This age old expression has been widely used for years.  Its application extends into the real estate arena as well.  It is noteworthy, though, that when it comes to investment and financial freedom, pride should have nothing to do with the decision to own a home.

In previous articles I have commented on the many avenues to wealth that real estate investment affords.  Even when it comes to one’s personal residence, it’s good to think like an investor.  Since a healthy percentage of U.S. voters also own their homes, it stands to reason that many laws would be in place that protect and assist these homeowners.  And that is exactly what has occurred!

Federal tax laws do favor those with a mortgage.  Why over 90% of each typical mortgage payment is fully deductible, while personal rent is not.  In most cases, this will far exceed the standard deduction and provide the homeowner with significant tax savings.  That is simply money in your pocket!

Added to that, take the depreciation factor.  Congress allows you to deduct the “improved value”(often 75% of the purchase price)from your taxes over a period of several years.  Again, that is significantly more money in your pocket each year.

Another exciting shelter the government provides is the exemption homeowners are allowed upon sale of their primary residence.  This is my favorite.  Every couple of years or so, you may sell your home and move.  Any gains(profit)realized from the sale can be yours tax free.

Here is the stipulation:  You must have lived in the property at least two out of the last five years to qualify.  This can be done to the tune of $250,000.00 each time.  Married couples can go up to $500,000.00 without paying any gains taxes.

How about that?!  There really isn’t much more one has to do to qualify for these advantages.  This is a sure way to financial independence if one follows the “buy low, sell high” principle.  Today’s real estate market is positively the best in decades for doing just that.

So, the wisdom of homeownership is clearly measured in dollars and cents.  Pride should not be a consideration in making decisions that will affect your financial future.  However, if you like, be proud that you had made your single best economic move when you decided to buy your home.

Are you a real estate investor and are looking to maximize your returns in this wacky market?  More and more real estate investment experts are opting to go offer lease option contracts to selected tenants of their investment properties.

Today’s market climate has bred a near-perfect opportunity for those operating a real estate home business to create profits and help families to reestablish their homeownership status along the way.

Let’s examine some of the benefits of pursuing a lease option contract with your tenants:

· This is a quick way to sell your property at a fair price without waiting for tenants to leave and you then go in and prepare it for sale while it sits vacant.  Tenants under this agreement can simply move in and instantly take a pride of ownership approach to the care of your property.

· You won’t have to pay commissions to realtors.  As a rule, most of those fees can be avoided.

· You are creating a win/win situation for you and your buyer/tenant.

· You won’t have to worry about the losses of another vacancy.  Under this arrangement your buyer/tenant is responsible for maintenance.  If they chose to leave the option payments as well as down payment they paid you will be forfeited.  There’s your security.

· Never have to worry about late payments.  I like to include the contingency that all is lost if they are late…even one month.

· The buyer/tenant may not qualify for a mortgage loan at present.  This provision allows them time to build their credit in order to get qualified so they can complete the purchase.  In the meantime, you are collecting better-than-average rents.  In fact, your buyer/tenant may have been a homeowner for years and is faced with credit issues from a short sale of their family home.  Getting any ideas on how you might advertise??

Lease options are yet another reason I love real estate investing so much.   It’s also part of my real estate mentoring program as a profitable exit strategy.  Remember, you do not need to guarantee today’s prices for a transaction that actually closes in two years or more in the future.  The agreement can be made to settle the price at “fair market value” when they actually enter escrow.  Those numbers can easily be determined if your property is located in an area where there are multiple examples of “like kind” homes from which comparable values can be drawn.

While the real estate market bounces around bottom this year, it will be to your advantage to actually close the sale of your property when values have already started inching up.  The family you are helping, too, will benefit from an excellent opportunity for equity growth from the day they take title.  It’s fun creating win/win deals…isn’t it?

A tradition as old as business itself is that of seeking to bid on desired products or services. It simply means the highest bidder wins the negotiations. Our culture is colored with scenes of rapidly talking auctioneers amusing their audience as they moved countless dollars of merchandise with the sound of the gavel. Big nationwide auctions have recently made headlines but what is actually better for the average short sale investor…REO or bank auctions? Let’s examine the pros and cons for each.

Purchasing a property via auction frequently entails a commitment to all outstanding debts including unexpected liens and other judgments in addition to those for which the auction is taking place. By purchasing a bank owned property you will typically have assurance of clear title or at least a complete awareness of other fees or liens due.

Property sold at auction frequently has tenants or prior owners still in place, causing new owners to engage in immediate action in order to take possession. Bank owned properties have often evicted former occupants thereby eliminating the need for out of pocket legal expenses. Just keep in mind, this is changing and some short sale investors have encountered squatters. On the other hand, depending upon your plans for the property, having paying tenants may be a strong positive. Personally, I have never favored inheriting tenants. Be careful!

