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Many of you may not know how or what it means to buy property using conventional financing. If you are new to real estate investing, the conventional way of acquiring properties is NOT the beast way to get started. Even if you are a seasoned investor, the traditional ways of buying property are not idea.
So, how do you buy properties using conventional methods? Simple, you (1) find the property, (2) pay the large downpayment (usually with your own money), and (3) pay the remaining balance through a lending institution. Lets not forget the lending institution will check to see if you have good credit, you have 20-30 percent to put down, and if you have a steady flow of monthly income.
Now, if the lending institutions let you borrow the cash needed to buy properties, you may have to spend time and money fixing up the dwelling, finding renters, taking care of maintenance, etc. However, in the end, you’ve built equity in your investment properties by appreciation over the years and paying down the loan. This is a good strategy but in my humble opinion, not the best or smartest one to use.
Everybody knows that real estate has created more millionaires than any endeavor. So, why aren’t more people investing in real estate? It’s because most people fear this opportunity and here’s why…
Pitfall 1: You Need a Large Downpayment. Lending institutions are hesitant about lending investors money to buy property. Why? Because the lending institutions may think investors are not serious enough about paying off the underlying loan because, 9 times out of 10, the investor will not be living in the dwelling. Lending institutions may also require you to put down 20-30 percent of the purchase price. If you only buy properties this way and keep putting 20-30 percent down, then your pockets will be empty while your property value is high. In other words, you will become “property rich” and “cash broke.”
Pitfall 2: Real Estate Investing is Very Risky. When using your own money to invest in real estate, it can become extremely risky. Why? The more money you have tied into a deal, the higher your risk factor. If you have $30,000 tied into a property worth $100,000, you can’t just walk away from the deal if things get ugly. The only way to lower your risk is to have little or no money tied into any property. Always try to keep your investment dollars at zero.
Pitfall 3: Negative Cash Flow (NCF). Though the idea of buying property to hold for the long term is good, NCF or negative cash flow can play a major role in your monthly profit from your renters. You may have $100 in positive cash flow on any one property but, if you’re always fixing broken toilets every month, then you’re generating NCF. What if the roof of your property collapsed. You as the owner will have to pay to have it replaced. You have to take care of both minor and major problems. Also, who is going to mow the lawn and take care of the landscaping? Even if you don’t do those things yourself, you’ll have to pay someone to do it for you.
Pitfall 4: Becoming a Tired Landlord. If you acquire a large amount of properties at any given time, you will become a tired landlord. This is when you become so involved in the day-to-day maintenance and managing of your properties. You’ll quickly start to see that you don’t have the time to go out and buy more properties, which is something you should be doing if you want to strike it rich in real estate. You could hire a real estate managing company to manage your properties but, you’ll waste time just making sure the company you hired is doing their job correctly.
You don’t have to go through the four pitfalls I describe above to make money in real estate. You have to become a smart investor. There are several creative real estate investing strategies you can use right now to get started making money in real estate. Strategies such as lease options, purchase options, wholesaling, short sales, and subject-to deals. These creative techniques will allow you to buy or control properties with little or no money down.
I hope this information served you well. Before I go I want to leave you with this final thought…
Smart real estate investing is the key to real estate wealth.
It is every persons dream, who lives in a “civilized” society, to live the lavish life. To be able to travel the world and buy the things you want and deserve without worry. To live in a big home in a prosperous community. To drive the best and latest cars. To wear the best clothes designed from the top clothing designers in the world. To send your children off to the best schools for the best education possible.
Some may even say… “In order to have those things I need to be rich.” It’s true, in order to live the kind of lifestyle I described above, you must have the income. However, you don’t need to be materially rich, you must first become mentally rich.
To me being rich is having knowledge of self, true happiness, and good health habits. You can be wealthy without being rich. And, you can be rich without being wealthy. Wealth is material possessions. Being rich is a state of mind. Being rich is being fruitful and having gratitude!
In order to become financially wealthy, you must first become mentally rich. You have to go to work on yourself. You have to learn the secrets of those who have achieved the level of success you desire. You have to become a master of time management, a master of spiritual growth, and a master of of self.
In order to live the life you deserve, you must find your major definite purpose and then go to work to make it real for you. Wealth will only come your way if you plan for it. By planning to acquire wealth you must first develop a rich state of mind by watering your seeds of greatness that’s within the soil of your subconscious mind.
In our pursuit of wealth, what we are truly seeking is freedom and unlimited choices!
So… in our pursuit of wealth the outcome is of least importance. What’s most important is the person you have to become to acquire the wealth and lifestyle you want. And, that takes persistence, dedication, commitment, discipline, willingness, and a positive mental attitude.
Learn to develop a rich mindset and watch your life take on a whole new meaning.
