Introducing MustKnowInvesting’s first contributor, Wil Christenson!

(Check out the Become a Contributor page for more information)

Dusty and I have known Wil both personally and professionally going on 5 years, and he never ceases to amaze us. Wil started investing back in 2003 without cash, credit or connections. His first investment was a small package deal that he ended up renovating and making over $150K in profit (not a bad intro into real estate investing). He is a hands on kind of guy and has done many of his own rehabs himself.

His expertise lies in evaluating, planning and managing renovations for maximum resale, appeal, and profit.

I had a chance to sit down with Wil recently and ask him a few questions.

Patrick: How did you first get interested in real estate investing?

Wil: I was really more interested in passive cash flow than any one particular industry. I had experimented on the internet a little and built a couple websites. I also had a completely different business idea that required a large chunk of capital. I was searching for every way possible to put together the funds necessary to get started.

As fate would have it, I was watching late night TV the next week (something I almost never do) when an infomercial came on touting a course for real estate investing. I thought it looked like a good way to generate a passive income and large amounts of cash. I ordered the program, devoured it as soon as it arrived, and immediately took action.

I found my first two properties within a month of finishing the course. These were low-income properties both of which needed extensive renovations. As a side note, I do NOT recommend beginning investors starting this way. After the renovations, these properties were producing over $1000 per month cash flow. I sold them two years later for $150,000 in profit.

Patrick: What would you attribute your successes to most?

Wil: I attribute my successes to three things. The first two happened pretty much simultaneously. The third one came along afterward but has contributed as much or more to my ongoing success.

First, I found people who had already succeeded and did exactly what they told me to do. Starting with the first real estate course I bought off that late night infomercial and continuing to other gurus, seminars and local investors who were gracious enough to help and advise.

Second, I took action in spite of my fears. There is a well-known book by Susan Jeffers, “Feel the Fear and Do It Anyway.” That’s exactly what I did. To get my real estate investing career jump started, I talked to every seller I could find. I called sellers from classified ads, I drove neighborhoods and knocked on doors, and talked to the owners of every run down house in sight. Was I scared? You bet. But it got easier with every conversation.

Third was my commitment to personal development. This grew out of the relationships I had formed with a unique group of investors in my local area and a dedication to learning whatever was necessary to achieve my goals.

Patrick: Where do you see the biggest opportunities in today’s market?

Wil: With the change in buyer confidence and the changing environment of the mortgage industry, sellers are having a harder time finding qualified buyers. This has lead to some of the best buying conditions in years. Therefore, I recommend buying and holding as many properties as you can get right now.

As always, don’t over extend yourself, minimize your risks, and use other people’s money as much as possible to leverage the number of properties you can buy. I have to qualify the last part of that last statement; there are many ways to use other people’s money, some more risky than others, so know what you’re doing whenever you leverage yourself.

Patrick: What is the biggest mistake that you’ve ever made as an investor?

Wil: Relying too much on someone else’s information instead of doing my own research. This is dangerous, and, coupled with speculation, it is deadly. A mistake here could take you out of the real estate game permanently. Always know your market and your exit strategy.

Patrick: What one piece of advice would you give to beginning real estate investors who want to get started but haven’t taken that first step?

Wil: Find someone who is a successful real estate investor that is willing to give you a plan. Then get the plan and follow that plan precisely.

Everyone, please be sure to give Wil a very warm and sincere MustKnowInvesting welcome!

Popularity: 28% [?]

You heard me right…that’s your hard earned tax dollars at work. Here’s a clip from Bloomberg:

“Bank of America Corp.’s $3 billion takeover of Countrywide Financial Corp. will be financed by 138 million tax-paying Americans.

Bank of America, led by Chief Executive Officer Kenneth Lewis, can use tax write-offs to pay for Countrywide, the country’s biggest mortgage lender, said Robert Willins, a former managing director at Lehman Brothers Holdings Inc. who now runs his own accounting firm. Taxpayers may pick up about $5 billion of Countrywide’s losses over 20 years, he said. Countrywide shareholders approved the sale today.”