Auctions require advance funding to be in place while bank owned properties may actually offer added terms or beneficial interest rates in order to move a non-performing property off their portfolio. Since it can cost a lot of money for a bank to keep a property on their books, one way they entice others to purchase is by negotiating the terms of the finance offers. This is especially true in areas where lenders may be limited by the number of homes they can release on the market (ie, federal regulations prohibit “dumping” in certain neighborhoods – often the same ones where many non-performing loans were originally written). By offering highly favorable financial terms, banks are able to shift properties off their books without continuing to drive down prices.

The bottom line is that short sales are one of the best bargains of all but don’t underestimate the value in bank owned properties. Auctions are a lot of fun but not always indicative of the best value especially for those just starting out or who only intend to purchase one or two properties. People often behave irrationally at auctions because of the competition and frequently make decisions based on emotion. In my company we aid cash house buyers to acquire investment properties either with all cash or by providing funds from our private lenders. Financing in this manner allows the cash buyer to leverage his/her money so that they can do more deals.

Like many who live outside Michigan, when I first considered Detroit as a potential market to invest, I had concerns. The headlines for several years have been highlighting the downward spiral of the car industry, and my initial reaction was that I should “stay out.” The same can be said for many into real estate investing who also shared the “stay out” of Michigan mentality. Upon further review however, I discovered those that told me to stay away were people who had never invested in Michigan. What I found was that when meeting people who were successfully investing IN Michigan the story was quite different.

Is Detroit going through some very tough times? Yes. And that is precisely why there is an opportunity. For example, when the construction industry was booming, heavy equipment such as excavators, loaders and the like could only be purchased at retail prices.  When the construction market collapsed, suddenly you could buy those same pieces of heavy equipment for pennies on the dollar. That was an opportunity for those who had the means to take advantage and buy while the market was down. As for what a piece of excavation equipment can do – it’s utility – it’s value to earn income – never changed.  The only thing that changed was the cost to own them was less for the smart investors. The same can be said for these properties – their utility – their value to earn income from rents – is solid specifically because the purchase prices are ridiculously low. Why are the prices lower than market value? Because we bought them from banks in trouble, who needed to get them off their books regardless of their loss. Investors are snatching up the properties in droves.

There is a demand for quality rental properties. The demand comes from the influx of individuals who have lost their homes to foreclosure; others who have relocated to the area but may not know where they want to live; and individuals who do not have adequate credit to qualify for mortgages in today’s tight lending environment. This is a market to buy and hold onto the property.

Headline followers say that it may take “a really really long time to see any sort of return.” The key has to be to purchase a property with positive cash flow, which these properties have, and to buy it when its entry price is at an all time low, which these are. Why this model works is you are buying a property that gives you returns NOW.  You don’t have to wait years for a return; only a couple weeks until the next rent payment is due.  Unlike California, Florida, Nevada, Arizona and other markets, there was never a housing boom in Detroit.  It didn’t experience the rise and has remained rather stable over the years.

Prices could very well go up when the credit market loosens up and home owners are able to secure their own financing. Meanwhile you as an investor don’t need to rely on that, and if you choose to be the bank, can most likely sell your property for a nice profit and carry the note on as a seller finance. There is a buzz about town as various philanthropic organizations pool their resources to help “restore southeast Michigan to a position of leadership in the new global economy.” There is energy and excitement surrounding the Riverfront, Eastern Market, Tech Town, Aviation Bakery, Indian Village, the DIA, Campus Martius, Automation Alley, and the list goes on and on.

“Urban Bulldozing” is a common topic these days in Detroit.  This is an initiative whereby the city is looking to take out several thousand homes in blighted areas. This is a great idea simply from the supply & demand perspective.  Every home taken down is one less available, and automatically increases the value of every other home.  This means that there is new money going into the area… revitalization is underway. Here are a couple of pictures I snapped of this development this week. Home sales prices for this new development will range from $122,000 to $225,000.

The place to go to get an idea of the types of properties and rents would is the “Michigan Housing Locator” which is run by the Michigan State Housing Authority.  There you can enter an address and radius and it will show you all available properties, and their rents, and if they do or do not accept Section 8. This is also where the property should be listed to access all housing authorities’ prospective tenants.

So in conclusion, the two strongest strategies are 1) Seller finance or 2) When the lease expires either raise rents to fair market value or replace with a Section 8 tenant at fair market value rents.  The easy answer to “Why Detroit” is this… the numbers simply work there.  The rent you get relative to the low price you pay nets you high positive cash flow, and you own a property that the greatest number of people in the nation can afford on any single day, in good times or bad.

