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.

That is the question.  Depending on whom you ask, you may get an amusing variety of answers.  In theory, loan modification should be an equitable arrangement in which the bank avoids taking back a property from a family that is in hardship.  The family, in turn, would likely avoid losing their home and taking a broadside hit to their credit rating.

That was the hope of the U.S. government when they decided to “bailout” the banks.  Some of the money that went to these troubled banks was allocated for helping approximately 750,000 troubled families to save the family home.   The idea was to reduce the monthly payment to an acceptable level….maybe even some of the principle.  All would work well if everyone cooperated and tried to do the right thing.

Well, guess what?  Out of that huge number only 7,000 got modifications to their mortgages.  What happened to the rest of these unfortunate homeowners.  They ended up getting the “short end of the stick.”  Even now, it takes 4 months just for an applicant to get a reply.

As a result, attorneys are working to protect families across the country from the predatory practices of many banks.  Now banks, attorneys and others cannot accept money from homeowners seeking a loan modification until one has been successfully obtained.  But what about the many who have helplessly been relying on their lender for some relief?

One terribly wrong practice that has become commonplace is for a bank officer to suggest that the homeowner must go into default if they want the bank to “buy” their hardship story.  Imagine if you had stopped making your payments, received a N.O.D. (Notice of Default) and 4 months later get notified that you’ve been turned down for your loan modification?  In some cases, families have even gotten their notice of foreclosure auction while patiently awaiting a reply from the mighty bank.  Now their credit is shot, they will have to move and they are further away from a resolution than before applying.

Suppose, though, that a family took the short sale route.  They call a qualified short sale consultant and chose to stop making their payments, all the while saving every dollar for later.  Yes.  They will have to move…..eventually.  But in 24 months their credit can be repaired.  In addition, they will have gotten out from under the burden of debt that loomed over them relentlessly.  Honestly, we have to acknowledge that the banks have brought this on themselves by their greed and insensitivity.

Of course, each case is different and each family must decide for themselves which direction to go.  Nonetheless, the notion that the banks will be true to their fiduciary responsibility to the consumer has been dispelled.  Protect yourself!

“No man is an island” is an expression that best explains the subject of today’s discussion.  The world of real estate investment is no different for the small, home-based investor than any other industry.  It is always harder to “go it alone.”

There is always strength in numbers.  That is why I have long stated the need to attach oneself to a solid, stable REI group, if possible.  The better organized the group, the bigger the benefit to the individual REI businessperson.

Take, for example, marketing.  If an individual decides to start advertising his business he will have to go through all the same steps that a larger conglamorate may perform.  Yet, the larger group will enjoy more “bang for their buck” because of sheer volume.  In the virtual world of the internet the same tasks are performed for both large and small businesses.  Why not pool efforts so as to keep costs to a minimum?

It really bothers me to see so many sincere folks spend their last dollar on another REI program in which they are still left to their own devices.  Imagine if they had connected with a group of experienced, motivated entrepreneurs in a non-competitive environment?  Their time and money would be put to much better use while they hunt for those illusive “killer deals” we all salivate over.  An example of one such group is found at www.invesdoor.com/mentor.htm.

Suppose you decide to start a list of cash home buyers for wholesale deals you wish to “flip.”  You hunt high and low for someone with all cash to purchase your house for sale.  The deals just don’t come often enough.  You have nothing for them and you lose touch with your prospective customers.  This is a sad scenario when we weigh in on the hard work it takes to secure cash home buyers.

Imagine, though, that you were part of a network that kept your buyers interested via the internet and maintained your relationship until you do have another cheap home for sale.  This is just one way that networking can maximize the effectiveness of one’s marketing budget.

Another advantage of such a group is the constant input of new methods and techniques.  The website referred to earlier is a non-competitive group under a mentorship program in which each member manages his own territory.  Thus, no two real estate investors can use any of the proprietary systems in the same area.  There are, of course, other fine networks out there.  National is always best in the long run.  Do your research.  No two are exactly alike.

The important thing is the results.  Remember this:  Efficiency is great, but effectiveness is better.  Look for the network that is enjoying results while growing their individual small businesses.  You’ve chosen the right industry at the right time.  Now go out there and make it happen!

