REIA meetings take place in different cities throughout the country and every city has its own association. The purpose of these meetings is to develop a network or chain of real estate investors. They guide the ones that enter the market and learn from those who are already in the market and have a good grip of it.
Not only do people learn and enjoy these REIA meetings but these meetings give people a chance to interact and get to know more investors. These meetings have now become a platform for the networking of investors. These meetings serve the purpose of expanding the real estate circle. Just a few years back, real estate was a small market and people were scared to enter it or try their luck here. But now it is one of the biggest markets with many people investing their money on land with the intention of earning some extra income.
Investors can join in as guests or take membership of REIA, as these associations provide a wide forum to all the investors to introduce their products and get to know about others. These meetings are usually held at the beginning of every month and they update investors about the market and its conditions in previous months. They also forecast about the coming month and how the market will be. No matter if an investor is new in the market or is a millionaire, everyone learns more and more through these meetings.
Other topics that these meetings shed a light on include; learning how to become financially independent as an investor. These meetings provide investors how to retain their wealth once they start making it and keep the cash cycle rolling. When an investor makes a gain he needs to reinvest and all these techniques are taught in these meetings, for those who don’t have much information about real estate.
Real estate has a wide scope and these meetings teach how one can explore other avenues and how they can make more profits by entering these avenues one at a time. The best part about being a member at an association is that one gets to be in the midst of ambitious and proactive people who form a society of real estate investors. Not only investors get to learn through these meetings but they also get a chance to share their experiences with others and get their perspective on it.

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Going deep into debt is generally considered a bad thing. People don’t like the idea of being at the mercy of a creditor, whether it’s Ebenezer Scrooge, MasterCard, or their neighborhood banker.

Fear of debt causes some investors to pay 100% cash for properties, which is a lousy way to leverage their money. Owning a building with zero debt (no mortgage) does not give you the best return on equity. Yes, your cash flow is great, but look at how much you had to invest to generate that cash flow.

Let’s say your Aunt Nellie left you $1 million. You could buy a $1 million apartment building with 6 units and pay all cash. If the units each generate $1,000 a month in rent, you’re $1 million gets you $6,000 a month.

However, if you split the $1 million into the down payments on five 6-flat apartment buildings (30 units total), your $1 million gets you $30,000 a month in rental income. You have mortgages now, of course, but you control five times the equity. Which is why I say, don’t just tell me what your cash flow alone is. Rather, tell me by how much cash flow you generate compared to how much you invested.

Effectively leveraging your cash and managing your debt gets you a higher ROE (Return On Equity). Going into debt can be a very good thing. In fact, it’s how you get ultra rich.

Choose your lenders as carefully as you choose your properties. Here are 5 major money sources:

Local Banks: Neighborhood lenders generally have shorter terms and higher interest rates. They like to keep their loans close to home and work with people they know, thus you can build long-term relationships. When you need money to rehab, use a local bank.

National Lenders: The big-name banks tend not to hold the loan. Rather, they sell it on the secondary market. Use a national lender when you have a straightforward deal that does not require creative financing.

Conduit Lenders: When you get into the big leagues and want to borrow millions of dollars, you can approach Wall Street. Firms like Citigroup pool their loans into mortgage-backed securities that they sell on the open market. Other mega lenders include insurance companies and pension funds.

Private Investors: If you’re just starting out, your most viable path will be to partner with private investors. You can quickly get the down payment or even enough funds to pay 100% cash. A student of mine went to his first local investment club and within a week had $250,000 in funds committed from private investors.

Friends and Family: Finally, although you can’t choose your relatives you can choose whether or not to borrow money from them. Just remember that any dysfunctional relationships your family may possess will likely be put on steroids when money is involved. And perhaps nothing ruins a friendship faster than borrowing money.

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Your job as a real estate “rainmaker” is to find the deal and make it happen. Leave the building management and operations to others. The big money is made in the deal and that’s where your time is best spent.

Obviously you want to focus only on stellar deals. Forget the marginal ones. It takes just as much time to work on a deal that brings in peanuts as it does to lock down a deal that makes you wildly rich. There are 6 red flags that tell you quickly if a deal will be a time-waster. If you spot just one of these 6 warning signs, move on to the next potential property.

1. The numbers don’t add up.
The bottom line is you want to make a lot of money. If the numbers don’t add up and the seller won’t drop the price, or you can’t get better terms, move on.

