Real Return Real Estate

Most people invest in the area they live in. Others do extensive research and target areas they feel they can thrive. Many factors go into selecting where to invest. There are some important items to consider when choosing a market.

1. Comfort – most people invest where they live because they are comfortable in their own backyard. You are sometimes limited in the amount and size of deals. Many savvy investors have more of an entrepreneurial approach and are open to deals anywhere and look for only slam dunk deals. They build systems, teams and knowledge in other areas.
2. Availability of great deals – This comes down to supply vs demand. There are many factors that affect supply and demand in real estate such as interest rates, foreclosures, the local economy, job market, affordability, etc. You can find deals in any market, the numbers just have to make sense. Some markets have a lot of competition for very few good deals, other markets have an oversupply of opportunity and you can cherry pick only the best deals.
3. Home value stability – During the real estate boom, the writing was on the wall. Affordability became so low in some of the hottest markets that there was just no way home values could stay so high. Be conscious of the trends and direction of the market, there could be a tremendous impact on the success of your deal. Some areas dropped over 40% in value in the last couple years crippling many investors who did not exit.
4. Ability to successfully duplicate deals – When you find a market, type of deal, system and team that works, duplicate. It is called cookie cutter deals. Improve your team and system each time and do the same thing over and over. Savvy investors take an entrepreneurial role and delegate the daily processes and management to their team. Then they can concentrate on growing the business and high level decisions, while on vacation.

For more Free articles, Guides and information visit us at www.realreturnrealestate.com.

Most investors go to networking events, real estate clubs and seminars. I’m sure you have stumbled across some very successful investors at these events. You may even be able to point out a handful of extremely successful ones. Just think about how hard and how long these investors have worked. Wouldn’t it be great to know what they know? What is it that makes these investors so successful?

There are two things most extremely successful investors have in common. They work no where near as hard as most investors and a fraction of the time. Why? Because these investors are running a business, not working in a business. They have delegated the daily processes, even delegated the management. They have completely separated themselves from the grind from daily processes and they can spend months at a time on extravagant international vacation while their business runs on its own. They are entrepreneurs.

Most people are technicians and handle all of the daily processes themselves. They are do-it-yourselfers and can’t fathom the idea of delegating tasks. There is only so much time and they can only do so many deals which constrains profits. Conversely, entrepreneurs unleash their team and focus on high level decisions, growing the business and ideas to improve the business. Meanwhile the managers run the business and the technicians handle the daily processes. Sure they may only make 80% of the profit as a do-it-yourselfer. But they can do 5 time, 10 times, even 20+ times more deals. They are not restricted, they delegate, build effective systems and teams. If you want to become extremely successful, become an entrepreneur. The most influential book I have read is EMyth Revisited by Michael Gerber. I strongly suggest you read this book, it may completely change your approach to your real estate business.

For more Free articles, Guides and information visit us at www.realreturnrealestate.com.

Savvy investors are getting creative and taking control over the success of their investments. Many are using Self Directed IRAs, some are even taking advantage of the oversupply of opportunity in real estate. They are borrowing against their portfolio and making more as a passive real estate investor or Private Investor. All of this is made possible using a HedgeLoan and becoming a Private Money Lender.

What is a HedgeLoan? In the simplest explanation, it is a loan against your securities. You can get a loan backed by your stocks, bonds, mutual funds, IRAs and other securities. No FICO scores, no lengthy approval process, loans close in as soon as 48 hours. Check out www.hedgelender.com for more information.

So how can a HedgeLoan increase your portfolio returns by 5-10%? Easy, you be the bank as a passive real estate investor sometimes called a private money lender. You charge a higher rate than you incur and can increase your return on your portfolio by 5-10%. You pay 4-7% and charge 8-15%. Check out the loan comparison guide www.hedgelender.com/ProductComparison.pdf.

