real estate investing

How to Minimize Risk And Increase Profits in Real Estate Investing

December 2, 2019 by Team RE Mentor Leave a Comment

Every real estate investor who wants to make money works under the same imperatives:

The need to minimize the risks he is taking in terms of his own exposure.
A certain amount of pressure to find ways to increase his profits.

Because working in real estate is all about being creative with the one resource you cannot get back:

your time
the amount of effort you put into each real estate purchase you make has to be closely linked to your expectations of making a profit from it
or setting up a parallel income stream.

This is where the strategic vision that guides you comes in. Either you decide early on that you are going to focus on single-family dwellings, for instance, or go for multi-family dwellings.

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The distinction here is an important one, hence the need for a ‘strategic vision’ in your planning.

Without that the decisions you are making are purely opportunistic ones and, as a result, you end up with the market running you instead of you running the market.

This is not to say that you preclude the one from the other.

Quite the contrary, the real estate investment market thrives on opportunities and when you find one passing it up because you are blindly following a by-the-book strategy makes about as much sense as leaping off a cliff because it’s fashionable to do so.

What a strategic vision does, however, allows you to decide when and why you should deviate from your chosen goal and it also enables you to assess what you can expect to gain by deviating from your game plan. In my career, for example, I have bought and sold single-family dwellings because I needed to make fast money for a bigger investment in multi-family dwellings.

While my focus and the thrust of my personal strategy have always been on the latter I have always known when to deviate and get involved in the former so that I can create more opportunities for myself.

It is exactly this approach that enables a focused real estate investor to make gains in everything he does every single working day.

How to formulate a working strategic vision, how to choose what’s right for you and how to stick to it is something I cover extensively in courses I give and in the boot camp weekends I run.

The thing is that without that strategic vision to guide you, you are left almost rudderless being blown about by the market conditions and unable to do much to actually affect your own destiny and that, is simply no way to run anything much less a lucrative real estate investment career.

Top 10 Features Of A Profitable Rental Property

November 14, 2019 by Team RE Mentor 1 Comment

Neighborhood: The quality of the neighborhood in which you buy will influence the types of tenants you get & vacancy rates.
Property Taxes: Property taxes are not uniform across an area and, as an investor planning to make money from rent, you want to be aware of how much you will be losing to them.
Schools: If you're dealing with family-sized accommodations, you need a consider the quality of local schools.
Crime: No one wants to live next door to the real-life Breaking Bad.
Job Market: Locations with growing employment opportunities tend to attract more people – meaning more tenants.
Amenities: Check the potential neighborhood for perks that attract renters.
Future Development: Will you be competing with future apartments? Or will the neighborhood lose or gain amenities with future developments?
Number of Listings and Vacancies: Too many vacancies in one area? That’s like neighborhood wentthe bad.
Rents: Rental income will be the bread-and-butter of your rental property, so you need to know what the average rent in the area is.
Natural Disasters: Insurance is a necessary evil, so how much do you need? Is your property in the flood zone, snow zone, or Apocalypse cone? (jk on that last one, don’t ask.)

Learn more or start your real estate investing journey today

Are Apartments Really Commercial Properties?

November 6, 2019 by Team RE Mentor Leave a Comment

If you ask any banker, he’ll tell you that anything over 4 units is considered a commercial property. If you ask any municipality regarding their trash pick up, you’ll get the same answer, ditto with insurance companies but are apartments really commercial properties?

When you think of commercial property, do you think of tall skyscrapers, office buildings, and warehouses…and possible large apartment complexes?

Well, apartments over 4 units are commercial properties but there is one big difference between apartments and offices. One space is occupied by residents and the other spaces are occupied by businesses.

That’s a big difference! Did you know the 3 out of 4 businesses go out of business after the first year? Ninety percent are out of business by year five! If you're renting to businesses, chances are, your turnover rate is going to be higher than a residential property and you should know that tenant turnover is your biggest expense in any multi-unit property.

People always need a roof over their heads If they move out of your place, they are moving into someone else’s (if you treat them with respect, they will stay longer!) Businesses just disappear and when they break the lease, it’s hard to get money out of a bankrupt company!

A lot of commercial properties rely on 3 or 4 big tenants. If they lose a tenant, they’ve lost 25% of the income. If the property cost you $1,000,000 and you lose 25% of your occupancy, you could be at a breakeven point or worse…upside down.

Statistics show that it takes an average of six months to fill commercial space. The main reason is that the pool of potential renters is not that big. In contrast, with a residential property, there is a vast pool of potential renters and the turnaround is one or two months instead of six.

For the same million dollars, you could get a 20 – 60 unit property (depending on where you invest), if you had 20 units and lost one, you’ve only lost 1/20th of your rent, you still have plenty of cash flow and more importantly, plenty of spendable income.

There is one other thing you should consider, when you’re attracting a commercial tenant for your property, you usually agree to do a “build-out” which means you change the space to make it conform to the business. This could cost you thousands of dollars.

With an apartment unit, the “make ready” usually consist of paint and carpet. If more is needed, it’s usually paid for from the previous tenants security deposit.

Yes, apartments over four units are considered commercial properties but as you can see, they are in a class by themselves when you compare risk versus reward.

3 Ways To Increase Income Without Raising The Rent

September 26, 2019 by Team RE Mentor 91 Comments

3 ways to increase income without raising rent

Charge "Cuddles" rent, By that I mean … PET RENT

Almost 70% of all households in the U.S. own pets. Charge Fido a small fee and you won't be isolating a large population that could become your tenants, and also the same tenants would love to pay for a convenience upgrade like a pet-sitting or dog walking feature.