Check out the full article, “Bank of America’s Countrywide Tab Signed by Taxpayers.”

Popularity: 29% [?]

My first year investing, one of the “Big Unknowns” for any deal that we were working on was financing. We were doing our best to just get a good deal under contract let alone even think about what we were going to do once we contracted one. That was the first big hurdle.

But, then the inevitable happened…we got a great deal! We did exactly what all the books and courses teach you. We were so excited running around high fiving each other and decided that it deserved a night out on the town. The next day after a particularly long night, I remember waking up and thinking, now what do we do?

Long story short, we ended up getting the deal financed because one of my partners went door to door to real estate agencies and mortgage offices until someone realized we had a great deal under contract. THAT WAS AFTER ABOUT 25 NOs!

________________________________

Per - sist - ence

-noun

1. the act or fact of persisting.

2. the quality of being persistent: You have persistence, I’ll say that for you.

3. continued existence or occurrence: the persistence of smallpox.

4. the continuance of an effect after its cause is removed.

________________________________

The reason that I’m even writing about this is because of a conversation I had with one of our students recently. Several weeks ago, on one of our monthly coaching calls, we talked about financing strategies for one of his deals. He contracted a great deal and wanted advice on the best way to secure financing. He passed the investment opportunity by a few people but with no luck. He wanted to know what to do next.

After our book club meeting this past Wednesday, he updated me on the deal. He looked into getting a credit line from a bank. But, he got turned down…

The decision that he made right then in that moment is what makes all the difference in the world and defines those who succeed as investors and those who don’t.

HE CHOSE TO PERSIST! And you know what happened…two banks later he got the financing that he sought after. A credit line for the exact amount that he wanted for the deal.

Let this be a lesson to anyone that is having difficulties getting started as a real estate investor. He made a decision to get what he wanted. If you ever have a great deal under contract and you say so yourself, “How am I going to get this deal financed.”

Remember…

PERSISTENCE! THAT’S HOW TO GET A DEAL FINANCED!

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Popularity: 30% [?]

Have I got your attention???

First, I am going to tell you exactly what will most likely either stop you or at least get in the way of your increasing your profits by 300% in the next 90 days. Since I’m going to tell you what it is, I’m hoping you will identify it as soon as you see it and face it head on. Your Comfort Zone! It is one of the biggest roadblocks that you will continually face throughout life no matter how high you go. You are probably very familiar with it and know exactly when you are stepping outside of it. When you get that light headedness, stomach wrenching, uneasy feeling that makes you just want to STOP what you’re doing and retreat back to safety, you know that you have ventured outside of your comfort zone.

Over the years, I have conditioned myself to identify the feeling and attach an entirely different meaning to it. It’s the same idea that Tony Robbins teaches with neuro-associative conditioning (his branch of NLP). I know that when I do something uncomfortable, I have taken a step in the direction towards growth and progress. I know that I am in a position to learn an extraordinary amount. By knowing this to be true, I’ve attached that uneasy feeling to tremendous growth and development. I actually feel excitement now when I used to associate negative feelings with it.

Anyway, enough about that. Just know that to increase your profits by 300%, you’re most likely going to be uncomfortable at some point. Whether that means being uncomfortable about investing more money into your business, uncomfortable approaching and negotiating with sellers, or uncomfortable learning how to track and account for the details in your real estate business.

