As a real estate mentor with students across the U.S., I have been getting reports from my joint venture protégés about their individual experiences.  The company I founded, Mentor for Life!™, works with driven entrepreneurs in their respective local territories.  There is one comment I am getting more than all else and it has to do with the challenges each small business person typically encounters on their own.

Before I get to that I want to address the fact that anyone that desires to make a go of it in real estate investing needs to assess their intentions and frame of mind prior to writing their first offer.  In fact, I feel it is imperative that every new prospective real estate investor, whether wholesaler or “Fix and Flipper,” should be mentally prepared to 1) make sacrifices and 2) wait patiently.

Those in Mentor for Life!™ often hear me talk about “stuffing the pipeline” with deals.  There are very good reasons for this.  For one thing, many deals take time to close for one reason or another.  It would be foolish to start prospecting for a property and then do nothing at all until the transaction actually closes.  Stuff the pipeline with deals so multiple opportunities can be cultivated simultaneously.

Secondly, it’s a fact of business that deals “go south” or fall through.  How many offers might you make before one is accepted?  Anyway, if we have the proverbial pipeline stuffed with prospects we won’t as likely be overtaken with disappointment if we lose one.  There would be others in the mix.

Now let’s return to the field.  I often hear my new students overly-anxious about closing on a certain property and as a result I have to get them to step back momentarily and take a breather from the negotiations.  If their frame of mind is in a state of scarcity they will likely enter negotiations handicapped and either leave money on the table or lose the opportunity altogether.  This is just another advantage of having over two decades of real, hands on experience.  It is experience that I am glad to share with all my JV partners.

Greetings from 37,000 feet!  I am on the plane to meet up with one of my new Territory Managers in Mentor for Life™, a real estate mentor program for serious entrepreneurs.

Anyway, I was thinking about how much of a challenge it is for those who have no one with prior experience and a willingness to share it.  From the beginning of time the traditional (functional) family unit provided all the mentorship a child needed to equip him/her for the world.  If one was raised in a farming community, the training would focus on farming and if it was fishing, that was the career the youth could expect to be mentored in.  Often, with the loving supervision of two caring parents, one could pursue that path with confidence.

However, with the advent of the industrial revolution things began to change.  Life became more complicated and choices abounded.  This spawned an awareness and further advancement and just one hundred years later we beheld the personal computer and all the complexities it brought with it.  Now, the advances we use to read about in comic books as kids are a reality…even for kids!

What this is all leading to is the blatant reality that the world of real estate investment has become a complex and varied proposition.  You want to venture into real estate investing?  Fine…but you need a mentor.  And chances are that your parents, no matter how well meaning, are/were not qualified to give you what you’re going to need as you explore the ominous world of 21^st century investment.

At first, this may be a huge step for many.  Those enrolled in my Mentor for Life™ know they can always contact their mentor because they qualified to be a part of my team.  I was thinking, though, that those who aren’t may have some simple, general questions about mentorship.  Since this is probably the case with sincere folks across the U.S., I have decided to open the door to anyone with genuine queries about real estate mentorship.  For a time, I will personally answer anyone’s questions about mentorship free of charge.  I can be reached at cjlauria@invesdoor.com anytime.  Due to our nationwide scope of influence I suggest you allow 48 hours for a reply as I haven’t found a way to clone myself.

In the meantime, I recommend you consider this:  The greatest hindrance we encounter is our own fears. When starting a business for the first time, fear of the unknown can be paralyzing.  A qualified mentor has been down that road and can validate certain feelings that you’re experiencing as well as identify erroneous perspectives you may manifest.  In today’s business climate, “supply and demand” is still the key issue.  This time the demand for true, qualified mentors has never been greater, but the supply is limited.  I look forward to hearing from you soon.

Today I thought that I might go back to the basic fundamentals of investing.  As you know, whenever possible, I enjoy thinking in terms of principles and not formulas.  Formulas come and go, but principles are timeless.

Thos e of you that have been reading my articles for some time know that money is not the first thing in my life.  Does that seem a little odd for someone whose career is teaching people how to make money?  No.  Not at all.  You see, When someone earns money they trade their time for the currency that represents money in the country in which they earn it.  However, when one makes money it is conceivable that it is not in direct proportion to the time he/she spends in its pursuit.