So two things must be done, follow the steps here www.hedgelender.com/closing.htm to obtain a HedgeLoan and find a credible real estate investor with a successful track record. Make sure you fund deals at no higher than 70% LTV. The current economy and lending environment has resulted in an oversupply of tremendous opportunities for real estate investors and one of the best times ever to be a private money lender. For questions or guidance on this or more on Free articles, Guides and information visit us at www.realreturnrealestate.com.

When you make decisions, do you make good informed business decisions? Are you using accurate and justifiable data, facts and information? Do you use stories and information from the news to make your decision? If so, I would recommend checking up on the information to make sure it is useful. You see, the goal for the news is to get ratings. For whatever reason, people love fear and drama. That is what the news is selling.

I heard a funny story about the results of a study that ranked safety of cities. What they didn’t tell you is that there was only 2 cities in the study and they didn’t give a safety rating. The actual results were City2 was much safer than City1. Here is what was reported in news stories. In City1 they said that City1 is the 2nd safest and City2 is 2nd to last. In City2 they said that City2 is the safest and City1 is least safe. Both true, but a complete massaging of the truth. So how can you make an informed business decision when the News massages the truth to get ratings?

In regards to real estate the news talks about the entire market and are often very speculative. They talk about home values going up or going down in the entire market or large areas. Well an investment is dependent on that single property not the entire market or area. And even if the market is going down, if you purchase something at an extreme discount like at 50% LTV and it cash flows, then you can still make money even if the market goes down 40% like it did in some areas of the country. The news sells fear and drama to the masses. I strongly recommend justifying the facts to ensure accuracy. Use good information to make your business decisions.

The most successful investors do the exact opposite of the masses. When the news stories are optimistic about real estate, everyone runs to purchase. Smart investors are selling high during these times. Lately the news stories have been very negative regarding real estate making people fearful and run from real estate. Smart investors are buying low. My recommendation is to justify the source and information provided to make sure it is accurate and useful in making an informed business decision.

We are like an open book, feel free to ask questions and comment on our articles. For questions, more Free articles, Guides and information visit us at www.realreturnrealestate.com.

I love my car. It is exactly what I need. However it is not what I want. When gas prices went up to over $4 a gallon, I decided to purchase a car with cash that was reliable and good on gas. I did not care what it looked like, it just had to last me 2 years, max $2K and around 30 miles per gallon. So I went on craigslist and began my search. I did the following as was amazed how similar it is to finding a motivated seller and purchase an investment property:  

1. Searched for the keywords ‘must sell’ and ‘motivated’
2. Sent out a lot of lowball offers, all cash and to purchase fast
3. Completed a diagnostic inspection that cost $75 and saved me a mistake on 2 cars
4. Talked him down more after the inspection even though the problems were not a concern
5. Lastly, I test drove it and talked him down more due to the cosmetic dents, scratches and uncleanliness.

The result was much better than expected. Instead of spending $2K and getting a car that will last me 2 years, I spent $1K and got a car that will last me 5 years. I talked the guy down from $2700 to $1800. Then to $1300 after the inspection, then to $1000 after the test drive. The seller was motivated and due to the cosmetic issues there was little demand. I did not insult him when asking for price reductions, I explained the inspection items and the dents were a turnoff, but would still be interested if it was reflected in the price. Once I got an OK for a price reduction, the negotiation began and the seller said Yes to every price reduction request. Even though my car does not impress people, it is exactly what I need. I love getting into that car everyday knowing that I got an incredible bargain, just like we do when purchasing investment properties. With 1K in body repairs the car would be worth 5K. With purchase of 1K, and if I chose to do 1K in cosmetic repairs, the car is at a 40% LTV. Not too shabby. I used the same strategy to purchase a laptop. I ended up getting a nice one for $50 and a second one for free along with a really nice laptop bag. It pays to build rapport and get people to like you. I strongly recommend all investors try purchasing an item off Craigslist at a bargain price. It is great practice for negotiating and learning how to find great deals. Once I have enough money to purchase my dream car with cash, I will do so. But for now, I love that I got a better deal then anyone on the road.

We are like an open book, feel free to ask questions and comment on our articles. For questions, more Free articles, Guides and information visit us at www.realreturnrealestate.com.