As you may already know, I have been a wholesaler of real estate opportunities for quite a few years now.  One thing you may not know, however, is my secret key to consummating deals.  Today I am going to reveal this well-guarded secret to the world.

Let’s take an example from the many sincere folks losing their homes and selling them short.  It’s no secret that their credit will take a hit broadside for no less than 2 years…and they will be required to work hard to heal the damage done during that ensuing 24 month period.  No one wants to talk to them.  Landlords are skeptical about renting to them and banks refuse to acknowledge their very existence.

The gnawing question is:  Is there any hope for the millions of homeowners nationwide in this predicament?  Thanks to the ingenuity of some highly savvy, creative entrepreneurs, the answer is:  “probably.”

The grim truth is that without good credit, institutional lenders have traditionally turned their proverbial noses up at folks like the foregoing.  Therefore, the answer lies outside of the traditional “box.”  Yes.  Banks are not the answer.  Rather, they are the problem.  If a sincere family wishes to become or even remain a homeowner, with the subsequent tax advantages, they must break convention and seek financing elsewhere.

Tighter restrictions on bank lending have crimped the styles of real estate investors as much as they’ve hurt wannabe homeowners.  Nonetheless, the investment-capital vacuum has sucked in a strong stream of private money, including the retirement funds of ordinary people.

The best of both worlds – upside potential and a healthy interest rate – is the reason for a hybrid investment vehicle that will be offered by Invesdoor Corp. after the first of 2010.  For te most part, money is coming in from private investment accounts known as IRAs which many Americans have, but don’t manage to their benefit.  These funds, while filtered via a 3rd party custodian, cannot be physically handled by the owner.  They can only be allocated to their designated use in which a much higher return is enjoyed, thus growing the retirement account at an accelerated rate.

In the U. S. today, there is a growing segment of the homebuying population that has outpaced any other.  Know what that is?  It is single women.  That’s right.  For several years, now, this trend has been on the rise.

For about 15 years the number of unmarried women owning homes has risen dramatically.  In fact, the latest NAR profile of homebuyers and sellers now has the figure at twenty-two percent.

There are, of course, several factors that have lead to this increase.  Certain demographic trends are responsible.  For example, improved education has enabled more women to pursue careers and seek financial independence.  As a result many young women have delayed marriage.  The increase in purchasing power has not gone unnoticed either.

Women own and operate 38% of all businesses in America and comprise 40% of the business school graduates.  Now add to that, interest rates at history-making lows along with home prices that are making their own history.  What do you have?  It’s a perfect storm.

As if that’s not enough reason, there are others factors, too.  The supply of housing is incredibly high and continued government attempts at stimulating the economy further fuel the increase of single women homebuyers.

Women by nature tend to do more research, spending a longer period of time in their home searches.  Interestingly, they will more likely make needed home repairs.  You might be surprised to know that nearly half of all the  purchases made in the “big box” home-improvement stores are made by women.   In the last 5 years, ninety-four percent of women who own homes claim to have completed a home improvement project during this period.

So, if you want to tap into this growing market you may wish to consider the following:

·         Try condos as women find a sense of security in this type of community

·         Deal with homes that lend to a home office

·         Aim for low maintenance yards

·         Allow for ample storage

·         Natural light is important, especially in the master suite

Finally, if you are a female real estate investor you may do better with these buyers/sellers.  Women traditionally trust other women a little more.  Don’t feel bad, men.  They just feel better understood by another woman.  Go get ‘em, ladies!

You worked harder than you ever thought possible to get through college and land that corporate dream job.  Life was good….until reality set in.  Right?  The grim reality is that for most, their chosen careers meant very hard work and inadequate compensation for their time.  So one day you made the decision to stop working for ‘the man’ and break out on your own.  Start your own business. 

Your decision to start your own real estate investment business is one that you will not regret…provided you do it right!  Unfortunately, most start-up businesses fail a short time after they start.  The reasons are many and varied, but the truth remains that it just doesn’t pay to try and go it alone!  Remember the old adage: “No man is an island.”

Today we are going to discuss the advantages of working with a group in your own Real Estate Investment business. Isn’t it true that one person simply cannot wear all the hats in a working business?  So why try?   There is strength in numbers.  And the best way to grow and be profitable is to work with skilled people in each area of business management.