3 Keys to Making the 300% Leap (assuming your willing to step outside your comfort zone)

1. Fire Up Your Marketing Plan - You cannot reasonably expect to make 300% more profit in the next 90 days without putting some serious attention to your marketing strategy. If you don’t have leads coming in at all or don’t have as many as you would like, how else do you plan on getting the phone ringing? MARKETING! And you might as well go ahead and decide to accept that marketing is an investment, NOT AN EXPENSE. If you are saying to yourself, “I don’t have money to invest in marketing, I’m broke.” Well, there’s plenty of Low-to-No cost marketing techniques out there. Your willingness to do them is the only question at hand. Check out some of our marketing posts, you will find plenty of techniques. If you are not satisfied, shoot me an email, and I’ll help you out. If you already have 30 to 50 leads coming in per month, you’re going to need to triple that. This may involve simply investing more money into your marketing system or may force you to try something you’ve never tried before. Either way, you’ve got to take the next step.
2. Sharpen Your Negotiating and Sales Skills - Whether you like it or not, you are a salesman. If you don’t like the sound of that, assign another mental representation to what you think of when you think of a salesman. Everyone is in sales whether they admit it or not. As an investor, you are going to be selling contractors, investors, buyers, sellers, attorneys, accountants, and possibly employees just to name a few, on your ideas every single day! If there was a master skill to success as a real estate investor, I think that it would be to become an excellent communicator. That is really all negotiating and sales is…communication. So my question to you is, “What have you done lately to improve your negotiating and sales skills.” What have you read, what have you heard, and what have you tried lately to improve upon your ability to sell effectively. A great book that is an easy read is Zig Ziglar’s Selling 101. Also, Peter Conti and David Finkel’s books are a goldmine for good scripts for negotiating. You may not even realize how powerful they are until you study the subject in depth. My recommendation to you is to find a good mentor, and simply do what he or she says. A natural tendency is to do things your own way just like it’s a natural tendency to stay in your comfort zone. Take an expert’s advice and once you master it, then tweak your strategy to best suit your particular style.
3. Get a Laser Focus on the Numbers - What I mean by that is, “know your bottom line in every deal you do, know which marketing strategy(s) is bringing the best results, keep your eye on what you’ve paid your contractors, watch the time tables and budgets for your projects and make sure they are staying on track.” And I say this all from experience! I’ve thought I knew exactly where we were in a deal and then to my dismay, totaled up the numbers, and WHAM, we only made half the profit we were supposed to! Last fall, we had 5 or 6 renovations going on at one point and extended money to one of our contractors that never completed the work. I didn’t realize we were paying him for work yet to be completed, and now I’m having to file judgments against him, probably end up in court, and waste a lot of time! They say you can’t manage what you don’t measure, and I will attest to that! The closer you pay attention to the details, the more money you’re liable to make.

To increase your profits by 300% in the next 90 days, no matter what level investor you are, do these three things. Step outside your comfort zone! Your wallet will be thanking me later!

By firing up your marketing plan, leads will be pouring in from all directions. By honing and perfecting your negotiating skills, your closing ratio will dramatically increase. Coupled with having an avalanche of leads, you’ll be on your way.

BUT, don’t forget to keep a watchful eye on the numbers. Remember, you can’t manage what you don’t measure. And if you want to manage to increase profits by 300%, you’ve got to measure your successes and failures. That’s the only way towards improvement!

Popularity: 50% [?]

Last week, I was driving across town and had the idea to begin compiling the most comprehensive list of useful real estate investing websites and resources on the net. I planned on posting it this week and categorizing each website to make it easy to find exactly what you need. I spend an extraordinary amount of time on the web and thought this would be quite a valuable resource.

Yesterday, I was reading through a number of real estate investing blogs that I check out from time to time and low and behold, Scott Roemermann has already put together quite an impressive list. No need for me to duplicate his work. So, here you go…

Here is a clip from his post:

“This week we’ve put together a fairly comprehensive list of resources for you to check out. You can start using many of these immediately as they are free of charge. As for the others, you should weigh up whether you need them for the stage you are at with your business.

We have first-hand experience with many of these sites but not all of them…”

Check out Scott’s post, 101 Real Estate Investing Resources : A Professional Investor’s Rolodex.

Popularity: 31% [?]

Oh the joy of dealing with contractors! Where to begin?