When investing in rehab properties, you often run into homes that are in really bad condition. These are the homes I love that are in complete disrepair, ugly and unlivable. To many this is a turnoff and says headaches. To rehab investors it says profits and the evaluation process begins. When creating your rehab list and budget, it is crucial to focus on completing Value Added Repairs. Items that add value usually have to do with Kitchens, Bathrooms and Curb Appeal.

It is key to get people to fall in love with your property and get emotionally attached. They must imagine themselves living in the home and it starts with the property being inviting when they first lay eyes on it. The first impression must be “WOW.” The home is inviting with nice landscape, fresh paint and some pop in the colors used. Sometimes it is as easy as adding a little paint and cleaning up the landscaping. Putting about 2K into Curb Appeal can often increase value significantly.

Then they enter and find warm neutral colors and new or at least nice flooring. But the Kitchen is usually the place they head. Women love kitchens and this will be a huge part in the purchase decision. Don’t overdo it though, putting in a 40K kitchen into a 100K home does not make sense. Spending 5K could with nice appliances can already get the buyers thinking about cooking and enjoying dinner with family and guests.

The 3rd part of the home where significant value can be added is the Bathrooms, especially the bath in the Master bedroom, the one the buyers will be using. They will instantly imagine using the bath and what it will be like to sleep, live and spend time in this Master bedroom and bathroom. Adding a bathroom or converting a half bath to a full bath can also add significant value to buyers with children.

Finally, the mechanics, plumbing, electrical, roof, foundation, etc must not create red flags during the inspection period. That can kill a deal really quick. It is important to not go overboard on items such as finishing a basement, materials that overshoot what is common and expected in the neighborhood and doing any upgrades that will not add value. If you ask yourself, will the $ I am spending on this repair add value to the sales price? If not, save the money. Focus on Value Added Repairs with Kitchens Bathrroms and Curb Appeal.

Rent and hold properties you really want to keep it cheap and simple. It has to be rentable so the answer has to be Yes if you ask yourself if repairs will increase rent and keep the tenants around.

We are like an open book, feel free to ask questions and comment on our articles. For questions, more Free articles, Guides and information visit us at www.realreturnrealestate.com.

Let's face it, money does not disappear, it changes hands.  So where is it? There is so much money sitting on the sidelines or in investments making little or negative returns. Many of these individuals would love to have a double digit return backed by real estate.  Here are some keys to get more Private Money then you could ever need. If you find this information helpful, you can download a Free Guide on How to Raise Private Money at www.realreturnrealestate.com.

1. Pitch your opportunity to everyone – You are not asking for money, you are inviting people to make a great return on their money. The purpose of this step is to get them excited and begging for more information. Usually just an elevator speech and a success story if needed. Do not answer questions, set up a face to face meeting and present your program. Opportunity awaits the savvy investor.
2. Face to Face Presentation – Set up a face to face meeting with all decision makers. At this meeting you can build the most important thing when it comes to generating private money, build TRUST. You can also present using a net meeting if face to face is not possible.
3. Find a great deal, illustrate a win-win, the deal and the risk - Educate interested parties on what is in it for them, the numbers on the deal and how the deal can withstand the worst case scenarios.
4. Play the numbers, all you need is one YES - Do not give up after 3 people, you may need to present it to 300 people before you get the desired results.  It is never a bad thing to have people fighting to give you their money.
5. Handle objections, ask for referrals - Learn how to handle objections, anticipate the most common ones. And always ask for referrals. If you are leaving a presentation without a YES you should have 3 referrals.
6. Treat them like your grandmother - Be great to them, not good, great.  Also be completely honest and set expectations so you can shatter them.

There are a lot of mistakes that can be made in Real Estate. In fact, many savvy investors still make mistakes or have overcome huge mistakes in their investing careers. The keys are to recognize, avoid, learn and move forward from these potential pitfalls. Here are 6 beginner mistakes when investing in real estate.  

