If you missed the first two episodes of the Rio Street Flip, check them out first:

Episode 1 : Due Diligence for 5536 Rio Street

Episode 2 : Kicking off the Renovation

In today’s tumultuous market, flipping properties can be a dangerous game. There are definitely things that every investor should pay close attention to when considering doing a flip.

Here’s a quick run down of what you’ll learn in episode 3, “Flip Tips in Today’s Market”:

• 4 flip tips to minimize your risk in today’s real estate investing market.
• Updates on the Rio Street Flip.
• Why we decided to sheet over one of the doors in the kitchen.
• Changing the configuration of the kitchen.
• Flip tips from Bobby Wallace, leader of the Charleston Real Estate Investor’s Association.
• Flip tips from Wil Christenson, full time investor, entrepreneur, and fellow contributor at MustKnowInvesting.
• Mortgage broker extraordinaire, Julie Blumetti, shares what to look for in a retail buyer.

Click Here to Watch Episode 3 : “Flip Tips in Today’s Market”

Our October 16th deadline to have the renovation 100% completed is fast approaching.

Stay tuned for the next episode . . .

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Real Estate Investing FAQ (Frequently Asked Questions)

How do I get started investing in real estate?

Education comes first. Developing a good knowledge base is important so that you can determine the best investing strategy for your specific situation. There are a few real estate investing books that I recommend on the recommended reading page. Check out #49 for a list of real estate investing websites.

But, do not make the mistake of thinking you have to know it all before you take any action. True learning takes place when you take what you study and put it into practice.

Finding a real estate investing mentor is a way to fast track your way to success. Learning from an expert’s experience and mistakes can save you a ton of time and money.

What typically holds back beginning real estate investors when getting started?

I’m going to cover the top 2 things that come to mind.

1. Negative Thinking

This covers negative self talk, self limiting beliefs, and accepting negative feedback from others as if it were true. This is the most destructive type of thinking that exists. No matter what vocation you’re interested in, if you want to be successful, this must be addressed. Being optimistic and positive is a standard trait among the top performers in every industry. As a Man Thinketh, by James Allen, is an excellent book on the subject. Also, check out 4 Fundamental Assumptions from Your Real Estate Investment Advisors.

2. Inaction

Bottom line, if you want results, you’ve got to get off your butt and take action. Reading a hundred books on real estate investing and taking some seminars isn’t going to do anything for you unless you put it into practice. I’ve seen too many professional seminar attendees that continue to spend thousands of dollars every few months but still haven’t bought their first deal. That’s ridiculous! Start making phone calls, start your marketing campaign, and go out and make some offers!

What’s the best way to finance a deal?

Deals can be structured in many different ways as a creative real estate investor so having multiple options provides you the best way to finance them.

Start by looking at your own resources (cash, equity, credit, etc.). Determine what assets you may have personally to use in your real estate investments. If you have some cash or good credit, that can definitely aide you in getting started but is not a necessity . . . I started without cash or credit.

The first and easiest lender to get on board on your team will be a hard money lender. They lend based on a property . . . not a person. Bring them a good deal and the financing is waiting. You can most likely find one at a real estate investment club near you.

Partnerships can be a great way to get deals done. There is a limitless number of ways that partnerships can be set up so be as creative as you want. Our first partnership deal was a 75%/25% deal split. The partner provided the financing and got 25% of the net profit once the property was sold. Check out Profiting from Partnerships for more on that.

Recruiting money from private investors can be one of the most profitable and flexible ways to finance your deals. A private investor can be anyone that wants to make a good return on investment from real estate. We did a free no pitch 100% content webinar on recruiting private money about a month ago. If you missed it, click here recruiting private money webinar replay.

Click here for more on real estate investment financing strategies.

How is the current market affecting real estate investors?

It has affected my business mainly by making it more difficult to monetize properties through sales and refinances.  When selling a property, there is a great deal of competition. In my area, there has been a 250% increase of the number of houses on the market compared to 3 years ago. The mortgage industry is still changing so much, who knows what’s in store for us there.

