So, without further ado, let me help you put this into perspective.  Suppose you were a sincere aspiring Real Estate Investor who, back in 2008 or 2009, purchased some short sale educational program.  It may have been in the form of books, CDs, DVDs, or seminars.  It also probably cost $500.00, $1500.00, $2500.00 or more.  Let’s assume that everything went along as planned; you diligently studied, comprehended and applied the “full court press” to this endeavor. 

If you did exactly as you were told and the wind was blowing in the right direction, you started to buy properties from short sales.  Good for you.  Now, 2-3 years later you are compelled to look back on where that has taken you.  Knowing what we do about the U.S. housing market in retrospect, you can probably conclude that your properties would now be in default, if not foreclosure.  Why?  It is because you didn’t see the forest through the trees.

Simply buying properties without an intelligent real estate investing business plan, will keep you busy, but in the long run you will be broke!  The point is: You have to understand market trends and all that they represent. 

In previous articles I have commented extensively on “demographics” and how they play into the “bubble” we experienced and its subsequent “burst.”  Understanding how we got here in the first place can and should directly influence the REI business decisions you make today!  One reason is that the key to knowing when and how the real estate market will rebound lies in understanding these basic, historically proven principles.

I recently produced a program for beginners and experienced Real Estate Investors alike who want to do it right the FIRST time.  It’s called the “Real Estate Investor’s Guide.”  Interestingly, this entire program speaks very little of techniques but, rather, aids the student to rise above all of the hype; to understand what the really big REI Gurus have known for years.  Many lost fortunes in real estate over the last few years.  Yet there were those who lost little to nothing and are building on their REI wealth today.  Why not be among those who are able to clearly “see the forest through the trees?”

C.J.:      This came from a personal setback in my life in 2007 on the heals of two decades, making millions as a highly successful Real Estate Investor .  I thought I wanted to retire, but when you find a niche that you love, it’s different.  That’s when I founded Invesdoor.com.

EVAN:  What was the most difficult part for you when you were starting your business?

C.J.:      Like everyone else – fear of the unknown.

EVAN:  What was the best part for you when you were starting your business?

C.J.:      The knowledge that I was doing what I truly wanted to be doing.  I don’t live for my job.  In fact, I was set to retire in my 40s, when I went through a divorce.  Now, I am still in business…but I don’t work, because I am doing what I want with my life.  I love helping sincere Entrepreneurs to take their businesses to the next level.  It gives me great satisfaction to watch their delight as they realize their dreams.

EVAN:  Can you provide some basic tips for entrepreneurs who are interested in starting their own business?

C.J.:      Professional growth MUST follow personal development.  The old wisdom was that anyone setting out to start their own business must have education, capital, contacts, market research, etc.  These are all good to have, yet more important than all of them combined, is to start with the proper mindset.

As one of America’s leading entrepreneurial Mentors, I discovered most aspiring Entrepreneurs believe that obtaining those other assets will insure their success in business, yet most new businesses fail in the first couple of years.  My discovery was the actual reason why they fail and here it is:  “It’s not what you have, but who you are.”  This is a scientifically sound concept that is backed by hard evidence.

Of course the entire notion runs very deep into the universal pattern of growth that I call the “internal growth dynamic.”  In fact, I have written extensively on this subject, copyrighted it, I lecture on it and hope to have a full length book for which I will seek a major Publisher by the end of 2011.

EVAN:  What do you think entrepreneurs struggle with the most when starting their business, and how do you think they can change that?

C.J.:      As I stated earlier, fear of the unknown can be paralyzing.  The solution: get a mentor; not just anyone who calls himself a Mentor, but a genuinely qualified one.

My advice is to seek a qualified mentor in your industry; one who has 1) ample experience, 2) measurable success, 3) is a good teacher and, perhaps, 4) has a vested interest in the success of your business.  The business model for my mentor for life! partnership plan is built this way.  It’s working and the results we are seeing are phenomenal.

EVAN:  How does an entrepreneur know they are buying into the right business?

C.J.:      It all starts with your core desire.  You must fully understand why you want to be in business.  “Making a lot of money” is merely the byproduct of doing what you believe in and doing it well.  It should not be your motive.  Being of service to your fellowman is what is really rewarding.  That is how you live your life with significance.

So examining your motives should preempt the rest of your business plan.  It’s like Covey said; “Begin with the end in mind.”

