Sherry and Laird describe why they came to the Ultimate Partnering Event and how the event surpasses their expectations. They share what their biggest fear was when it comes to investing in multi-family real estate and how they overcame it. Sherry and Laird tell you why they have a favorite training from RE Mentor and what RE Mentor means to them. They offer advice for anyone who is on the fence about getting started investing in real estate. ____________________________________________
1. Local government funding
A hefty amount of dollars spent by the local government on local development is a sure sign of the revitalization and further development of an area which means that real estate is about to take off in terms of supply and demand.
2. A jump in commercial funding
The relocation of large businesses, the opening up of offices and an influx of new business in an area is also a clear indication that domestic real estate will take off as all those workers, office personnel and managers will need somewhere to live.
3. Expansion of local transportation
An upgrade of the local transport grid, local transport network and or building of new access routes is an indication of the revitalization of an area.
4. A rise in the local population
An influx of new visitors, a rise in the number of 'out of towners' and a jump in the people who normally live in an area is a sign that the particular market is about to become a real estate hot spot.
5. A rise in investment projects
Any jump in investment projects or any large-scale investment in an area, even if it has nothing to do with real estate is one of the signals that the area is about to become a hotbed of real estate activity and you had better get in there fast.
Want to learn more about real estate markets? Go here.
The moment any one utters the dreaded ‘R’ word the real estate industry seems to shake, rattle and collapse. Mortgages, borrowing, house selling and buying and house building, all slow down. Especially during a Recession. But not emerging real estate markets.
Yet, housing never really stops being in demand. People always want somewhere to live. Real estate investors who have seen the market go through its ups and downs know what to do. When the economy temporarily stalls what is required is an emerging real estate market to allow them to make money on the same scale as when boom times are there.
This is how it works:
Emerging real estate markets are created out of a real need. Which is then coupled to generous local incentives necessary for the development of a region. As such it is totally recession proof. Perfect for the savvy real estate investor who has managed to spot it first.
The reason an emerging market is recession proof is because it is driven by its own micro-economic realities. Independent of the larger economic picture. A new industry moving to town creates an influx of new jobs. It attracts new people and brings with it its own people and all these generate a buzz.
In response, the local government provides incentives to help them with their relocation. They do this to ease the expected pressure on housing.
This attracts new supporting business to the area. Helps other start ups get going and attracts even more people and suddenly you have a boom-town in your hands.
The pressure-cooker conditions this creates are perfect for closing deals fast in emerging real estate markets…
… and making good money from them. The skill of course lies in being able to correctly identify an emerging real estate market as it emerges rather than chase the far more risky tail end of it.
Here’s the truth:
An emerging real estate market always Peters out* and begins to normalize and reflect the rest of the economy. This means that the window of opportunity is small indeed and the real estate investor worth his salt knows when to get in and when to get out.
One of the things we cover in the courses we give is how to recognize an emerging real estate market and what processes you need to have put in place in order to be alerted about it and identify it correctly.
The thing you need to be aware of is that emerging real estate markets are like gold mines. You need to find them, work them and then move on, all the richer for the experience and with your bank balance better off.
*The earliest known use of peter as a verb meaning dwindle relates to the mining industry in the USA in the mid 19th century, and it is reasonable to accept that that is where it originated. Thoughts of US mining at that date bring to mind images of the California Gold Rush, which is sometimes suggested as the source of this phrase.
Mini-perm financing is short-term financing typically used to pay off income-producing construction. Or commercial or multi-family properties, usually payable in three to five years. In this case, "perm" is short for "permanent", alluding to permanent financing.
Commercial properties often cannot qualify for long-term, permanent financing until they've established operating histories.
Mini-perm loans, therefore, are used to pay off the construction loans. And bridge the gap until the property can qualify for permanent financing.
During the last year it seemed as though mini-perm financing has tended to be more prevalent in some parts of the United States.
Generally, mini-perm loan financing is used to pay off construction or commercial property loans. Either at the beginning of a particular project or investment. Once a project is producing income, the borrower can begin to look for a more long-term financing solution.
The loan carries a balloon payment at the end of the term. With the anticipation that the loan can then be easily refinanced due to the fact that the property now has an operating history on which to successfully obtain permanent financing.
Listen to Eric Stewart from Atlantic Capital Group describe bridge loans to mini-perms as featured on Real Insights Podcast
There are two types of mini-perm financing available, namely:
- hard mini-perm; and
- soft mini perm.
A hard mini perm is a project finance structure where legal maturity is set typically around 7 years. Forcing the borrower to refinance before maturity or face default.