2. Missing numbers.
If the seller can’t provide you with the year-to-date profit and loss statements, plus the actual numbers from the previous two years, move on to another deal.

3. Made-up numbers.
Pro forma numbers are pure guesswork. They may be educated guesswork, but they are still a projection. Lenders won’t give these made-up numbers any weight and neither should you.

4. Troubled property.
A property may look good on paper: The numbers are real and they add up. But a site visit paints a different picture… Major repairs are needed because the seller has been deferring the maintenance hoping to pass the headache on to the buyer. Don’t let it be you.

5. Wrong area.
Don’t spend your money trying to reverse a trend. If the neighborhood is in decline, the property carries that stigma. Tenants will be moving on, and so should you.

6. Months on the market.
Good properties go fast. Bad properties linger in the listings for month after month. With detective work you can figure out why it’s a dud. And that’s a viable learning experience. But your time will be better spent going after good deals.

You create a beautiful garden by getting rid of the weeds. It’s the same with building a real estate portfolio: you must quickly weed out the lousy candidates and focus only on the prime properties.

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A double-dip is great if you’re talking ice cream. But if the subject is the U.S economy it’s not so good.

Some experts predict the economy is headed for a double-dip… a very rocky road indeed. The culprit is consumer confidence, which is dropping fast: March saw the 10th steepest decline on record. Gloomy consumers purchase less. And since homegrown U.S. consumers account for 70% of our economy, that spells trouble.

Why are U.S. consumers depressed? A possible war with Libya and the meltdown of Japan certainly made for gloomy headlines. But other factors are closer to home and our pocketbooks… Hourly wages continue to fall, which deflates consumer confidence like a pin to a balloon. And home prices continue to decline, which makes people feel poorer as their primary nest egg evaporates. The S&P/Case-Shiller 20-City Home Price Index dropped 3.1% in the year ending this past January, which has some housing industry watchers predicting that the market bottom has not been reached and a double-dip is just around the corner.

You’ll always get conflicting predictions on the Web. Take the idea of buying a home right now… One expert will point to the combo of cheap prices and low interest rates and say it is a great time to buy. Another expert will say signals are mixed and you should wait at least until the foreclosure backlog stops depressing prices. Still others say houses don’t beat inflation and you should rent.

So… should you wait until consumer attitudes improve before you invest in commercial real estate? Well, that’s kind of like striking gold but waiting for the price of gold to rise before staking your claim.

Let me explain:

If you do your real estate homework and follow my strategies, you’ll have found and negotiated a stellar real estate deal that gives you positive cash flow, instant equity, and possibly a big check made out to you at closing. Plus, the property will be in an emerging real estate market that has it’s own micro economy acting independently of the national trend. There’s no reason to put on the breaks, no matter what economists, politicians and pundits are predicting on the web.

When you have a great deal, you have a great deal. And that alone is all the reason you need to take action.

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We live in the age of the social network. Just as the Agricultural Age was railroaded by the Industrial Age, which was given the pink slip by the Information Age, it can be argued that we have now entered the Social Age. Networking on Facebook has become a national pastime. I would not be surprised if it clocks in more hours than football, baseball, and video games combined.

Networking is certainly an essential part of almost everyone’s career. Networking is especially important for real estate investors. It is how you find pocket listings… get inside information to analyze markets… find private investors to fund your deals… and locate trustworthy people to manage and maintain your properties. Whether you stick to your hometown and invest in local properties, or follow the trail of opportunity to emerging markets far from home… networking is how you build your power team.

Networking is also how your personal reputation spreads. All of which means if you do not have networking plan, then you’re probably going about it haphazardly and sporadically—and thus you’re not making the most of the opportunity.

You can build a good reputation by adhering to 3 simple rules:

1.       Say what you’re going to do and do what you say.

2.       Don’t be a pain in the butt.

3.       Make doing business with you easy.

A reputation for being direct, honest and trustworthy is a prized asset. But lets face it, any nasty S.O.B. can also have a reputation for being direct. That’s why it’s also important to distinguish yourself being easy to work with. Some contractors may even choose you over other jobs where they’ll make more money because they know you present fewer hassles. Being nice pays off.

Time is Money For Everyone Involved

You can also add a fourth vital characteristic of a good reputation: timeliness. Just as you appreciate vendors who meet due-dates and don’t waste your time, others will appreciate the same from you.

When you’re checking references, it’s okay to ask how timely, honest, direct and easy to work with someone is.  After all, people will be asking the same questions about you.