But, with that said, it’s a great time to buy! Anyone that has a lot of cash and/or has the ability to buy and hold properties is in a great position right now! There hasn’t been a better time to buy in many years.

In my opinion, the most important thing you can do right now is to plan for multiple exit strategies. This will insure that you do not put yourself in a tough spot with a house in today’s market.

How do I protect myself when putting a property under contract?

One way is to limit the amount of earnest money that you put down on the contract. We, as investors, rarely put down any more than $500 as an earnest money deposit. We typically put down $100 for earnest money. This money is held by the  closing attorney or title company of our choice.

Another way is to have a clause in your contract that states something like, “This offer is subject to partner’s approval.” It can be as simple as that. Doesn’t matter if you technically have a partner or not. This will allow you to pull out of the deal if you find out that it’s not what you thought it was.

After you’ve put a property under contract, you want to make sure to file the right paperwork against the property to protect the deal. The last thing you ever want is to get an awesome property under contract and lose the deal because you failed to act intelligently about it.

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If you missed the first episode, check it out before watching the newest installment. It’s on our due diligence for the property at 5536 Rio Street, Charleston, South Carolina.

Episode 1 : Due Diligence for 5536 Rio Street

We just closed on the property last Wednesday, September 17th. The second episode commenced last Friday when we kicked off the renovation.

Here’s a quick list of what you’ll find in the video:

• Meet our partners on the deal, Sean Hall and Eli Sanderlin.
• How the lead came in and a “Must Know” Tip on marketing.
• Why Sean and Eli decided to partner with us on the deal and the value of working together.
• Some interior shots of the property after the initial tear out.
• How the renovation will unfold.
• How we plan on adding curb appeal with Chris Williamson and his crew.
• The Negotiation and another “Must Know” Tip for success.
• Our total repair estimate and time line to get it all done.

(if you are reading this article from your email subscription, you may have to go directly to the blog to see the video)

To give an overview on the deal, here’s what we are working with:

Purchase Price: $58,000

Repair Estimate: $15,000.00

Estimated ARV (after repaired value): $115,000.00

Time Frame for Renovation: September 17th to October 16th

As I stated in the video, it’s crucial based on our exit stategy of retailing the home to finish the renovation by the middle of October. This will give us a solid month to market the property prior to the winter months.

Stay tuned for the next episode!

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Here’s the top 3 real estate investing articles of all time here at MustKnowInvesting.com:

1. 59 “Must Know” Tips in Creative Real Estate Investing to Minimize Risk and Maximize Returns

This creative real estate investing article presents tips throughout the entirety of the investing process. Whether you are a beginner, an expert, a flipper, a wholesaler, however you relate to the real estate investing world, you will be provided with some insights into safely maximizing your returns.

There are a ton of links throughout this article to help guide you through the blog to find exactly what you are looking for.

click here to read the article

2. How to Turn a Good Deal into a Great Deal : Creative Real Estate Investing

You’ll learn 7 simple ways to turn a good deal into a great deal such as getting “the stuff,” negotiating seller financing, rezoning a property, and more.

Remember, you never want to make the mistake of “trying” to make a deal work. Either it’s a deal or it’s not! What we’re talking about here are some simple ways to pad the deal for a greater comfort level and profitability!

It doesn’t ever hurt to be on the conservative side of things . . . especially in today’s market!

click here to read the article

3. The Most Costly Mistake You’ll Ever Make as a Creative Real Estate Investor

Here’s a little excerpt:

Have you ever read or heard about a killer deal that a real estate investor did and thought to yourself, “Why in the world would the seller ever accept an offer like that?” or “I could never make that kind of an offer” or “How do you talk someone into that?”

If you answered “yes,” than you have most likely suffered from this common profit destroying tendency. At some time or another, ever creative real estate investor has made this mistake and must always be on guard against it . . .

click here to read the article

Enjoy!