Some experts might say, “They don’t call them ‘CON-tractors’ for nothing.” I would never say such harsh things about these wonderful hard working Americans, but I can see where this area of the business could be a little frustrating. Over the years, we have honed our team down to a few trustworthy experts in their given trades, but it took quite some time to find them. So, I’m going to give you a few sure fire proven tips to cut out as much B.S. as possible in choosing your contractors carefully.

1. Ask for Referrals! Talk to other successful rehabbers in your area, and see who they are using to do their jobs or who they would refer. Ask about their experiences with these people, how long they’ve used them, the quality of their work, if they could be counted on, etc… (If you are going to use another investor’s crew it is proper etiquette in the real estate world to ask the investor first, as they may have other projects lined up for them).
2. Don’t Always Accept the Cheapest Bid! We’ve all heard, “You get what you pay for.” Sometime good quality just costs a little more. I know investors don’t want to hear that. They also don’t want to deal with managing the type of renovation they just signed up for. I spoke with a friend a few months ago (who hasn’t been through our real estate investment training) who hired these guys to pull up carpet and lay down some hard wood floors for her because they were $85.00 cheaper than they guys that people referred to her. Well, needless to say, 60 days past estimated completion date and $10,000 over budget later, she realized why she should have gone with the other guys. Often times, contractors in need of work will outbid others to get a job. Why do you think the contractor is in need of work in the first place?
3. Know Who Your Dealing With. Get an application from them with all their information including but now limited to; driver’s license number, current address where they live, all of their phone numbers, previous jobs and clients they have worked with. Get a photocopy of everybody’s ID who is going to be on the job.
4. Call Their Previous Clients! Not only the three that they give you, but the last three jobs they completed. See what their clients thought of them. Did they do a good job? Did they finish on time? Did any unpleasant surprises pop up in the process?
5. Document Absolutely Everything in Writing. Make sure that you have your agreement in writing with a “Scope of Work” attached outlining exactly what is to be done, what you are being charged, date by which work is to be done, and the penalties if the job isn’t finished on time.

How do I know this? By learning from years of heartburn dealing with problem contractors. Put these ideas into play immediately in your renovation business, and you will save yourself time, worry, and a whole heap of money!

Popularity: 27% [?]

 Here’s a clip from a post over at The REI Brain:

“I’m always a pretty positive guy and hate it when people start off in any discussion by looking at the negatives. There’s just too much negative talk out there in today’s real estate market … especially when there’s so much positive out there for savvy (and ethical) real estate investors to grab a hold of.

Anyway, here’s some positive news for all of those people who say the real estate market sucks.”

Check out the 10 Most Appreciating Real Estate Markets in the United States Summer 2008.

Popularity: 24% [?]

1. Always, always, always do what you say you’re going to do! Absolutely no exceptions. This alone will put you light years ahead of the competition.
2. Be fair and honest. You will be liked, admired, and respected in your community.
3. Maintain a positive mental attitude everyday in everything that you do.
4. Never take your eye off the ball and beware of your comfort zone.
5. Remember that the best time to do a deal is right after you do a great deal. Keep the momentum going!
6. Always meet people on their level in all areas of business and life.
7. Smile. It’s contagious.
8. Surprise people with your character. This practice will always pay the best dividends over time.
9. Forgive yourself if you fail. And as John Maxwell would say, “Fail Forward.”
10. Set clearly defined and measurable goals. Read them everyday.

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Real Estate Investment Tips and Strategies : Don’t be a Columbus Type Investor

Popularity: 21% [?]

Have you ever heard the phrase, “Don’t miss the forest for the trees?”

For awhile, I never quite understood this one. I kept hearing it in speeches and seeing it in books though, and come to find out, it refers to the tendency to get caught up in the details and miss seeing the big picture. Well, this is exactly what happened when we first got starting as beginning investors.