Another “Age” will inevitably come along and people will log off of the Social Age. In a sense, it has always been the Age of the Entrepreneur whether farmers, industrialists, communicators, or Internet junkies ruled the world. As an entrepreneur, you know how important it is to maximize all resource available to you. Don’t overlook the emerging power of the Social Network.

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Ask 10 people on the street what “Cash Flow” is and it is likely 10 people won’t have a clue. That’s why none of them are millionaires.

Cash Flow, of course, is the tide of money that flows in and out of your financial life. When you have more money going out the door than coming in, you have the average debt-burdened American.

To be rich you need POSITIVE CASH FLOW, the 3 most powerful words in the English language (or any other language you translate it into.)

“Positive” cash flow means you are just the opposite of the average American: you have more money coming in than going out. Reaching this point was the definitive game changer in my life. You ought to write “Positive Cash Flow” on your bathroom mirror because this is the ultimate prize. It sets you free.

Now if you’re job brings in more money than you need, that’s great. But you’re still WORKING. With real estate, the cash comes in whether you work or not.

Here’s how positive cash flow creates effortless wealth with real estate…

Say a tenant pays $1,100 a month in rent for Unit 101. And this unit’s share of the mortgage and other building expenses is $600 a month. That’s gives you $500 a month in positive cash flow. You’re making $500 while the tenant pays off every penny of your investment.

Multiply $500 by every unit you own… a 3-unit building gives you $1,500 a month is extra cash… a 6-unit gives you $3,000. Life is good.

The money doesn’t end here. Your building is increasing in value. And there are big tax benefits. I hope you’re starting to see why owning an apartment building is better than a goldmine. During the Gold Rush days more than 99.99% of the prospectors went bust. But the entrepreneurs who sold them picks and shovels made millions. They had tapped into the real Mother Load: cash flow.

I want you to be the rich entrepreneur offering a basic service everyone needs: a roof over their heads. It’s a great trade off… you provide people with a place to live… and they provide you with Total Financial Security.

Financial freedom is a great thing. Look at what comes with it…

- No more unpaid bills piling up.
- No more credit card hassles or late payments.
- No more feeling you’re at the mercy of the economy.
- No more bosses or worries about keeping your job.

I could go on, but you get the point. Financial free is liberating and Positive Cash Flow is what makes it possible.

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Knob and tube wiring was very commonly used in the last century and if you are looking to buy a home that was built somewhere between 1880 and 1930, then you will probably find this kind of wiring in the house. No one uses this kind of wiring right now. We now have more loadbearing kinds of wiring and we need them too simply because of the fact that we use a lot many electrical devices than we were using back then. Hence, if you come across some property that has knob and tube wiring, you have to be very careful about it. It may not be the best idea to buy such a property, unless you intend to change all of its wiring, which could hike the expense of living in the house.

The knob and tube wiring used open wires, mostly made of copper, running through the floor or any flat line and held together by means of ceramic supports which were known as knobs. The knobs were used to support the wires on the flat surface and they were also used when wire intersections needed to be made.

Quite understandably, this kind of wiring poses huge electrical hazards. In those old homes, these kinds of wirings were installed in ‘safe’ rooms, which people didn’t frequent much. This was possible in those times because homes were bigger and people could afford to have a room solely for their wiring needs. Also, there was the fact that people had grown accustomed to such a kind of wiring in their homes and they knew how to live with it. In today’s times, it is simply inconceivable to have such a kind of wiring. The open wiring can be fatally dangerous to people living in the house, and we certainly don’t know how to live with such a kind of hazard. We cannot even begin to describe how lethal this kind of open wiring system could be to pets and children in the house. Knob and tube wiring is best avoided; there are no two ways about that.

You will find homes in which knob and tube wiring is present and insulated. Your real estate agent might tell you that because the wiring is insulated, it is safe. However, this is not the case. Knob and tube wiring can heat up the room significantly, and if such heating happens a lot of the time, it is possible that the insulation will melt down. This can pose a big risk of electrical fires and shocks. So, insulated or not, knob and tube wiring is always perilous. And, if you read between the lines here, you will have understood that knob and tube wiring can cause your home to become unduly hot.