Whether or not green rehabbing is for you – you decide.  Even so, there is a principle here that has to do with more of a long-term perspective as opposed to instant gratification.  Don’t weigh your choices by short-term gains.  What I mean is:  “Green” is a way of life.  It’s not just using specific materials and working with municipalities to qualify for green programs.  It is a sustainable way of running your REI business in every facet of management.

For example, the Sierra Club has suggested some positive ways of going green at work that are both environmentally as well as financially rewarding:

1)      Use Energy Star fixtures and bulbs along with timers and motion sensors to turn off lights when not in use.

2)      Turn computers, monitors and printers off at night.

3)      Buy recycled paper and supplies….then recycle it.

4)      Don’t buy plastic cups, plates or cutlery.

5)      Rethink your travel.  Be conservative and carpool when possible.

6)      Telecommute whenever possible.  This will save $100.s per year!

7)      Create a healthy office environment, especially if your office is in your home.

These are some great tips.  You will likely have the most success implementing these tips once you resolve to think green and sustainable in everything you do.  Although,  may seem to be the expensive way to go right now, your real estate investment business cannot afford to ignore the green revolution.  From a long-term perspective, it’s the only thing that makes sense.

I am so grateful that my company, which I formed in late 2008, was centered on the premise that there’s strength in numbers.  Basically, our strength comes from the large network of fellow entrepreneurs who operate their own businesses under my label.  We currently have national coverage and are soon branching out to a few other countries whose economies are similar to the U.S. market.

The power of a network cannot be over emphasized.  If you have your own real estate investing business, consider the following three networking tips that can make your chances of success far greater.

1. Circle of influence – This represents your team.  These are your supportive contacts, peers, with whom you can share new ideas.  The way the market has been changing, you have to make time for brainstorming in order to stay ahead of trends.  Your team can also contribute invaluable observations like giving constructive criticism, too.  Who, outside of your circle of influence, can you rely on for that?
2. Strategic alliances – If you are a small business owner, I strongly advise you to work with other individuals and complementary companies who may augment your services and respect you.  They will give you the word-of-mouth advertising that you need – just as you will do for them.  Thus, you can become more profitable and experience quicker services derived from your strategic alliances.
3. Exchange system – This refers to a referral or bartering system. All parties agree upfront just what will be exchanged. This system should be a win/win for all participants. Fairness and trust will ensure its success.  With the right intention, your exchange system will grow and prosper.  Seek those who truly embrace the concept of providing honest services and products for a fair price.  This is essential as bartering leaves a lot of room for abuse.  Be careful.

While the foregoing suggestions are an excellent way of expanding your business, it is important to stress the fact that a lot of time and energy can be spent if there is not a high level of trust among all participants.  That’s why I have created a non-competitive environment among my students and partners.  To me, I have no time for greed and don’t wish to spend my time policing those whom I cannot trust.  A tight network of close associates is a precious asset for any small business.

First, it saves time.  Rather than having to go out and get estimates you can “guesstimate” the cost of a repair or replacement as you walk through the property.  Because of this convenience, your second advantage is that you probably won’t have to visit the property another day to get more information before you come up with your cost estimate.  This is especially helpful when you are pressed by a seller to make an offer on a property.  You simply may not get a second chance to walk the property prior to entering a contract.

The way I teach my students is to keep the process as simple and streamlined as possible.  There are certain items that seem to break down more often than others.  These things are fairly standard in the industry.  The quality you choose for a replacement item, say an appliance, should be more along the line of “entry level.”  Remember, you are an Investor.  So don’t try and play the “Extreme Makeover” game.  The real estate investing business is profit-driven and you cannot afford to over-improve.

The next time you have a moment, try this:  Visit your local national home-improvement warehouse.  I like the selection, price point, and availability of typical replacement items that the real estate investor requires.  It also seems that prices remain fairly consistent.  Make a list of the things that you often need to address in a rehab like stove, range hood/microwave, toilet, bathroom cabinet/sink combo, kitchen sink, door locksets, trim and baseboard stock, laminate flooring, carpet, pre-fabbed cabinet modules, windows, pre-hung int. doors, garage door openers, 1gal. & 5gal. plants, and the list goes on.  These are some of the things that are usually on the rehab list of replacement items.  They represent those things that are more easily replaced than repaired.