A soft mini-perm is a structure without this default risk. Where the loan maturity remains long-term but whereby increasing incentives are in place to encourage the borrower to refinance.
Advantages of the hard mini-perm include the obligation on the borrower to refinance. Refinancing would be at prevailing market rates, and the fact that funders will be able to price on a short-term basis which also allows the repayment of their upfront fees over a shorter period.
The main disadvantage is of course the introduction of default risk potential for all parties (funders, borrower and Government).
Upon default, the funders may lose control to an administrator and have to allocate more capital to the project. In contrast, a soft mini perm sets out the contractual remedies available to funders and no additional capital is required. Unsurprisingly, the soft mini-perm is the structure more favored by the market generally.
Long-term funding is still available in the banking market.
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If you want to be successful in any endeavor, follow the lead of the Mayans. Learn the
laws of success in your “field” whether it’s a cornfield, or the outfield. Then follow
them diligently. Don’t just sit back and wish for success. That’s like waiting to win the
lottery. Enter it if you want to, but never count on it. That’s the chance world
approach. If you live with unearned wealth as you goal in life, you’ll end up with only
dreams in the bank.
How much corn do you think the Mayans would have grown each year if they had
depended on luck to give them a crop? Probably not much, and in those days, the
price of failure was your head, literally. Napoleon said luck was the ability to exploit
accidents. Very few people become successful accidentally. Try to think of one you
know right now. Can’t, huh? That should be no surprise.
You must understand that every success is governed by a set of recognized success
principles, not by chance or luck or the stars that were shining when you were born.
Master the laws that apply to the area you want to succeed in, and you never have to
depend on luck.
Failure Has Laws, Too
Even in failure people are totally predictable. The laws of failure are just as immutable
as the laws of success, and unfortunately, just as powerful. If your goal is failure, you
can discover the laws and follow them to reach that objective. It’s far more likely,
though, that you’re living those laws by default because it’s easier than working
Success is a science and an art. Everybody has to develop their own style of attaining
it. You can’t buy it, you can’t inherit it and you can’t steal it. It knows no divine right.
Success is “non transferable.” It can only be acquired by the personal mastery of its
rules by each person individually. And most important of all, it can never be acquired
by wishing and hoping. Wishing and hoping are the currency of fools, and the first
laws of failure.
Success Is Predictable Through Education
Human nature is very complex, but in many ways very predictable. People who let
chance pervade their lives can never make predictions about the most important thing
in their lives—their own future. They just go along and hope for the best, and often
their best is another failure in a long line of failures. Life does not have to be that
People go to school for years to study medicine so they can be healthy, both physically
and mentally. They study science to find out what makes the world work. They study
history to learn from the mistakes of the past. And some study religion to gain
spiritual health. Is it so difficult, then, to understand that studying success is just like
studying anything else? Having a faculty of coaches who are experts in different niches of real estate is a significant competitive advantage to growing your business.
But people get in a rut. It’s easy to do. There are lots of places where ruts block the
road to success. And if you’re not careful, that rut in front of you can turn into a grave
with openings at each end. Education is the key to avoiding those ruts. With
education, you can learn to be predictable with them. By being predictable with
predictable laws, you will always achieve predictable results. It’s really quite simple.
Think about a brand new compass for a moment. All compasses start with no
predictability. Their needles point in any direction until they are magnetized. When
they’re magnetized they point only to the north. That’s one of those natural laws
we’ve talked about.
Another magnet, or a piece of metal may affect a compass for a few seconds, but the
magnetized needle always returns to face north. People can become magnetized in a
similar way—magnetized by the purpose that they have chosen in life. To be
predictable, you must magnetize your conscience, your brain, and your muscles so
that they constantly revert to the direction of success, no matter the distractions.
When you focus yourself this way and fully support your focus with physical and
spiritual powers, nothing on Earth can stop you from becoming successful.
Just imagine what can happen when your life is magnetized by a firm conviction in
what you’re doing. Think how a strong conviction about your goals enhances the
functions of your mind and stimulates all of the other functions of your body. When
you really dedicate your life to its mission, distractions lose their power. Nothing and
no one will have the power to distract you from the north your compass is set on.
But what about those people who have no magnetism? Every little problem causes
their compass needle to spin. Their success, if they have any, is determined by
whoever talked to them in the last five minutes, by whatever they had for breakfast,
or by whichever program they watched on television last night.
Learn The Laws
The power of the laws of success will be lost in your life if you don’t learn which laws
will work for you and then use them accordingly. The golden rule, “do unto others
what you would have them do unto you,” is meaningless if you don’t use it as a
foundation of the laws of success. Your compass will lead you nowhere if you don’t
have the proper direction to begin with.