In past articles I have hailed the advantages of wholesaling as a viable real estate investing strategy in today’s market climate.  There are a variety of ways to make profits in real estate due to a thing called leverage. Leverage makes it possible to enter the world of a real estate investing business with little money….or even credit.  This provides a number of unique exit strategies with tax benefits that are often unavailable with other investment vehicles.

Now about real estate wholesaling:  One necessary asset in the business of wholesaling real estate is an up-to-date cash buyers list.  This list consists of buyers with ready cash or the ability to access quick cash for a purchase.  Since the Wholesaler is assigning a contract, it is imperative that the buyer has the ability to close quickly.  If you are a Wholesaler, you want only those buyers who can and will move quickly to close on your purchase contract so all your efforts are not lost.

Additionally, these individuals are likely serious professionals who can be allies when you are looking for partners, investors or even a favor like getting contact information on a local vendor or tradesperson.  The important thing to remember is that without serious cash buyers at your disposal, you are out of the wholesale real estate business!  Without an active list of cash buyers you could easily see your efforts to find and secure deals go to waste.  Don’t let that happen to you.

As a real estate mentor I encourage my new students to start building their lists long before I send them out writing offers, or even prospecting sellers.  It is a matter of not “putting the cart before the horse.”  I continue to hear of would-be wholesalers prospecting deals without having an adequate list of qualified buyers in their arsenals.  You know what happens to these people?  They end up having to leave their deals behind because they have no one to buy their contracts!

In my mentorship program my students are my partners, so we allow access to our complete cash buyer list.  This enables them to get their deals optimum exposure.  It sure beats having to beat the bushes for a buyer at the last minute!

So, learn the value of a solid cash buyers list.  Think of it as your business’ client list.  Without clients, you’re out of business.

Likely, no one would argue that real estate isn’t the greatest vehicle for leveraging wealth.  That’s why I am in the business.  However, there are various facets of real estate investing where you will likely see your assets grow most significantly.

Ideally, in an “up” market you should own as much as you can leverage and dream about your assets growing while you sleep.  There have been times when we could go to bed knowing that we would wake up $100., $1000., or more, richer….without lifting a finger!  That is the magic of leverage and real estate investment at its best.

However, those markets come and go.  And unfortunately, the present market is far from that!  Nevertheless, there’s hope for those seeking to break into the wonderful world of real estate investing.

The following two strategies can be employed during the present market, which will hone your real estate investing skills as well as enable the savvy, alert investor to save for the next up market in the future.  You can either fix & flip properties or wholesale properties for an even quicker, lower risk proposition.

Now, back to the road to wealth.  Owning your own income properties, otherwise known as “landlording,” is what has made emperors, kings, and Dukes.  Why even the Queen of England’s family is a major landlord.  Historically, wars have been fought over income-producing real estate.

Today, the tax advantages alone that come with real estate ownership are hugely due, in no small part, to the fact that most of the lawmakers own income property.  Thus, the laws are slanted in favor of property owners.  That’s the way it is.  Why fight it?

Owning your own income producing real estate is the real road to wealth.  Stay tuned for more tips on building your financially free future.

The “art of negotiation:” It is an art, isn’t it?  Many have sought to gain proficiency in it, yet sadly fail to bring both sides together in an equitable manner…one which we call “win/win.”

You have, no doubt, heard of this expression.  And you like the concept.  But do you understand what it actually takes to create a genuinely win/win scenario in which both parties leave the table content?  Well, it all starts with intention or motive.  True win/win is generated when mutual respect abounds.  Both parties must be legitimately concerned with the welfare of the other.  Neither can enter a negotiation with bad intent.

Sometimes, I have seen negotiations where one of the parties arrived with the wrong intent and, by the time it was all over, they had changed their tone completely.  This comes from inaccurate perceptions and ideas that can be slowly worn away by a negotiator who is truly skilled in the art.

As a leading real estate mentor, I teach my partners to recognize the psychology behind everything people do or say.  There is often a good reason for certain behaviors and developing the ability to identify these is a great asset to the real estate investing professional as well as everyone else inhabiting the planet.  I have always found human behavior to be fascinating and as a result have studied the subject intensively.  What I found is that there is not only a reason for most things people say and do, but there are very constructive ways in which we can be a positive influence…even during a negotiation.

I like Steven Covey’s principle which states: “Seek first to understand, then to be understood.”  Everyone wants to be understood!  When people don’t feel understood they act alienated and that can kill a productive negotiation instantly.  Becoming a good listener is one of the first habits we should form.  Of course, this is a life lesson.  But in the business world, without the ability to listen empathically, our effectiveness will be marginal.  It is truly amazing how much we can learn when we simply “shut up” and listen.  Often we pick up information about the other party that is essential to putting the deal together.