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Traditionally, real estate investing has been taught through various books, home study courses, and seminars. Most of the books that are on the market are good for getting an idea as to what real estate investing is all about but don’t give you the information that’s needed to actually go out into the real world and make it happen. For that kind of info, you’ve had to pull out your wallet if you wanted the good stuff. Home study courses can cost anywhere from $300 to a couple thousand dollars, and seminars usually run you $3,000 to $5,000 and sometimes more.

All of those learning tools and experiences are great, but times are changing. Through the explosion of the Internet, information is just a click away and FREE. Now the problem is sifting through the information glut and finding a reliable source for good actionable content.

Check out the video below so that you can get a full view on how we look at your real estate investing education in today’s world and how MustKnowInvesting fits into that.

(if you’re reading this post through your email subscription, you may have to go directly to the blog to view the video)

Bottom line, we aren’t holding anything back as far as what we teach, high level creative real estate investing tips, techniques, and strategies. You simply don’t have to go out and spend hundreds or thousands of dollars anymore to get the best of the best creative real estate information.

Your Golden Opportunity

Comment on this post and tell us what you want to learn more about! We’ll be happy to write articles specifically to suit your interests and needs. We look forward to hearing from you soon!

Happy Investing!

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This post is for the 85% of creative real estate investors who say to themselves:

____________________________________________

“I’m not where I want to be. I want to

Make BIG MONEY Investing in Real Estate!

What am I doing wrong?”

____________________________________________

What’s the difference that makes the difference between mediocrity and success in creative real estate investing? What’s the missing link?

Before we can get to the missing link, you must ask yourself, “Why am I in Business?” If you didn’t say profit as your #1 reason, we’ve got a problem! You are going to need to reevaluate what you’re doing if you care about becoming a successful real estate investor.

“But Patrick, the #1 reason that I’m in business for myself is to give back to my community, help my parents out financially, and eventually, start a nonprofit.”

WRONG ANSWER! These are all terrific reasons to go into business for yourself, but they all hinge on the One Most Important Thing of All, Your Business’s Profitability!

OK, so we’ve established that profit is the #1 reason why you’re in business. To get to the missing link, we must analyze what specific actions make a real estate investing business profitable.

__________________________________________

Key Focus Areas for your Real Estate Investing Business’s Profitability

1. Marketing

Do you have plenty of seller and buyer leads at your disposal? What is your marketing strategy? Do you track your cost per lead, cost per deal?

2. Your Negotiating / Communicating Skill Set

Have you studied sales and negotiating? Do you use a sales system? Do you effectively communicate with sellers, buyers, investors, contractors? How do you handle typical objections?

3. Converting Your Real Estate Investing Actions into Cash

Have you learned the ins and outs of wholesaling, assigning contracts? Do you use lease options as a strategy for selling property at maximum value? Do you know how to flip a house and come out on top?

4. Leveraging through Systems

What real estate investing systems are you using to manage and organize your business?

_____________________________________

Depending on where you are at in your real estate investing career, you will want to focus more on some of the key focus areas more than others. For instance, if you’re a beginner,  the first action that should be taken would be in marketing. If you don’t have any leads, there’s really not anything for you to do, right? No way for you to make any money as a real estate investor.

But, even knowing what the key areas of focus should be for your real estate investing business is not enough. There’s still a missing link! And that missing link is the difference between average mediocre results in real estate investing and Making the Big Money!

Tune in later this week, in part 2 of this post, I’ll be explaining exactly what holds back most investors from ever achieving their dreams and what to do about it!

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We’ve decided here at MustKnowInvesting that we want to take your creative real estate investing education to the next level. And how else would we do that than by showing you exactly what we do on a regular basis in the field . . . in the real world!

Check out the video below for a preview of what’s to come. We are going to take you into our daily real estate investing experience and walk you through what it’s like to be a full time investor.

Some of our investor buddies, Sean and Eli, just contracted a deal recently on Rio Street in North Charleston, South Carolina, and they want to bring us in as partners in the deal. Often times, local investors will bring us in on deals because of our expertise in negotiating, deal structuring, financing, renovating, etc. There are limitless ways to create value in this game so always bring an open mind to the table.

In the video, I open with a few details about the deal, speak with one of our contractors about the necessary repairs, and walk you through what renovations we plan on making and why.