You must learn all the laws of success—and they are all here in this material. But you
also need to learn the governing laws. If you don’t know that water freezes at 32
degrees, you’re likely to have pipes bursting under your house this winter. Likewise,
even though we keep all the other laws of the universe, we may bring serious
consequences upon ourselves if we do not seek to understand the laws of our own
The most basic of these laws, applicable both in personal development and in business
success, is the law of the harvest. It says that, “as you soweth so also shall you
reap.” All the other laws rest on this single premise. If you keep all the laws of
success and then sow greed, hatred, envy, and dishonestly, you will reap nothing but
the same. It’s as predictable as gravity: If you jump off that chair, you hit the floor;
if you sow misery, you reap misery.
Learn to Sow Success
The law of the harvest is a lot more than that to a person who seeks success. In
essence, the law says, “If you sow success, you shall reap success.” Now that sounds
silly, doesn’t it? If you already have success to sow, you don’t need to sow something
to reap it. If you had your first million dollars already, you wouldn’t need to do
anything to earn it.
Luckily, we can sow success without actually having it first. You see, when you sow
corn, you don’t sow whole ears, you just sow the seeds. And where do you get the
seeds? From somebody who has already had a successful crop, that’s where.
Success seeds work just like corn, and you’ve got a whole batch of good seeds right in front of you. Sow them to reap your success. That’s your first law of success.
Every law of success is a seed that will sprout until you have a whole field full of it.
Then you can reap your harvest and continue the process, because now—guess what?
You’ve got your own seeds, and you can help others plant their crops, and replant
your own for another yield.
When you’ve helped others to succeed in their lives and
their ambitions, that is when you know you have truly succeeded in your life. Nothing
is more satisfying than that feeling of success.
There is no finer vindication of your
efforts than someone else succeeding with your help using your seeds of success, and
that is what we strive for at RE Mentor.
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Listen to real insights for real estate investors from real estate professionals on this week’s Real Insight’s Podcast
Business systems are the way you do things. They are the procedures that can be replicated.
For example, we recently created a telephone answering system for an office receptionist. We created a script that delineated how she is to answer the phone and what information she needs to collect. She has responses for the types of questions callers may have and to whom she should direct calls.
We were very specific about the circumstances for transferring telephone calls and circumstances for taking messages. In addition, we established the procedure for inputting the information in the business’s customer relationship management (CRM) database program.
Effective business systems can be created for all kinds of work performance that occur in your organization. As you formalize your systems, the time you spend focusing on the details of a job become invaluable; as you critically examine each step of a process, you are also determining whether certain areas need improvement. This is a key component of the process because business systems need to be reviewed and improved as the ways of doing business change.
Here are five other reasons that effective business systems provide value:
1. Systems provide consistency
With business systems, you can produce the same products and services with the same level of consistency. Once you have created your systems and written down the sequential steps, your employees can follow the proper procedures consistently. You can monitor these processes and improve when necessary.
Systems can be implemented for sales, marketing operations, employee training, etc. The people who benefit the most from having systems in place are your customers who know what to expect from your business.
2. Change is easier to accomplish
Systems make a business predictable. So when change impacts your business–which may often occur–then knowing what business systems need to be modified becomes easier. You will know the current work process and can predict how change should be handled while still maintaining your systems.
Once your systems become part of a flow chart, or are written as a set of sequential tasks and procedures to follow, they become easier to monitor. You’ll notice that tasks will be completed properly and efficiently; changes can be more quickly addressed.
3. Training new employees becomes easier
New hires can be quickly integrated into your business when there is a written set of procedures for them to follow and they know exactly what is expected from them. It becomes easier to gauge the effectiveness of an employee when you have a measurable set of guidelines to review.
4. Business systems allow staff to focus on what they do best
Any time you are trying to complete a project with a specific deadline, you will want to avoid any problems that may develop. We like to create business systems that also best match the employee talent that is available. Allowing people with specific skills, knowledge, and abilities to be responsible for those parts of the business allows for better quality of work; everyone then can focus on what they do best.
Once business systems are established and implemented, activities can be performed on “autopilot.” Repetitive activities in your business become routine, and you can focus on activities with higher payoffs.
5. Business systems create value
Effective business systems become a part of your company’s organizational infrastructure. If you are selling your business, formal procedures add value. Buyer can see that operations run smoothly and consistently; new hires can be quickly integrated.
Systems are what make businesses grow, flow, endure, and sell. This makes a business purchase more enticing and more valuable because the systems become tangible assets. Businesses that effectively follow systems find themselves winning against their competition.
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