Once you find them, write down their average prices and save as a “cheat sheet” for later.  You will find that you will not only be better versed in cost averages, but you may be inspired in new means of profitably executing your next rehab project.

That’s what being an Entrepreneur is about.  You will often find yourself blazing a new trail and it can get a little scary at times.  Of course, in the real estate investment business, a “newbie” can really feel the pressure once the transaction is in contract and the “due diligence clock” starts ticking.  You have a very limited time to get things in place before you must pull your last contingency and the pressure’s on.

That’s why I am a strong advocate of working with a network and even on a team.  In the real estate wholesaling business, it is possible to close a deal per week when you have all of your support systems lined up.  Without the backup of a well-oiled team, you will find yourself caught up in the mundane tasks of your business rather than finding those golden opportunities known as those found in motivated Sellers….and Buyers.

Wholesaling in general, is a great way to break into real estate investing as it doesn’t require a lot of money or personal credit.  That’s why my mentorship program starts with wholesaling so that my students have an opportunity to earn some money, get out of debt and start saving for their own transaction in which they will actually take title.  The key here is volume.  I call it “stuffing the pipeline” and that level of volume will likely only be reached with the aid of a team.

During the past year I have watched a number of Wholesalers go out of business…not willingly, but due to the fact that they couldn’t put all of the elements together in order to get an appreciable number of deals closed.  They tried to do it solo.  I predict that wholesaling will present a tremendous opportunity for new Entrepreneurs for the next few years.  Nevertheless, the competition will get much fiercer.  I believe that, with few exceptions, those trying to do it all alone with fall by the wayside and only those wholesaling companies who operate a synergistic private network will prevail.

So, how will you avoid getting into a deal where there is no visible way out, having to possibly walk away from all of your hard work?  Start by getting a Mentor, especially one who has a support staff.  From my experience, the very best scenario is when the Mentor has a vested interest in his protégé’s success.  In other words, as joint venture partners, both Mentor and Student work together toward a common goal.

Either way, trash is a fact of most any rehab project.  Over the years, I have dealt with the refuse issues in a variety of ways.  In a general sense, the tip I am about to share is as good a strategy as any.

It is easy to generate enormous amounts of trash on a rehab project.  These take up a huge space in containers and then there is always that last load that mysteriously turned up.  Some folks will order a 40 yard debris box only to have the neighbors fill it up overnight with their old appliances and what not.  Depending on the neighborhood the problem can be either better or worse.  Before creating any construction debris, I have followed a policy of “a clean ship is a happy ship.”  I like to clear out any old carpets, personal junk or other stuff that is clearly slated for the dump.  It makes a clear path for work to get done.  The problem is that if I were to get a debris box out in front of the house and leave it partially filled, there are some hidden issues that I am creating.

First, besides becoming the basis for the neighborhood cleanup day, I am announcing that work is being done and that could attract the attention of local Officials with the intent of imposing unnecessary fees on my project.  When there is no improvement in the form of a remodel, it shouldn’t be necessary to obtain costly permits for repainting walls, repairing faucets and replacing flooring.  These are repairs….not a “building project.”  Nor is it an “improvement” which will incur a higher assessment by the County Tax Assessor.

Second, a debris box out front is a clarion proclamation that workers are performing repairs on my property.  That could mean that expensive tools and/or materials might be on the premises.  Why send out an invitation to burglars?

So, here is my advice.  Have Laborers immediately clear out the entire house…even back yard all into the garage, if possible.  Let the garage be the jobsite trash receptacle while the job is in progress.  Once it’s full then you can have a truck back right into the driveway and have them compact what’s there into their vehicle for cartage….repeat if necessary.  The point is to keep a low profile all the time.  Save yourself money and aggravation on your next rehab!

I am so grateful that my company, which I formed in late 2008, was centered around the premise that there’s strength in numbers.  Basically, our strength comes from the large network of fellow entrepreneurs who operate their own businesses under my label.  We currently have national coverage and are soon branching out to a few other countries whose economies are similar to the U.S. market.

The power of a network cannot be over emphasized.  If you have your own real estate investing business, consider the following three networking tips that can make your chances of success far greater.