Over the years I could have been driving a Rolls Royce or some other eye-popping car.  I’ll leave that to the Athletes, the Hip-Hop stars and others whose value is defined by their bling.  My values have always been much different.  My friends know that money has never been of prime importance to me.  My time is.  Because of this, I was always available for my kids when they were growing up.

If one follows the idea that you have to trade your precious time for money, then you will only have as much money as you are willing to give of your time/life.  I stopped thinking that way many years ago…and I’m glad I did!  Making money is what the wise investor does.  Investment = “making money.  This is a principle and, oddly enough, Biblical in nature.  If you don’t believe me, look it up:  Matthew 25:24-27.

One of the points of the parable there was the rightfulness of making money without toiling to “earn” it.  Those who are oriented in the, “work hard for your money” mindset don’t get it and will, sadly enough, criticize the wise investor who does it.  Making money rather than earning it is a principle that is taught in Mentor for Life™ that I founded last year.  Whether it is real estate investing or through any other means, the principle is the same.

Life is too precious to squander in pursuit of anything material, in my opinion.  The freedom that money has granted me, however, is immeasurable and I am glad that I learned that earlier in life while my family was still young.  I teach a lot about real estate investment and have also invested in Forex at times, but it has always been a means to an end…to free up my time so that I can pursue those things that are truly important to me.  Master this principle and you can master your life!

What an interesting question!  “Of course, I’m right!”  Well, are you?  Unlike the majority of REI programs for sale, “Mentor for Life”™ really only wants qualified applicants to enter their program.  Why?  Because,  it’s “for life.”

When I founded this company, Invesdoor™, I had already determined to surround myself with like-minded individuals who share my vision of business.  Right off the bat this eliminated anyone who was in any way greedy, dishonest, lazy, irresponsible or negative.

Now let’s dwell on the positive aspects of qualification.  Shall we?  It’s really very simple, actually, if you want a true real estate mentor with successful experience, teaching skills, innovation and integrity you must bring some positive qualities to the table for me to work with.

To begin with, nothing attracts people more than one’s ability to accentuate the positive.  I am a firm believer in having the proper attitude before launching a new career.  This will stem from a thorough understanding of the industry as well as general principles of business.  However, regardless of background, an enrollee must have the ability to consistently see the glass as half full whenever a situation appears incomplete.

Additionally, our approach to every endeavor must be with passion.  Passion is not the possession of everyone and if you tend to view things in an anemic manner I suggest you talk it over with one of my staff.  Passion is often an inherited quality.  However, it can be acquired through proper training & coaching.  Making the transition involves a shift in one’s paradigm or viewpoint.  This leads to a third attribute that we look for.

The third and last of this discussion is motivation which is evident in one’s willingness to follow direction and apply all that is taught.  After all, if we are going to commit to a real estate mentor program of some sort, we will want to be mentally and emotionally prepared to give it our all.  Now, doesn’t that make sense?  Why embark on a business venture unless we are prepared to take it to completion.

There is no “magic bullet” in real estate investing, even if you secure a costly mentor.  Every Mentor will expect this kind of dedication to the common cause.  If, however, you come aboard “Mentor for Life™ you will have already been screened and determined to be a good business partner in this exciting business of real estate investment.

“Mentor for Life”™ What a concept.  The mere title indicates that long after one is trained and coached in the desired career path, the Mentor is still available because he cares about his protégé.  In a moment we will discuss why this concept is so effective and how it is possible to achieve.

In my last two articles in this series we discussed the need to have a real estate mentor who is seasoned, a good instructor, innovative and full of integrity.  Now we want to examine if and how it is possible to have such a mentorship in the field of real estate investment.

Let’s face it:  When we talk about a real estate mentor we visualize someone who is 1) not a kid and perhaps 2) a multi-millionaire from his/her many successes in real estate investing.  There are so many scams on the internet that it can make your head spin.  That is one of the reasons I am so passionate about bringing some integrity to the profession.  My “Mentor for Life”™ business plan is just that means by which I intend to provide honest value in training, coaching and mentoring to the real estate home business person.