Also, such wiring is only capable of driving a small amount of electrical power within the house. In those days, most of the electrical and electronic gadgets that we use today weren’t discovered. People still relied on their fireplaces for warmth and there were simple iceboxes to keep their foods cold. Today, each room consumes more electricity than a whole neighborhood did in the 1880s. Definitely, knob and tube wiring is not cut out for our electrical usage in the 2010s.

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If you are in the fortunate position of being able to afford to buy a house using only cash, and with no requirement to rely upon the additional support of a commercial lender in order to make up the shortfall of the asking price, then you need to be aware that you will be required to produce some documentation.

The reason for the need for purchasers who conclude a transaction using cash only to produce relevant documentation is to prevent, deter, detect, and catch fraudulent and criminal activity.

Specifically, many criminals seek to launder their ill-gotten profits that they have made through their various criminal enterprises by the purchasing of real estate with cash. By making a large purchase with their dirty money, they then have a plausible and legitimate excuse for having such a significant amount of wealth to their name and so this can further muddy the waters for law enforcement who are trying to competently investigate the conduct of the criminal.

That said, purchasing a home with cash is actually much easier and speedier a transaction than by paying with alternate forms of credit such as with a home equity loan or mortgage, and the level of paperwork involved is fairly minimal. Once you have identified a particular property that you are interested in purchasing, make sure that you do your due diligence, determining the structural condition of the property along with a search of the title deeds of the property.

Should both of these searches (which are entirely voluntary by the way, however, it is strongly recommended in the most emphatic terms possible) turn up no adverse results, you will then need to initiate contact with the seller and provide them with an offer.

Once you and the seller have finally reached a consensus as to the purchase price, the next step will involve the purchase and sales agreements being verified and signed by a qualified property attorney. The attorney will probably require that you provide a bank statement, proof that you have the necessary amount of funds, along with photographic identification such as passport, drivers license etc. This both confirms that you do indeed have the requisite amount of funds and that you are actually legally competent and entitled to conclude the transaction in question.

In the interests of both safety and convenience, you may want to convert either all or part of the funds required for the final settlement of the transaction into cashier checks. The benefit of cashier checks is that unlike money, they can only ever be used by the recipient and so this means that if they are stolen, they can be easily traced and the thief apprehended.
Once the settlement has been duly concluded to the satisfaction of both parties to the transaction, the deeds will be transferred as appropriate. Your real estate attorney will be better able to explain the precise mechanics involved in this specific part of the process.

And there you have it! The property is now legally yours, for you to use as you see fit.

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As Benjamin Franklin once very aptly noted:
“There is nothing certain in this life, save for death and taxes.”

Given the significant downturn that the US economy has taken in recent times as a result of the global recession and credit crunch, this has meant that unemployment levels have shot up, and more and more people are either bankrupt, facing bankruptcy or are out of work. In addition, the average credit rating has diminished which means that people find it harder than ever before to secure financial support from commercial lenders.

Because of their lack of money, both in terms of personal savings alongside their eligibility for loans, this means that the number of people who are able and willing to purchase property is at an all-time low. Indeed, many people are now having to cannibalize their pensions and saving accounts in an attempt to stem the ever increasing tide of debt that looms over them menacingly and threatens to engulf them entirely.

In these financial turbulent times, it is every man for himself and so the average purchaser is not going to lose much sleep over the idea that they let down a seller who they were going to purchase a home from.

Therefore, it is imperative that if you are selling your property that you keep your options open and are prepared to relist your property in the event that the transaction should fall through. Gazumping, as unpleasant and frustrating an act as it is, can never be truly contained or controlled, and when the economy is in distress, the temptation to perform gazumping rises in turn.

However, so far we have considered the worst case scenario for a seller, i.e. where they have a property for sale but they are unable to conclude and finalize the deal because the purchaser withdraws from the transaction due to financial constraints. The seller may actually receive an offer from a more qualified buyer, i.e. someone who is able to meet the full balance of the asking price in cash and immediately as opposed to an undecided purchaser who is trying to secure a loan from a bank.

By leaving the property listed on the open market, the seller will not only protect themselves from disappointment (not to mention loss) in the event that the current purchaser should withdraw, they can also potentially make more money. For example, a seller may have a property that is in a prime location with plenty of access to educational facilities which renders the property especially desirable to a couple who either have children or who are trying to conceive. Such a purchaser maybe more willing to pay above market value of the property in order to secure the property of their dreams, and this in turn means greater security, more money, not to mention peace of mind for the seller.

Never take anything for granted, especially when it comes to something as potentially lucrative as real estate.

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