Have you ever thought about doing Joint Ventures but never knew how to begin?
What is a Joint Venture? It’s when two or more companies come together to form a temporary partnership for one or more projects.
Let me explain something before you even begin.
Most people think you can just send out hundreds of emails to prospects and they’ll jump on your offer like white on rice.
IT JUST DOESN’T HAPPEN THAT WAY!
If this were so, everybody would be profiting big time with joint ventures.
You can’t just send out emails to people asking them to promote your product to their list or place an exit pop-up on their ‘Thank You’ page of their order form.
Smart business professionals will simply delete your message and continue on with their lives.
You have to build a relationship with them first!
Why?
Because they don’t know you. People want to do business with people they know, like and trust. Any smart business owner will not promote your product if they don’t know who you are and if your product is legitimate.
They don’t even know if your product or service will convert browsers into buyers.
They’re not going to risk ruining their reputation on some sorry product that will put a virus on their customers computer or something even worse.
What if you don’t ship your product?
What if you don’t deliver on your promise?
These are the type of questions that will be going through your prospects mind.
You have to build relationships first and then pitch your product for the joint venture later.
Building a relationship could take days, weeks, or even months.
Here are a few steps to jump start your JV campaign:
Step 1: Locate potential prospects and sign up for their newsletter to see if their customers are the same customers that will be interested in your product or service. It will be a waste of your time and your prospects if your product does not relate to your prospects target market. Do some research and sign up to their newsletter. This will be a great way to investigate your prospects customer database.
Visit www.Alexa.com and download their tool bar. For every page that you land on, the tool bar will give you that sites traffic rank and company information.
Step 2: After you’ve located potential prospects and signed up for their newsletter it’s time to call them. Yes that means picking up the telephone, pressing the keys, and talking to them verbally. Don’t send out emails. Overcome your fears and call them.
Be polite and make sure your not interrupting your prospects. Their time is important just like yours.
Ask then questions about their business and how you like the content of their website. Complement them on the great work they’ve done.
During your conversation you should be asking questions 99% of the time. You need to become the listener and never interrupt.
Why? First off it’s rude to interrupt and at this point, your prospect doesn’t know you and therefore doesn’t care about you or your business.
The goal is to build a rapport and get them talking about their business and their accomplishments. Everybody loves to talk about themselves when giving the opportunity. 🙂
Remember, people want to do business with people they know, like and trust.
During your conversation ask open end, emotional questions like;
“How did you get started in your line of work?”“What sets you apart from your competitors?”
“What advice would you give future entrepreneurs?”
And the most important question;
“How can I tell if someone I know or meet is a good prospect for your business?”
This question is very important and you should ask it with great interest. You have just told your prospect that you care about them and the success of their business on the first call without looking for anything in return.
Asking questions like this and building a positive relationship with your prospect will result in direct business and tons of referrals for you in the future.
Step 3: After the conversation it’s time to follow up with an email or postage note. Mail the note the same day of the conversation. This note does not have to be long, in fact it should be about one sentence long.
If you use a postage note, I recommend you use a postcard (8 x 3.5 inches) with your picture and business contact info or notepad with the same contents and MAKE IT PERSONAL.
When writing your follow up postage note, use blue ink (studies show that blue ink is more effective than black ink or any other color). Your note should read;
“Hi Joe or Jane (Mr. or Mrs.),Thank you. It was a pleasure speaking with you over the phone. If I can ever refer business your way, I most certainly will.”
I suggest you place your postcard in a number 10 envelope hand addressed and hand stamped. Do not use a impersonal mailing label or postage meter. KEEP IT PERSONAL.
Follow up with your JV prospects and all other contacts on a consistent basis. Consistency separates the rookies from the pros. What category do in fall under?
Step 4: After you’ve built a relationship with them and it‘s the RIGHT TIME, pitch your joint venture offer. Offer them a commission of 50% or even 75%. You have to remember something. Once their customers buy your product, their customers now become your customers and you can up sell back end products to them forever… and keep 100% of the profits!
Be generous with the commission structure. They’ll appreciate it.
A good commission structure will also motivate them to promote your product or service.
Make sure you have a sales letter that converts. By this point, you should have tested your sales letter and have statistics to prove it.
If your sales letter does not convert, you risk the chance of losing your JV prospect forever and ruining you image by looking unprofessional.
I suggest that you try to set up at least 12 JV’s to really explode your sales and build future relationships with your prospects.
Once you’ve built a relationship with your prospects, you have a proven sales letter that converts, you deliver on your promise, and you offer your prospects a generous commission…. they’ll be eager to promote your product well into the future for many years to come.
This means more leads, more sales, and FREE ADVERTISING!
Self Mastery University 