So what does it take to convince a highly successful real estate mentor to take you under their wing, so to speak?  It’s all about vested interest in your business.  Honestly, why else would someone with this kind of background practically adopt a student as if they are their own child?  It’s simple:  They are still a business person with a business mindset.  If they can have a number of students in multiple locations it would be possible to tap into many markets at the same time.  Even a little piece of the action represents a huge portion of profits if the protégé is successful.

Therefore, while training and coaching are essential, real mentorship involves concern about the outcome with the future in view.  This is the basis for “Mentor for Life”™ and itreally works.  You see, in this type of arrangement, each students maintains their autonomy as individual real estate home business entrepreneurs.  Nevertheless, they enter a joint venture agreement with the Mentor for all subsequent deals.

In my business, it has laid the basis for some very nice long-term relationships.  I like people and the team that we have formed is fun and inspiring.  Hey, sometimes one of my students comes up with an idea that I had never before entertained.  With this kind of synergy we have been able to move on to some bigger and better avenues of real estate investment.

Is this type of plan right for you?  More importantly, are you right for a “Mentor for Life™ partnership.  In my next article, as the final part of this series, I will run through some of the criteria we use to determine an applicant’s qualifications.

In my last article we discussed the importance of finding a real estate mentor with well-rounded experience and success, but also skilled in the art of teaching.  They would have to be patient, open-minded and innovative.

The word innovative is key when it comes to real estate investing.  This is because as the market goes through its cycles, methods and techniques must change.  What worked a few years ago just doesn’t apply now, period!  That’s why these “gurus” who claim to offer the “end-all” system for wealth in real estate investment make me laugh.  Actually, the laughing soon turns to nausea as I see a myriad of sincere folks flocking to purchase a “dead” program.

It is important you recognize that anyone offering a system that came from a different curve in the market may not have any value at all.  Successes from those days may be completely irrelevant.  That’s why I am an advocate of extreme creativity.

In my Mentor for Life™business plan my team works hard to stay ahead of the trends so I am able to keep fresh material and training in front of my students.  Many of the methods we use were not employed 12 months ago and many others will likely not be used 12 months from now.  Thus, if a mentor is not willing to change with the times, they are not a good bet and a pathetic waste of money.

In all actuality, one who sells a system from yesteryear is conducting a scam.  Each technique should have an expiration date on it, much like fresh food.  I doubt you would buy meat, dairy or produce that was 12 months past its freshness date.  If a Grocer was selling goods like that they would be shut down in a heartbeat!

Another feature that should come with a qualified Mentor is integrity.  It’s one thing to produce a bunch of content and yet another to care what’s being done with it.  What I mean is; a true “mentor” works to assist the student in each deal until they are completely confident with their new found skills.  They understand and teach the principles behind deal making and see to it that the student fully comprehends the philosophy.

Often, so-called “mentors” will simply provide materials and then it is up to the student to make it happen.  Understandably, without a vested interest in the student’s business it’s not likely that adequate follow-through will take place.  In my next article I will talk about some positive aspects of good real estate mentorship and where to find it.

In my many real-estate-investment-related articles, I have at times stated that we are faced with the “perfect storm” for wholesaling investment properties.  While the current state of the economy and housing market is prime for real estate investing, there is another factor that we have not yet considered.

I would like to address the present financial status of the many desirous of starting a home business in the real estate industry.  As many of my readers know, my company, Invesdoor™, came up with the “Mentor for Life”™ plan for entrepreneurs across the country.  Each week my team interviews scores of sincere entrepreneurs looking to break into the exciting world of real estate investing.

Historically, one had to have a huge “war chest” of cash and excellent credit to successfully accomplish branching out into this type of career.  What my team discovered is, that there are a plethora of very intelligent, motivated folks across the U.S. that are themselves victims of the economic reversal in the housing market.  Yes.  Many who are looking for a real estate mentor and apply to enroll in my mentorship are themselves ones who have suffered damage to their credit and possibly even lost their own homes.

