Tuesday, April 30, 2013

3 Top Real Estate Profit Building Tips

Do you know what separates a good Real Estate investment from a bad one ?

Do you know how to maximize your future profit potential ?

Discover these three methods to increase your overall wealth !

Profit Building Tip #1

There is one thing you can never change about a Real Estate investment. Location. No matter how hard you try to fix up a property, if you buy in the wrong location, you will lose.

Whether you are buying a property for revenue or for your own use, always consider the location first. There are reasons that properties in poor locations sell for much less. Because nobody wants them. Nobody wants to live in an area with high crime or high industrial pollution etc.

Start your property search by determining what areas are best for reselling later on. You always want to have an exit plan before you invest in anything, even Real Estate. If you can't get out, you could be stuck with a real mess.

Profit Building Tip #2

Once you choose the area or areas you want to invest in, you can now start looking at individual properties. For maximum investment growth potential always pick the worst house on the block so to speak.

Look for properties that have been neglected by the previous owner. Never buy a newly renovated property. If you do, you will be giving your profits to the previous owner instead of making them yourself.

Fewer Real Estate purchasers will want to buy a fixer upper, especially if they are planning to live there themselves. For this reason, you should be able to get a better price and may even be able to get the property for substantially below the asking price. Never be afraid to low ball your offering price. You can always increase you bid later if the vendor doesn't bite.

Profit Building Tip #3

Once you have purchased your undervalued property in a good area it is time to add value to your investment. Renovate your ugly home and turn it into the best house on the block. Look for ways to add to it's curb appeal and to make it more comfortable to a new owner. Update electrical, plumbing and heating/cooling if necessary.

Be careful with your renovation plans though. Do not over renovate your property to the point you will no longer be able to increase it's resale price. Given your chosen location, there will always be a maximum price that new purchasers will be willing to pay.

The key here is to bring your property up to the level where it will be one of the more desirable properties on the block without spending more on renovations than you need to. Many investors overdo it in this area which reduces their overall profit on resale.

What To Do

Whether you are looking at buying a piece of Real Estate for revenue producing or for your own use, the above three tips will help you to make maximum profits on your property once it comes time to resell.

You should still be careful though about when you buy into a given market ( as mentioned in one of my previous posts) . If you buy at the wrong time at the top of  a market cycle, you could still end up losing even by following these tips. Be careful and be well informed before you buy.

To recap, when the time is right, find a good location, find a fixer upper and renovate. This process can be repeated many times in many locations.

As always, I welcome your comments and suggestions for future topics.


Tuesday, April 23, 2013

How To Get Rich - Search For Good Investments

Do you know a good investment when you see it ?

Can you tell if what the promoter is saying is actually true ?

If you answered no then you had better read on !


The Good The Bad And The Ugly


All investments basically fall into one of the above categories. Good investments are ones that have a proven track record of increasing income and growth for their investors. Ideally, they pay out income either monthly or quarterly. They are also very easy to buy and sell if your plans should change or the investment starts to struggle. I call it the easy in and easy out principle, others call it liquid.

Bad investments are ones that have not yet proven their value to the investor. They generally do not pay out a regular income and the value of their shares fluctuate wildly for a multitude of reasons. They are sometimes promoted heavily by brokers and others in the industry. They are quite often new companies with new products that are promoted to revolutionize the world. They play on investors emotions and lead you to believe there are big profits ahead.

The truly ugly investments are ones that have all the qualities of the bad ones above in addition to a few more restrictions for the investor. They are generally very easy to invest in but almost impossible to get out of in a hurry. The most common of these types are Real Estate Limited Partnerships. Many generally have no history of making any money at all and to sell your shares you have to find someone else yourself who is willing to buy. A very difficult if not impossible task if it is truly a bad investment. They are promoted heavily and show wonderful projections of profit, but they are just that, projections.


Separate and Filter 


Before investing your hard earned money, you must determine which category your investment options fit in to. Needless to say you will want to invest solely in the good investments and stay far away from the others.

Ugly investments are relatively easy to spot by using the easy in and easy out principle. Always know how to get out of something before you look at getting in. Simple but often overlooked in the excitement of the hype.

Investments that fit into the bad category can sometimes turn into good investments. However, it is very difficult to know which ones someday will. If you are able to pick these right, big money can be made. With the bigger potential gain also comes higher risk of your invested capital. Not generally the ones to use for your core investments.


Learn Before You Yearn


By following the above guidelines you will eliminate most potential investments from your search. You will then be able to learn all that you can about the ones that are left. From these remaining good ones you will be able to research which ones will be best suited for your future wealth building efforts.

Remember, your goal in investing is to make money, not lose money. A losing investment early in your investing career can seriously erode or even destroy your confidence and your motivation to become wealthy could be seriously damaged.

Start with the good and learn all you can before you yearn for a better life.

As always, I welcome you comments and suggestions for future topics.

Tuesday, April 16, 2013

How To Get Rich - Build Your Financial Shield

What would you do if you lost your job ?

What would you do if you had a sudden major expense ?

Sad to say, but most are never prepared for a major financial setback !

The Big One Is Coming

There will most likely be at least one major financial setback in your life. For some, there may be many. But how do you know when they are coming ?  The simple honest answer is you don't !

The very first step in protecting for the big one is to realize that it will happen. You cannot realistically expect to go through life thinking everything will go your way. Instead expect the unexpected to happen as it most likely will. Now how do you go about preparing for this inevitable event ?

Choose Your Shield Strength
  
First you must decide how strong a shield you need. In other words, how much money you should set side to  be used for emergencies only. My suggestion is to set aside enough money to pay all of your living expenses for a period of three to six months. Your actual amount will vary depending on your level of living expenses and the relative security of your main income source.