In my mentorship program, the psychology of the deal is a subject that comes up frequently.  The principles of basic human conduct and thinking are timeless, and somehow apply to each negotiation we set out to complete.  With that being said, it should become more obvious now, how a true win/win deal is accomplished.  Negotiation is an art and mastering it is something I believe we must all learn sooner or later.

Who hasn't heard about the exciting concept of real estate investing? Real estate affords a full menu of different avenues to build wealth. They range from the creative "flipping" techniques to the power of "leverage." In almost any market at almost any time, there is a profitable way to invest in real estate.

Since the burst of the U.S. housing "bubble" in the mid 2000s, Americans have been scrambling for answers and seeking opportunities around every corner. Out of the confusion from the market's collapse have come some very innovative ways of entering the real estate investing business. Among the most popular today, is wholesaling; a low-risk, low-capital way of entering the REI arena. Simply put, a Wholesaler will prospect a deal well below market price, enter contract with the seller and assign the contract to a cash buyer during escrow.

Why, though, are we hearing about so many would-be Wholesalers failing and giving up? We have scores of aspiring real estate investors who consult with me on real estate investing and they often complain that they are not getting the results they thought they should. The following two reasons are, by far, the leading causes for their demise:

1- Inadequate number of Cash Buyers to whom to sell any contracts they may land. Without Cash Buyers, it really makes no sense to start prospecting. I don't quite understand why some insist on putting "the cart before the horse" like that, but it is much like building a house on sand. Just as a house built without a solid foundation is worthless, so is a wholesaling business without buyers. I always help my mentees to establish their own healthy Cash Buyers list before endeavoring to secure contracts on properties.

2- Enlisting the help of a Realtor® to purchase. That may sound strange to you, but you must understand the dynamic here. The whole idea is to "buy low and sell high," right? Well, think about it; you must find a property with a significant discount below street value for your Cash Buyer. However, the discount must be substantial enough for your margin as well. Why then, do some Wholesalers immediately call a Realtor® to help them find properties to wholesale? The answer is: Lack of proper training or mentorship!

Think about it: When a Realtor® gets a listing, it usually goes right onto the MLS (Multiple Listings Service). Once there, the whole world knows about it…including other

Agents who are prospecting for either themselves or their clients. Can you think of a more competitive scenario?? Neither can I!

In conclusion, view your REI business as just that: a business. Think about it. You wouldn't go into business blindly, without doing your homework…or would you? Each year 100,000s of sincere, but misled entrepreneurs spend $1000s on worthless educational and coaching programs, only to meet up with disappointment down the road. Their dreams are shattered and now they have no capital left. If you have decided to go into business, then do it right! Obtain a qualified mentor and consider wholesaling first till you refine your skills as a profitable Real Estate Investor. For more information you are welcome to visit:

Being a real estate investing mentor has its challenges. But when you work with people to build their real estate investing business through mentor for life!®, the mentor’s responsibility runs even higher. The state of the U.S. economy has taken a huge toll on many sincere aspiring entrepreneurs. And if that’s not tough enough, the unscrupulous “gurus” who are nothing more than skilled internet marketers, have caused many to view achieving financial freedom through a warped lens.
Remember the old adage: “If it seems too good to be true…it probably is?” Well, crooked advertisers have caused many to oversimplify the facts and conclude that ‘riches are just a seminar or DVD program away.’ That is a clear case of “too good to be true.”
So, then, what is the single best investment you can make in today’s market? French writer, intellectual and philosopher, Simone de Beauvoir, once wrote: “Change your life today. Don’t gamble on the future, act now, without delay.” Those are strong words, but candidly true. Your single best, first investment is in yourself. No college degree, no connections, and even no capital infusion will insure your success in business. So what will?
If you were to hear of a new business, in an entirely new industry, being started by Richard Branson, Sam Walton, Warren Buffet or Mark Cuban, you might conclude that it will be a success? Why would you draw that conclusion? It is because of who these entrepreneurs are. At their core, they have the insights which give them incomparable expertise in any business. Don’t sweat the details. If you are seeking to expand your REI business, you should give serious thought to seeking a mentor. That’s what all of history’s great and accomplished figures have done in the past. Times change, but people don’t. Get a mentor. He/she has already done what you are trying to do now. Here are a couple of tips about mentorship:
• Find a mentor who really has the credentials. You want someone you can respect and trust. This is because
• Once you hire your mentor, you must be prepared to follow all of his/her instructions closely. Otherwise, why hire a mentor?
• Find one who is willing to JV with you in your business so they have a true ‘vested interest.’ Besides, it could keep the cost of enrollment down significantly.
A true millionaire real estate investor is not going to be cheap. Nevertheless, if your chances of success are accelerated, wouldn’t it be your best first investment?