That is why wholesaling is a prime avenue for newcomers into the REI home business arena.  In fact, you need neither a lot of cash or good credit to make a good living as a wholesaler.  Of course, real wealth will come through actual ownership of investment properties in time.  However, in the meantime, with the proper mentoring someone with neither a bunch of money or great credit CAN break into this industry.  I suggest a long-term plan, maybe 2-5 years if one wishes to become completely financially independent.  It is possible.  It is being done right now.

Certainly, without proper guidance, it’s not likely that it will happen anytime soon…if at all.  The key is first your attitude, then finding a seasoned mentor that you can afford with excellent teaching skills.  You can find self-proclaimed mentors anywhere, but do they really have valuable experience to offer and are they skilled in the art of teaching.  If you find a real estate mentor with those qualities you may have struck gold.

There are some factors, though, that you will want to be on guard for.  I will address those in my next article.

Permit me to rant a little about something that absolutely “gets my goat.”  It is the ongoing real estate investment scam of the century.  From the late night infomercial to the “free” webinars, there are a plethora of programs for sale by people who had successes in yesteryear and want to capitalize on that while they rest on their laurels.  What I mean is, there are a number of systems, methods and techniques that may have yielded profits in past markets yet they don’t work now.  The problem is that hundreds of thousands of unwary, but sincere entrepreneurs are being sold a stale product that is hardly effective anymore.

The responsibility has to be jointly carried, though, as it stands to reason that if a product is touted as an “end all/cure all” REI program it should suffice for a while.  It is almost laughable how the self-proclaimed “Guru” will sell the public on his/her system as if there was nothing better, only to hit up their list 3 months later with a “new and improved” program that the REI home business “cannot live without.”

From the 1970s till the present, I have observed the tall claims that these guys make and watched a seemingly endless number of REI program “junkies” buy up their inventory.  Sadly, the term “junkie” is most appropriate as these folks are addicted to buying programs with little hope of any measurable result.  They just keep buying this stuff!

After over 20 years as a highly successful real estate investor, making millions of dollars in the process, I came to the conclusion that a change was sorely needed.  It had to be something so revolutionary that one would never have to buy another REI “program” again.  In late 2008 I established a company that integrated comprehensive training and coaching of student enrollees with a personalized mentorship to see each deal through to closing.  I recognized that the ONLY way a real estate mentor would be truly dedicated to his student’s success was if there was a vested interest in their business.

That was when my good friend and I came up with the “Mentor for Life” Business Plan.” With this plan each enrollee/student acquired an exclusive territory, much like a franchise.  Under this arrangement, each territory is operated as a private business, yet in joint venture with me as their partner.  This has enabled me to tap into the nationwide market by partnering up with my students in local territories around the U.S..

That was a year and a half ago.  Today, I am proud to say that I have assembled an awesome team of dedicated, principle-based experts that I work with every day to that end.  As a team, we have refined our online Training Center, and put on state-of-the-art weekly coaching calls that are designed around the current needs of our T.M.s around the country.  In fact, the entire team is available for T.M.s via phone and email, especially when there is a deal in the works.  Personally, I am available whenever a student has a deal to close.  We are just as motivated as they are to get it closed profitably!

I am proud to say that, in fact, with the “Mentor for Life” Business Plan there would be no need to EVER buy another REI program again.  Because we have the resources, we are constantly doing research and development into the market, designing ways to stay ahead of trends.  As a result we may alter methods from time to time.

As an example, take short sales:  Are any investors handling short sale business exactly like they did in early 2009?  Of course not!  Times have changed and so must we.  A wise man once told me that there was one thing in life that remained constant: Change!  I am glad to say that in my “Mentor for Life” Plan my team works hard to stay ahead of trends so that our TMs continue to receive fresh, timely ideas, methods and techniques that address today’s market climate, not yesterday’s “leftovers.”

With all of the half truths and false hopes being pushed by the nation’s REI scam artists, I hope this article has placed the REI industry in a new light for you.  If you like what you’ve read and wish to obtain more information on the exciting home based business opportunities in real estate wholesaling and investment, please visit: www.realestatementorforlife.com as soon as you have a moment.  I hope to hear from you soon.

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.

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.