For example, there is sales, marketing, accounting, office/personnel management, advertising, website development/maintenance, ongoing education, etc.  We could go on and on about the many facets of a business.  What kind of accountant do you suppose a salesperson might be, vice versa?  Certain personality types lend themselves to certain patterns of thought.  Wouldn’t it be unfair to ask your accountant to handle your sales as well?  Usually so.

Now imagine yourself associated with a group of investors in a sort of network.  You share a common buyers list.  Perhaps you all have access to the same training materials.  What if you all used a shared internet marketing machine developed and managed by some of the best in the industry?  And let’s say you had someone experienced with whom to discuss your deals and seek advice whenever you felt the need?  Each of the foregoing questions address some of the areas in which private investors have longed for support. 

One fear that independent real estate investment professionals have is that of competition.  As with any industry, competition exists and can kill deal we work so hard to put together.  If one is to work with a group as discussed earlier, he/she would have to have assurance that their privacy and autonomy was respected.

Imagine if you could enjoy all the benefits of an investment group or network without fear of competition from your associates.  What if you had a designated territory that was owned and managed solely by your private business, but carried the power of a much larger brand than you could exert?   That kind of opportunity exists today at one national company.  There the training, materials, mentoring, marketing, etc. is all provided for the private business person seeking to sell house cash deals to cash home buyers.  In turn they joint venture with the company.  This type of business model has great potential because it allows the individual business to operate at their own pace while providing all the support in each of those vital areas already mentioned.

Remember this:  There is no longer a need to go it alone.  Help is available to serious private business people with a determination to succeed.  Why not investigate the available networks that you can join.  There are groups for every level of involvement out there.  Don’t let the ominous economic climate deter you from your objectives.  You can do it with a little help from your friends.

A number of realtors across the country can be heard making claims that we are ‘finally in a recovery.’  They like to site the summer’s sales figures as evidence.  Let’s examine the facts so we aren’t mislead by, for all intents and purposes, the sales people.

The labor Department has reported consumer prices rose 0.2% in September.  For the year, consumer prices are down 1.3%.  This provides the Federal Reserve incentive to hold interest rates at record-low levels with the idea of giving the economy a needed boost.

In the week ending October 10, initial claims for unemployment benefits fell by 10,000 to 514,000.  This figure came in a little lower than expected.   The number of people still claiming jobless benefits in the week of October 3 fell by 75,000 to 5.99 million which is the lowest number since last March.  Sound encouraging?  First consider this:

From National Association of Home Builders:  “The pending expiration of the $8,000 first-time buyer credit made for a disappointing 1 point dip in the October housing market index to 18, according to the NAHB.  All components dipped in the latest report especially traffic which fell 3 points to 14. The results hint at a step back for housing which had been on the rebound thanks to government stimulus.”

From Associated Press:  “The Commerce Department released its monthly report on housing starts Tuesday, saying they increased in September by a modest 0.5 percent to an annual rate of 590,000 new homes and apartments. Applications for new building permits, however, fell by 1.2 percent to an annual rate of 573,000 units.”

The facts tell a bit of a different story!  In the light of the current economic trend many savvy, educated and well-employed families with 6-figure household incomes are assessing the damages and opting out of their homes now.  This will clearly fuel the foreclosure fire for some time yet.  Luxury homes will be – in fact, already are in default like never before in our lifetime!  That’s right.  The next wave of foreclosures will bring a flood of higher-end properties!

I have stated for some time now in my blogs, speeches, webinars and on my website, that this thing isn’t over yet – far from it.  I do not see millions of educated, well payed Americans all taking the housing value implosion sitting down!  The American way has historically been to take more than you give.  Most people will not accept this short fall of hundreds of thousands of dollars.  They will wrestle with the moral dilemma for a while but, in the end, will do their best to sell their home short and cut their losses.

In the long run, they will have taken a hit on their FICO scores that will be sustained for at least 2 years. Once their credit has reached an acceptable level they will purchase again – this time, at a much lower price.  Do the math.

