully some of you have been reading my articles and doing the same thing)….and secondly deep down I am happy that not for much longer will I have to listen to story after story of newbie investors telling me about how brilliant they are because they made X amount of dollars flipping some type of foreclosure! Now don’t get me wrong, I am happy to see everyone make money, but you really need to understand as an educated investor, that buying foreclosures is only one very small and never constant acquisitions strategy in a much larger business!

So now that this day of low hanging fruit disappearing has come early, fortunately my Real Estate business is set up to thrive and grow while most of my competition will begin to struggle to find deals……which means its pretty much going to be raining money in our Real Estate office, since we basically control the flow of quality off market motivated seller deals in my market place. Now I’m not trying to sound arrogant or full of myself, but this is just the reality of the current market conditions! Since more than 90% of our acquisitions are non-foreclosure properties, it means that more and more of those investors who are having a harder time getting foreclosure deals are going to be calling me for deals!! And over the last few months this had allowed our wholesale department to really increase our spreads and ultimately our profitability on every deal (its important to know that our rehab buyers have been making more money as well)! So the bottom line is that this improving market is good for not only wholesalers, but also rehabbers as well…..so its a win win for everyone who is in the game right now!

So back to the point of this article which is what should we as investors think about this market? To be honest I really don’t have a magic and absolute answer for you all, but what I can say is that people will only sit around for so long not buying and waiting for the market to bottom. At this point the smart money and educated mid to higher end buyers have been sitting around for five years or more waiting for this mess to clean it self up, and I think they have all decided its time to get off the sidelines and start buying their family the dream home they always wanted for a fraction of what it would have cost them back in the boom years! In addition there is absolutely no inventory out there right now on the MLS for both investors as well as retail buyers looking for immaculate turn key houses with all the bells and whistles. So this has created what appears to be the perfect storm for those of us positioned to take full advantage of it!

Right now in my own business we are cranking up the marketing machine to maximum capacity and trying to get as many leads in the door as possible, because like any storm this surge in demand wont’ last forever…..but while the getting it good we are going to make sure we get ours! So get off your butt and either get into the real estate game or ramp up your existing REI operation, as the time has never been better in my mind and I have been actually buying houses since before the boom……which should qualify my opinion as being worth a little bit!

Rehabbing Tip$: Episode #3….Where are you buying your Houses?

In an effort to keep the momentum rolling on this great series about rehabbing houses for BIG PROFITS I have put together another great article and video post to give y’all some more $$ making rehabbing tip$ for FREE (which is a rarity these days folks!). Now any of us that have been in the house flipping game for more than 3 houses can attest to the fact that everyone at some point will buy and rehab a deal that they should have passed on! So all this GURU BS about how none of them have ever lost money or bought a stupid house is either 1 of 2 things:

1. They don’t buy houses and only sell outdated recycled investment info for you to purchase for only three installments of $999 and a monthly continuity fee of $29!

2. Or  they are just flat out lying and/or have very little “real” experience actually flipping houses. Which means they live in never never land of house flipping where money falls off tree’s and is hidden within crappy outdated kitchen cabinets of overpriced REO listings.

Either way its very important to understand that You Can Loose Money Flipping Houses, or make very little compared to the amount of work you put into the deal…which by the way is exactly what happens to pretty much everyone who signs up for one of those nationwide overpriced big name over hyped coaching programs! Now this generally  happens for the same reasons every time…..and that is either because you are not doing your numbers right and are over anxious to become a real estate rock star and do a deal…..or you are buying your houses through the most competitive deal sources available to us as real estate investors. So basically this means you are buying overpriced deals off the MLS or from local crappy wholesalers who have convinced you that the house only needs 15K in rehab when in reality is needs 40-50K. Right now I see A LOT of investors (although I hate to call people investors who overpay for crappy deals….I prefer to call them idiots or Realtors) who are overpaying for deals, and a TON of would be wholesalers trying to pitch crappy deal after crappy deal. Personally I love crappy wholesalers because they have helped my business explode into hands down the #1 wholesaler in my market of Portland Oregon (if you don’t believe me just ask anyone form Portland in the RE biz or go to www.TTMdevelopmentCompany.com). If you actually sell deals that make your clients money they will be banging down your door for whatever you have next…..which is currently what is happening in my business. Anyway back to the point of this article……

So bottom line is this….work on your acquisitions strategies so that you are better at finding deals than you competition. This means learning how to market for motivated sellers, or finding wholesalers in your area who are as good at providing great deals just like my company is for our rehab buyers. If you do this then you will pretty much never need to worry about loosing money, or making chump change on a rehab deal again.

Go where your competition is not and do what your competition wont (mainly because they are lazy) and you will find the super juicy deals with profit margins big enough to photo copy the check and put it on the overhead of your local REI Club meeting! In my business we have purchased only 1 deal off the MLS in the last year….and that’s because it was a deal we got from an REO listing agent that we work closely with….which made it way more profitable than it would have been had we not known him…wink wink. Now we could keep trying to buy deals off the MLS to rehab, but the reality is that the profit margins for most of those deals would just be much smaller than if we sourced the deal ourselves through our own motivated seller marketing systems. So since I like to make as much money as possible when it comes to rehabbing houses…..this means I go buy my product where there is the least competition…..and you should too, that way you give yourself the best possible chance to make the biggest pay days possible.

Now with that said go back and read some of my articles on what marketing techniques we use to bring in leads and source great deals on a weekly basis. Trust me if you can get off the MLS and find your own deals for your rehab business either through marketing or a great wholesaler you will be one rich Mo-Fo in no time! Make sure to watch the video below and let me know what you think…….

By the way…..the market is changing fast! So get your grubby little hands on as many houses as possible right now that need to be rehabbed and you will make a small fortune this year. Its only May (or close to it) and we have almost done more rehab profits than we did in all of 2011 since the market has picked up and so have prices in the areas we are rehabbing in. Its time to make some serious $$ folks, so get out there and make it happen!

 

Subscribe to The MIM Newsletter And Receive The First Chapter of The REO Blueprint Absolutely Free!!