1. Circle of influence – This represents your team.  These are your supportive contacts, peers, with whom you can share new ideas.  The way the market has been changing, you have to make time for brainstorming in order to stay ahead of trends.  Your team can also contribute invaluable observations like giving constructive criticism, too.  Who, outside of your circle of influence, can you rely on for that?
2. Strategic alliances – If you are a small business owner, I strongly advise you to work with other individuals and complementary companies who may augment your services and respect you.  They will give you the word-of-mouth advertising that you need – just as you will do for them.  Thus, you can become more profitable and experience quicker services derived from your strategic alliances.
3. Exchange system – This refers to a referral or bartering system. All parties agree upfront just what will be exchanged. This system should be a win/win for all participants. Fairness and trust will ensure its success.  With the right intention, your exchange system will grow and prosper.  Seek those who truly embrace the concept of providing honest services and products for a fair price.  This is essential as bartering leaves a lot of room for abuse.  Be careful.

While the foregoing suggestions are an excellent way of expanding your business, it is important to stress the fact that a lot of time and energy can be spent if there is not a high level of trust among all participants.  That’s why I have created a non-competitive environment among my students and partners.  To me, I have no time for greed and don’t wish to spend my time policing those whom I cannot trust.  A tight network of close associates is a precious asset for any small business.

It is found inside and outside of the home and lives on any substrate that is warm and moist.  Needless to say, if your property is a real estate investment, you will want it mold-free.  The good news is: The solution is quick and easy.

Many have made the mistake of trying to paint over molds only to find out that the water in latex paints only revives the organisms and it soon reappears through the new paint.  The solution is a 10:1 bleach and water solution applied over any possible affected areas.  Spray application is best. Before painting, though, all surfaces should be at a fairly neutral PH level.  This means that you will want to rinse all bleached surfaces so as to get an acceptable substrate for paint.  I generally treat with bleach prior to the standard pressure washing.

First, you should look for the cause of the spore growth.  Then, take steps to eradicate further growth by killing what’s there.  The following are some specific recommendations for doing this as well as avoiding future invasions of this nasty visitor:

• Be sure the building has adequate ventilation, including exhaust fans.
• Clean bathrooms with mold-killing products.
• Never carpet bathrooms or basements.
• Remove or replace any carpets that had become soaked.
• Add mold inhibitors to paints before application.*

Regarding this last point, mildewcides have been part of the surfactants of many architectural paints for years.  The best of these was actually mercury.  For obvious reasons, some harmful components (like mercury as a mildewcide or lead as a pigment) have been removed.  Therefore, if you have a particularly tough mold or mildew problem you may wish to add an agent to the paint that will give you extra insurance against future mold issues.

Not everyone is sensitive to molds like the next guy, but that word simply inspires fear in the hearts of so many!  Why chance losing a sale by even the suggestion that mold is present?

Today, of course, tract builders have come up with cost cutting measures that have sacrificed quality and severely cut short the life of a stucco surface.  These practices have been going on for nearly 30 years.  Still, if maintained with the recommended paint films, it will serve a homeowner very well.

My tip today has to do with surface cracks in the stucco substrate.  They may be unsightly, but short of living on a hill in an active seismic region, cracks shouldn’t really mean much to you.  Anything less than the thickness of a credit card can easily be filled and that’s that!  Remember that most building codes today mandate a waterproof vapor barrier under all stucco, so it is not likely that a simple surface crack will result in water intrusion.

The term “elastomeric” refers to a coating that can stretch 100-300% of itself with a memory so that it can return to its’ original shape.  What this means is that certain water-based elastomeric coatings, available on the market today are capable if filling in surface cracks if brush or roller applied, when painting the exterior.  At times, an even thicker elastomeric compound may be needed for larger cracks.

Since cracks carry a negative connotation and the untrained eye may be turned off by a visual of these, it is probably best to address it up front.  Many times rehabbing calls for an exterior repaint anyway.  If the cracks seems objectionable and you have a budget for repainting (whether it seems to need it or not) it would be a good idea to either 1) treat all cracked areas with elastomeric first and then paint over, or 2) simply paint the whole house with an elastomeric type paint.  The latter is your best bet as the angular sheen produced by elastomeric coatings will not appear irregular over your patches.

Well, sorry if I got too technical with you today.  This is just one simple nuance of rehabbing a real estate investment that I have learned over many years in the business.  This is an example of the type of information that a skilled real estate mentor will be able to offer a student.  Anyway, stay tuned for more and…have a great REI day!