Extra Space

Here's a win-win. Set up storage units on the property that a tenant can rent at-will. That way they are not violating their lease and any fire codes by over-stuffing their unit with their keepsakes, toy collections, or seven extra coaches they found on Amazon, or whatever they click-bought yesterday.

Offer Upgrades

Make life a little easier? Sold. Occupied. Laundry services, dry-cleaning, UPS Dropbox, Netflix subscriptions, free WiFi… Pick one or invent your own. Small conveniences go a long way to make a tenant's life even smoother.

Need more ways to increase income? Check this out.

Syndication Is The Secret To Making Big Money In Real Estate

September 18, 2019 by Team RE Mentor Leave a Comment

Are you interested in syndication?

First let’s focus on something important: every investment entails some risk and successful investors are great at minimizing the risk not just for themselves but also for everyone else involved with them.

This means that as a real estate investor you must be quick at putting together deals using syndicates.

Syndication Is The Secret To Making Big Money In Real Estaterementor.com

Essentially, a syndicate is a group of investors representing an interest in breaking into the real estate investment market who put up a certain amount of cash and get fronted by a professional.

If you are clever about it…

And have begun to establish your credentials, built up a reputation and can talk the talk in a way that convinces people to trust you with their money you are then off to a flying start.

It means that you will bring credentials, the ability to close profitable deals and expert negotiating skills to the table.

For the investors who form the syndicate the benefits are twofold:

First they gain a foothold into the competitive real estate investment market without having to put up a whole lot of money to begin with and this means reduced exposure for them and fewer risks for their money.
Second they gain someone who will do all the legwork and close the deals and work for their profit. All they have to do is sit back and enjoy it.

Provided you are diligent in your work, capable of paying attention to every detail and good at working under pressure and, hopefully, working at more than one deal at a time then your earning potential should only be limited by your ability to put deals together.

Creating syndicates and using other people’s money to invest in real estate without risking your own allows you to create win-win scenarios which benefit everyone and that is the best way to build a career, a reputation and a personal fortune.

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Have you ever wondered how top investors get money to fund their deals? We can show you exactly how and reveal the top techniques of using other people's money to fund your deals.

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Recession Without A Plan Is A Fast Way To Go Broke

August 21, 2019 by Team RE Mentor Leave a Comment

The fastest way to get from point “A” to point “B” is to have a plan. The fastest way to earn one million dollars or more in real estate investing is to have a plan. The fastest way to go broke…the fastest way to lose a lot of money…the fastest way to be forced out of the investing business is not to plan. Especially during a looming RECESSION … yes, we said it.

If you don’t make a plan now, this new recession will rip you out of your investing interests during 2020.

DON’T SAY RECESSION

Just don’t say “recession” around any economists, politicians, or your creditors. We also hear you shouldn’t say the word “recession” in front of your bathroom mirror 3 times in the dark.

Many successful investors found themselves working very hard in their investing business but not really getting anywhere. Only after they started sitting down once a day to plan their activities did they start making real progress in their investing business.

Nothing substantial in life is completed without some sort of plan. When ships cross the ocean they “chart a course.” What they are doing is planning. Across all of our oceans are buoys, those red, floating devices. If you’ve ever been in a harbor or seen a harbor scene in a movie, you’ve seen a buoy. Some of them have bells attached so you don’t hit them at night.

“A highly leveraged business sector could amplify any economic downturn as companies are forced to lay off workers…” the Federal Reserve chair, Jerome Powell, said in a May speech.

“RED, RIGHT, RETURNING”

Buoys are the ocean’s traffic signals. They are all numbered. And there is a universal ocean law, followed by all captains whenever they return to a harbor. It’s the three R’s: “Red, Right, Returning”. Any captain will tell you when you are returning to a harbor, the Red buoys should be on your Right. This the way you plan your entry.

When you are going from point “A” to point “B” across the ocean, you chart out a series of buoys that you will set your “road map” for your journey. Since they are numbered, you know when you are at the right buoy. A simple journey from Falmouth, MA, to Martha’s Vineyard, though only seven miles, may require that you chart the passing of 15 buoys. It’s like playing connect-the-dots across the ocean. As you go from buoy to buoy, you successfully navigate your journey to your destination.

WITHOUT A RUDDER

Plan your real estate investing with the same philosophy. To get from where you are now to one million dollars, you have to plan to perform certain activities and meet certain milestones (buoys) to connect the dots, to get to your goal.

Without your goal constantly in mind, you will drift aimlessly and unprofitably, like a sailboat without a rudder, until you begin to plan properly.

After you start planning consistently, you will realize that any time your business starts getting chaotic, you’ll pause and realize that you’ve gotten away from your planning.

RIDING OUT THE STORM

One way to weather the storm during this type of chaos is to have multi-family rental properties that are going to provide a steady stream of income during the turbulence of the markets.

The fastest way to get order back into your business is to begin planning again. You did make rental properties part of your plan, right?

BUILDING HABITS INTO A BUSINESS PLAN

If your business or life is chaotic now, start planning. When you begin the planning process, you won’t suddenly wake up tomorrow and start planning every day for the rest of your life. Certainly, if you start shoring up for a recession today, your plan can become actions, and when this ugly beast rears its head — it is already slain.

But alas, we are all human and we begin by planning a little, reaping the rewards, getting away from it, becoming chaotic again, then going back and planning a little more. It’s just human nature.

However, each time you get away from planning and then go back again, you are taking a giant subconscious leap forward to successfully embedding planning into your business and your life.

Great plans take habitual thinking, strategy, and execution. Start your planning habit today. So, you won’t wake up to a financial nightmare. Instead, you can rest easy knowing you have prepared for eventualities.

FYI—We have a FREE videoturial that teaches the critical skill of recognizing when the market phase is changing so you change your investment strategy so you continue to do well investing (this is the number one mistake investors make)