At this juncture I must interject the personal note that I do not agree with reneging on any contractual arrangement and I will not encourage anyone to default just for the sake of escaping their obligations.  Nonetheless, my company had aided many families to find solutions once they are already in default.  This means even providing them the opportunity to remain homeowners even when they have had to short sell their home.  Remember this, it took America years to get to this point and it is not going to suddenly correct itself unless we learn to discipline ourselves and control our spending habits.  Don’t hold your breath waiting for that to happen!

It is amusing to me to hear the variety of opinions on the economy.  It’s funny how “experts” seem to emerge onto the scene while people grope for answers that would, hopefully, reveal a ray of hope.  Nonetheless, our economy will do what it will do regardless of what the pundits predict.

Earlier this year many housing markets across the country saw a 60% decline in retail values before the summer.  Then the typical occurred.  The 2nd and 3rd quarters enjoyed a slight gain in some markets while in others at least a slowdown in falling prices.  Now some realtors are so bold as to predict a slow steady rise in home values.  Yes, they will have us believe that it will be smooth sailing in the housing market from here on in.

Let’s examine this line of thought.  Better yet, we will look at the facts and see whether or not these guys are really in touch with reality.  Most of us have heard of the principle of “supply and demand.”  It’s really very simple.  Price is predicated upon the demand for a product balanced by its availability.

Back in spring 2007 potential buyers began to hold back after observing a winter where over-inflated home prices were no longer inflating.  When the seasonal market opened in the 2nd quarter buyers were now reluctant to pay prices without regard for the usual cautionary considerations like before.  It was a bit of a sobering time for many.  Since then deflation has been the trend.

Now, traditionally families prefer to move during the school summer break.  How many are content to transfer their family’s residence once school is back in?  Not most.  Hence, there is greater demand during this time and prices are logically driven upwards…….even if only a little.

Recall the federal mandate to banks temporarily holding up the flow of foreclosures hitting the market.  This occurred nationwide during this time of greater demand.  Where was the supply now?  With a sizeable percentage of all listings on the market held back (foreclosures), the falling values across the board would naturally slow if not reverse slightly.  And that is exactly what the market experienced.  The supply was lower while the demand was higher.

What, then, does this spell for the near future?  Well, peak season came to an end and September brought a new flood of foreclosures hitting the streets.  The tables had turned once again and now supply grew while demand diminished.  The massive number of foreclosure files yet to be processed is an indication of a steady supply from desperate sellers.  Thus the trend will likely continue in a downward direction at least till next spring.

Furthermore, the profiles of families in default have evolved from the subprime arena to “A paper” loans to families who could, in fact, stay in their homes but will opt out for financially sound reasons.  These are folks who are a bit more sophisticated and may have larger household incomes than the prior group.  Many could still make their payments but choose to get out from under the huge debt that the market has dealt them.  Many families see a quarter million dollar sink hole (or more) and will choose to short sell the home, wait 2 years and buy the same home for much, much less.  Notwithstanding the moral dilemma, many find that it just makes good economic sense.

The foregoing scenario presents some interesting real estate investment opportunities for the cash home buyer.  That’s why we buy homes all over the United States during these market conditions.  While the market trend may not be as favorable for the retail buyer, cash homes buyers in most U.S. markets are making insane profits by skillfully applying the simple principle of “supply and demand.”

“Buy low, sell high.”  These words have continued to ring true throughout history.  As with any timeless principle, some things never ‘change with the times.’   As author George Clason stated  in his book The Richest Man in Babylon, that this basic principle of finance is ‘an insight that will aid one to acquire money, to keep money, and to make their surpluses earn more money.’

It is amazing to me how such a simple concept can be so foreign to the majority of people inj society.  They imagine having lots of money and freely spending like their supply is limitless.  Without regard for how hard money is to come by, new lottery winners are soon bankrupt when their “supply” is sadly exhausted.

It really comes down to discipline, doesn’t it?  If one cannot discipline himself to budget hie funds, account for depreciation, discern markets in advance and allow for a financial “rainy day,” he will soon be in the poor house.  Thus the expression: “A fool and his money are soon parted.”

This is one reason so many suffered heavy losses in the real estate market starting late 2006.  Without regard for the grossly inflated market conditions, many continued to buy and/refinance properties, indescriminately enjoying their new-found “wealth.”  Nonetheless, their losses can be our gain.