(if you are reading this post from your emal subscription, you may have to go directly to the blog to see the video)

In the coming weeks, you’ll see the deal unfold as we close on it, renovate it, and finally put it on the market for sale.

Stay tuned for the next episode . . .

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First off, let’s define “shopper” and make sure we are on the same page.

A shopper is a seller who has contacted every investor in the book to try and get the best offer possible. These people have very little loyalty and aren’t thinking about anything other than what’s in it for me (as if I could blame them). They call every “We Buy Houses” ad in the phone book, the newspaper, on the internet, etc.

BEWARE: A shopper can steal a ton of your time and suck the life right out of you. You spend time researching their property, do a thorough inspection, make them an offer, and . . . nothing. They tell you thanks a lot, maybe I’ll call you after the other five investors have made their offers. You drive home dejected, never to hear from the seller again.

First Line of Defense

The first thing that you can do to combat the shopper is to identify them. This is done by asking the seller a simple question.

“Have you spoken to anyone else about selling your property?”

I ask this question for a couple reasons.

First, I want to make sure that the seller hasn’t already contractually obligated themselves to another investor because we don’t want to step on anyone’s toes. You would be surprised how many times we’ve contracted a property and two weeks later, the seller is signing a contract with another investor. Sometimes they claim ignorance but usually they are just trying to get a better offer. Click here to learn about protecting your real estate deals from contract to close.

Second, I want to know if there is any competition already in the picture. Depending on how the seller answers, you’ll have a pretty good idea if you are dealing with a shopper.

Assimilate Your Battle Plan

Next, you want to gather all the necessary information so that you can position yourself for success.

“Have you received any offers?”

You want to find out if an offer has been made and exactly what that offer was.

If the seller doesn’t want to answer, just tell them, “I don’t mean to be intrusive, it’s just that I don’t want to waste any of your time. I value my time highly as I’m sure you do, and you may already have been offered much more than I could pay you. That makes sense, right?”

Find out what was offered, price and terms, and ask the seller what is most important to them about an offer. You may find out that price is not the number one concern. It could be the time frame or working with a professional company or that it’s an all cash deal. Let the seller tell you.

The #1 Mistake Real Estate Investors Make when Dealing with a Shopper

A shopper’s goal is to collect as many offers as they can. Once you make them an offer, you no longer have a bargaining chip. The seller no longer needs you. Your offer will be used as a baseline for the seller’s future negotiations.

Unless you are one of the last investors that the seller is going to meet with, you have little to no chance of securing the deal.

Winning the Battle

“How many investors do you plan on meeting before making a decision?”

This question will help you gage when to schedule your appointment with the seller. If you find out when you are at the property that the seller is still going to meet with someone else, take your time building rapport with the seller but don’t make your offer yet. Let them know that you will start working up your numbers and will meet back up with them after their last appointment.

Your ability to build massive rapport with the seller throughout this process will aide you greatly in your quest for the deal. You will most likely have the most touches with the seller by communicating with them throughout their shopping process.

By positioning yourself to be around at the end of the battle, you’ve got a fighting chance to win the deal! Good luck and may the best investor win!

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When you’ve been investing in real estate for a while, you often end up with a few properties that you don’t want anymore! A lot of the time, the same reason that you no longer want a property is the same reason another investor wouldn’t want it, but not always.

So let’s say that you have a beast of a property that you want to dump. A real dog with fleas, but you don’t necessarily want to just discount the heck out of it. What would you, the creative real estate investor, do to get rid of the property?

A method that I learned from my mentor is the “Must Take” technique.

The “Must Take” works by bundling a hard to move property with a much more desirable property and selling them as a package. The buyer gets the more desirable property, but “Must Take” the less desirable property as well.

Not too long ago, we sold a three property package on the “Must Take” plan. Two of the properties were in a low-income area on the threshold of a war zone. The third was in a fast-moving subdivision and actually had two houses on the lot. The investor wanted the “nice” property bad enough that he was willing to take the other two.