We were the type of beginning real estate investor that devoured every piece of information we could get our hands on. Shortly after buying our first couple investment properties, we were looking into more real estate investment buying strategies and caught the short sale bug. Short Sales were one of the hot fresh topics that a bunch of gurus were professing in their books, courses, and CDs. So, we bought a short sale course by Dwan Bent-Twyford. It was a very simple course but was enough to get us started, and ultimately, do our first few short sales.

One of the short sales that we were working on was a house in Hanahan, South Carolina. The seller had a gambling problem and was losing his house to foreclosure. He was very depressed every time I saw or talked to him on the phone. The reason I tell you this is so that you will know the types of people you will be working with. Most people facing foreclosure have gone through some very difficult times so be ready to empathize with them.

Being that we were engrossed in the mindset to short sale anything and everything, we put together a short sale package and commenced negotiations with the bank. If you know anything about short sales, you know that they can take awhile. A couple months passed, a couple offers got rejected, and we hadn’t made measurable progress. The seller was getting harder to contact and restless. He had already accepted that he was going to lose his house and get nothing from the sale.

One day when reviewing the file, I ran the numbers again. It looked like there was chance that there may be enough equity just sitting in the deal if we were to buy it subject to. I ordered reinstatement figures and viola! We had a deal! We were barely able to keep the seller interested in seeing the sale through. Needlessly negotiating with the bank for months almost cost us $30,000.00.

We were so caught up trying to do a short sale that we didn’t notice that it was a deal as-is. All we had to do was close on it!

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Popularity: 21% [?]

Soooo, I was in traffic court last Wednesday for running a stop sign and learned a couple very valuable lessons. If practiced, these nuggets of wisdom can set you apart from your competition with ease. But as Jim Rohn would say, “Most things in life are easy to do, but they are also easy not to do.”

Lesson # 1

As I entered the court room about 10 minutes early, I realized how many people were just twiddling their thumbs and staring at the wall with blank looks across their faces. After sitting down, I scanned the room to see if anyone was doing anything constructive. Out of about 45 people, one woman had a binder she was studying and I had Dan Kennedy’s No B. S. Business Success book, the current book we are reading for our book club. These people that have a reckless disregard for their time are the same people that complain day after day, week after week about how unlucky they are, how things never go their way, and that there’s never enough time in the day.

I was able to read for almost 45 minutes while sitting in court. It made me realize how much time people waste in life that could be spent to get ahead. But, I guess this makes sense after all. Less than 5% of people in court that day planned to spend their time constructively by bringing something to add value to themselves. That’s about the same percentage of people they say set goals and are successful and happy.

Value Your Time! Because if you don’t, no one will!

Next time your waiting at the car wash, getting your car serviced, at the DMV, or in traffic court, bring something to work on that will add value to your life. Bring a real estate investing book, a course, or just a notebook. When you have 30 minutes to an hour on your hands, this can be a great time to review your investment goals, write new ones, and do some business planning.

Lesson # 2

I was driving through a neighborhood to take a short cut to a local coffee shop that I frequent. There are a couple stop signs that I choose to ignore from time to time. I typically slow down a little bit but don’t come to a complete stop.

I must have thought I was in a hurry that day because I pretty much drove right through it and to my dismay, a cop was sitting right there staring at me. Before he could even turn on his lights, I started to slow down and pull off the road. I gathered my license, registration, and insurance card so that by the time he came to my window, I was ready to hand it over to him.

He asked me if I knew why he pulled me and I said, “Well, yes. I blatantly ran that stop sign and deserve a ticket for doing so.” My honestly almost shocked the cop as he told me that I was the first person all day to admit to my infraction. He ended up dropping my offense from running a stop sign to careless driving. He remembered me when I was called in front of the judge in court and mentioned this to him.

I walked out of court with no points and a discounted fine!

Honesty Pays!

By simply acknowledging what both myself and the cop already knew, I set myself apart from the crowd. Business ethics are mentioned throughout business books and courses but seldom followed. If you are honest with yourself, to other investors, contractors, buyers, and sellers, you will immediately set yourself apart from the competition. It’s that easy!

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Popularity: 19% [?]