Applying the principle to “buy low, sell high,” savvy real estate investment professionals everywhere are cashing in.  They have seized the opportunity by buying cheap homes and either “flipping” them for a quick profit, or they rehab and manage as an income producing rental for long-term gains.  Cash home buyers have a distinct advantage as they can avail themselves of wholesale deals on properties that others cannot acquire using conventional financing.  Banks just operate fast enough.  That’s why we buy houses for cash all the time.

Presently there are hundreds of real estate “wholesalers” across the United States.  These businesses are often operated on a local level and often out of the wholesaler’s home.  In fact, they provide a very good service to cash home buyers everywhere.  They may lock up a purchase in contract and subsequently assign that contract to the first buyer that comes with all cash.  They take a modest profit say, 10%, and leave the major margin for their buyer at 20-30% below market.

One such company is now offering deals in numerous markets simultaneously.  They are known as INVESDOOR CORP. and have territory managers in several metropolitan areas.  You can visit their website at www.invesdoor.com to see how they have turned a negative economic condition into an extremely lucrative one.

There are still millions of foreclosures to hit the streets in 2010.  This will tend to hold off any “recovery” in the housing market prices nationwide for some time to come.  In the meantime, opportunity knocks constantly every day and will continue to offer real estate investors great deals on cheap houses providing huge profits as a result.  Yes, eventually prices will inch up, but we will likely never see this kind of opportunity again in our lifetime.  In this market you would be hard pressed to sell your home fast any time soon.  But if you are looking to break out into your own REI business, now is better than ever!

Strapped for cash!  Economic uncertainty!  Fear of the unknown!  These are some of the emotions that govern the thinking of most people today.  Nonetheless, the fact that real estate investment is still the smartest way to achieving financial independence remains irrefutable.

Wasn’t it Carnegie who originally said to “get aggressive when everyone is fearful, and be fearful when everyone is aggressive?”   Recently Warren Buffet was quoted as repeating the same adage.  If these famously wealthy businessmen agree to that strategy, then one has got to get busy now!

Earlier this year I was in San Francisco and saw a billboard.  It read:  “Bill Gates stared Microsoft during a recession.”  Are we seeing a trend here?  It would seem that the most successful see opportunity where others see peril.  Are you programmed like these entrepreneurs or are you like the majority of the world’s population…motivated by emotion?  If you feel you are in your element with these great history-making men, then you likely see that we are at the right place to create wealth in this housing value decline.

More pointedly, I believe we are facing the perfect storm for cash home buyers across the United States.  The secret is out and many Europeans, Asians, Middle-Easterners and others have recognized that America is on sale and they are already scooping deals on our home turf every day!  So, to answer the question at the top of the page:  Yes.  Only IF you see the “glass half full.”

Before embarking on any business venture it is always wise to do your research, set a mission statement and plan of action.  Before that, though, one must do some soul-searching in order to determine whether he or she is proceeding with the mindset of the great entrepreneurs or plagued with the typical negativity of the general populace.  Make sure you have a clear vision of the opportunity and determine to KEEP that vision clearly in mind.  Maybe even write it down and hang it on your refrigerator door, but do it.

It is imperative that a new real estate investor seek the right groups and networks in order to conclude deals with ease, moving quickly onto the next one.  A website you can check out is www.invesdoor.com for an example of a reputable group.  They have an extensive buyers list from all over the world and independent territory managers nationwide.

Another factor that has played into the success of most if not all wealthy capitalists is having a mentor.  There has usually been someone behind the scene coaching and leading by example.  Ask anyone who has done something of high significance and they will likely tell you of those who inspired them.  The REI market is no exception.  We all need a mentor at some point.

Unfortunately, there is no end to the “gurus” wishing to sell us some “program” for a lot of money.  In reality, their responsibility ended when your payment was processed.  In my opinion, it is best to find a mentor willing to teach you and then partner up with you for a time, splitting the profits off each deal.  That’s what your business will need entering the uncertain market conditions of the future.  So cheer up!  Do some self-analysis and adjust your thinking to “positive.”  Opportunity is knocking.