We managed to creatively structure a deal where we sold him the nice property on the condition that he “Must Take” all three properties. We took back some financing to sweeten the deal for him (the financing we took back was all profit from the deal anyway) and received a good return on our money. We successfully sold two properties that we didn’t want anymore, and created a win-win situation with the investor.

This example shows you what creative real estate investing is all about. There are several ways to move unwanted properties if you just learn to think outside the box. Using creative deal structuring can add hundreds of thousands of dollars of profit to your bank account because it allows you to do deals you wouldn’t other wise be able to.

Using the “Must Take” is just one tool in our creative real estate investing toolbox. Come back and check out MustKnowInvesting again soon to learn more.

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If you didn’t know it already, we have a creative real estate investing coaching program where we teach investors how to take their game to the next level. Doesn’t matter whether or not they’re brand new to real estate or been buying houses for years.

A couple of our newer students have really hit the ground running, and I wanted to ask them some questions about getting started, roadblocks along the way, and advice they would give to beginning real estate investors knowing what they knows now.

First, let me tell you a little about them. Randy and Sherlonda Adkins climbed their way up the corporate ladder for years landing very successful positions. But they knew there was more to life. After deciding to become more than employees, they embarked on an entrepreneurial journey. They have now started two businesses since 2005 offering services from technology consulting, real estate services, and seminars/key note speeches. Check out their website TheAdkinsAdvantage.

Now, let’s get to the meat!

Patrick: What was the biggest challenge you faced to get your first deal?

Randy/Sherlonda: The biggest challenge we faced in our first deal was fear of failure. We were afraid that we wouldn’t be able to get financing and had difficulty moving from reading to doing.

We also had plenty of people (that had never invested themselves) tell us things like “Oh, real estate investing, that’s risky”, “This is a bad market”, “You don’t want to be a landlord and have to deal with tenants, do you?”

We decided that we would find some people in the local area that were successful in real estate investing and interview them. We joined our local real estate investment club. A few of the investors recommended that we find our first property based on specific criteria and submit an offer. My question was then, “What if we put in the offer and the seller accepts?” Because it wasn’t like we had the money just sitting around to fund a deal.

One of the comments that helped the most was that if you get a good deal under contract then someone will finance it. With the combination of the relationships with investors, reading books, coaching and online resources, we were able to put our first deal together.

Patrick: How did you find your first couple deals?

Randy/Sherlonda: My first deal was from a past client who needed to sell one of his investment properties. And our next couple deals were REO properties that we found on the MLS.

Patrick: Why do you think that some people read all the books, take the seminars, but never get in the game and buy their first investment property?

Randy/Sherlonda: Most people are just like we were, afraid to fail. I read the other day that there was a survey given to retirees that were 65 and older. The Survey asked “What would you have done differently in life?” The response was overwhelming that they wished they would have taken more risks and enjoyed life more.

Patrick: What one creative real estate investing strategy have you found most useful so far?

Randy/Sherlonda: The most useful creative real estate investing strategy has been analyzing deals based on more than price and structuring beneficial term deals. We have also found that use of land trusts can be very beneficial in this litigious society as well as creating anonymity.

Patrick: Would would you say are three important things that every beginning investor should know?

Randy/Sherlonda: First, I would say building lasting relationships. All beginning investors should know that real estate investing is only going to be as successful as the weakest link in their network. Next, marketing, marketing, marketing! Every investor should continue to generate leads for all parts of their business such as sellers, tenant-buyers, buyers, investors, private money lenders, etc. It’s best to keep the lead pipeline full at all times if possible. And, I would have to say to never stop educating yourself. Read books, go to seminars, webinars, and really whatever you can get your hands on. As Ben Franklin said, “An investment in knowledge always pays the best interest.”

Patrick: What advice would you give someone that hasn’t closed on their first deal?

Randy/Sherlonda: Our advice is to tell everyone you know and meet that you are an investor. Join your local real estate investment club. Find a lawyer, realtor, contractor, appraiser, and other investors for your network. Find a mentor/coach to hold you accountable and most of all, find a property and put in an offer that makes sense for your business model.

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