Some jobs are much more prone to layoffs than others. For example a construction worker and a medical professional will have far different levels of expectation of layoffs etc. You must decide how likely it is for you to be laid off and for how long.

In any event, be prepared for having absolutely no income for at least three months. This should give you enough time to make plans for your future.

What To Do

Once you decide your amount, start putting a little bit aside towards this amount every pay period. As suggested in other posts, plan to set aside at least ten percent of your net income. This ten percent will first be used to build your financial shield. Once your shield is up to full strength, you can then start using the ten percent towards building additional sources of income.

Your shield should be stored in a safe place. In other words, don't keep your shield in your everyday savings account that you  have full access to. Instead, open a separate savings account at a different bank and place your shield there. Also, make sure that it is difficult to access. No bank card access to this account. This will make it less tempting for dipping into for everyday expenses or special wants.

Maintain Your Shield Strength

Once your shield is built and fully charged there is normally nothing more you need to do until you need it. When your inevitable emergency expense comes along, use part of your shield as needed. As soon as you are able, start recharging your shield to prepare for the next big one.

That is all there is to it. A pretty simple plan but a very powerful protection for your future financial wealth creation. Without this shield in place you may never be able to withstand the financial storms ahead which will surely slow down or completely stop your wealth building and realization of your dreams.

As always, I welcome your comments and suggestions for future topics.


Tuesday, April 9, 2013

How To Get Rich - Follow A Good Leader

Do you think you need to learn everything before you become rich ?

Do you think others have gone it alone ?

Following a good leader can be much faster and easier !

Why Reinvent The Wheel

As a society, we grow because we learn what others have already done and start our personal growth from there. We do not go back in history and learn every little thing there is to know in order to achieve our goals.

Many inventions are merely a new way to do something that has already been done. A simple improvement or modification that no one else had ever thought of before.

The very same rules can be applied to building your wealth. You do not need to learn every little aspect of wealth building before you can begin. Why reinvent the wheel so to speak. Instead, climb on the shoulders of someone successful and simply do what they do.

The biggest problem here though, is how do you know who is really successful and who is merely trying to sell you a product ?

How To Find Your Leader

The first step is to filter out all the garbage. The truth is there are a lot of people , especially on the internet, that are trying to make money who are not wealthy themselves. Anybody can post pictures of fancy cars and real estate. It doesn't mean that they are the owners.

The next step is to make a list of the ones you want to check out. Yes, check them out. Never get involved with a scheme that comes to you. Always be the proactive one and start the process yourself.

With your short list so to speak, check out their history and get a feel for how the general industry perceives the individual. Are they honest, are they actually as successful as they let on, etc. Also, check for real testimonials that can be verified. Many pay actors to do testimonials that have no clue about what they are promoting. Sad, but unfortunately true.

Be Patient

Never be in a hurry to find someone to follow. If you rush the process, you will make mistakes. These mistakes could some day become very costly, both in time and money.

A truly good leader will give away much for free or for very little. After all, your leader will already be wealthy and has no need to make a living off of you. The goal of a truly good leader is not to make piles of cash off of his or her followers. It is more to provide a service to those who need the help.

What To Do

The fact that you are reading this is a step in the right direction. Learn all that you can on your own and be proactive about finding your right leader. Do not believe everything you read or see without verifying it yourself. Be careful of the fake testimonials of the dishonest promoters. Do your own research to find the proper leader for you.

In the meantime, you are welcome to read all of the previous and future posting on this site without any cost or obligation. Learn all you can before choosing your leader.

As always, I welcome your comments and suggestions for future topics.

Tuesday, April 2, 2013

How To Get Rich - Learn the Real Estate Mayhem

Do you know someone who is living in their dream home ?

Do you think they may be wealthier than anyone else ?

Chances are if you do, they are not as wealthy as you may think !

Choosing Your Castle

An old saying once said that a man's home is his castle. As outdated as this saying may seem today, many are making a very good living on this very thought. All you have to do is turn on the Home and Garden channel on tv. Many, many home renovation and home purchasing reality shows. What a gold mine, for the producers that is.

The problem for the individuals watching these shows is it makes them less content in their current situation today. Why does one need the latest and greatest renovation ? Why does one need a huge, luxurious home ?
Correct answer is they don't !

My recommendation is to tune out these shows and be happy with what you have today. If having a more luxurious lifestyle is one of your dreams, start making plans to increase your income in order to afford one. Do not go into uncomfortable debt when choosing your home. If you do, you may become a prisoner of your own creation.

Defining House Poor  

House Poor is a term that is used for someone that works just to pay their house operating costs. Their taxes, their mortgage, their utilities, etc. etc. There are many individuals in developed societies that live this way today, but why ? I'm not really sure but my best guess is that they cannot wait to achieve their dreams, they want them now !

With today's continuing record low interest rates, the problem is increasing. I cannot imagine their life once interest rates rise and they cannot make enough to pay their home costs. Wow, what a thought !

Create Wealth Not Obligations

Pouring all of your income into a home that you hope will someday rise in value is a recipe for disaster. There are so many factors that control Real Estate markets, no one really knows what the future will bring. Many Real Estate agents and other Gurus lead you believe they know, but they don't. No one can see into the future.

Instead, live in a modest home that you can afford comfortably today and put your savings towards building assets that put money in your pocket. Your home does not put money in your pocket, it takes money out of your pocket. A fact that many don't realize until it is too late.

Creating real wealth means you will never become house poor. You will be investing in order to increase your income level and thus making your life much more comfortable. The percentage of your income needed to pay your living costs will become less and less over time.

Tune out the Real Estate Mayhem and understand it for what it is. A Business that makes money for the producers and sponsors. Nothing more. Do you think they care if you go bankrupt ? If you do then you have really fallen for their scam.

As always, I welcome your comments and suggestions for future topics.