1. Speculate – Most new investors follow the herd, listen to the media and buy with the hope the property will appreciate. This is as much of a gamble as hand picking stocks or going to the Casino. Buy below market properties that cash flow.
2. Buy at Market Value – Beginners almost always buy property straight off the MLS for market value. You can find deals in any market and there are always distressed properties. Cherry pick from distressed properties at 70% or less of market value.
3. Fall in love with a deal – Many beginners are guilty of this one. Their first few deals they spend minimal time finding a deal. As soon as a prospect is located, they fall in love and do anything to get that property. Emotions drive the decision, instead of making an informed business decision. Key is to get as many prospects that fit the criteria into the pipeline, filter out the duds and cherry pick only the best deals.
4. Put too much down – Real estate is an OPM or Other People’s Money industry. You should minimize how much of your own money is in a deal. And always make sure you have plenty of reserves to handle any not so pleasant surprises.
5. Only 1 exit strategy – To minimize risk, it is imperative to have multiple exit strategies. If you cannot flip a property you can quickly end up upside down, behind in payments and lose the property and your credit. Instead, buy below market properties that cash flow. That way you can sell retail, wholesale, lease option, seller finance, refinance, even rent and hold.
6. Buy in Warzones – It is wish to buy property at a deep discount. In today’s market you can find huge discounts in many areas with the glut of foreclosures. Do your due diligence. Buying a property for 20K worth 80K sounds like a slam dunk, but not if the property is vandalized multiple times during repairs, surrounded by 20 other foreclosed properties and there is next to zero interest from renters or buyers due to the location in or near a warzone. Make sure there is strong demand from renters and/or ownership in the area.

Many gurus make real estate investing sound so easy. News flash, it is not. Many beginners make one, even all of the above mistakes and have a miserable first time investing experience. Whether you are a beginner or an expert, it is always a great idea to get as many expert opinions as you can. They will make you aware of many potential mistakes and red flags. Play the numbers game and cherry pick from as many prospects that meet your criteria as possible. Also always do extremely thorough due diligence. And finally, happy and profitable investing!! For more Free articles, Guides and information visit us at www.realreturnrealestate.com.

Three main questions you may have about investing in real estate are: Why invest, why invest now and why invest in Cleveland?

Due to current economic conditions throughout the US and the world, investors have watched their portfolio values dwindle. The economy is in a constant state of flux that has brought about adjustments and reversals in trends within all sectors of the market, but particularly so within housing. This has resulted in a number of changes in the real estate market in Cleveland. There is an increase in the number of renters and an increase in the number of affordable investment properties now available. Additionally, in this time of uncertainty, investors are looking more towards tangible assets.

So, why invest, why invest now and why invest in Cleveland?

Investment property ownership helps hedge against financial system collapse as people will always need a place to live.

Restricting credit markets are making home ownership less available to many; driving up demand for rentals and resulting in a positive change in rental rates.

There is a higher relative return on your investment when tax benefits and your rental income are combined. For example: A purchase of a $25,000 rental property with a net positive cash flow of $4,000 is a 16% return on your investment.

Investment property offers steady income from an asset which holds both short and long term value.

Cleveland offers good quality, affordable investment properties in a city that is investing heavily in revitalization.

To view samples deals check out Current and Past Deals at www.realreturnrealestate.com.

Some like to invest close to home, will not even leave their neighborhood.  Others will venture outside the box, their state, even their region or country.  There are some things that are very important when looking for deals.  The biggest mistake new investors make is to purchase their first investment property at market value and hope for appreciation.  This is called speculation and is not recommended.  Furthermore, these mistake prone investors usually follow the herd and purchase when markets are high.  Now who has success with Buy High, Sell Low?  It is crucial to avoid speculation as you cannot predict or control the market, rather control your success by purchasing with equity, strong cashflow and multiple exit strategies. Following the herd can get you in trouble.  In fact, some of the most successful real estate investors do exactly what the herd or the masses are not doing.  At Real Return Real Estate™ we recommend doing the opposite of the masses such as Buy right now while everyone is Selling.  Buying now while the markets are low is not enough to succeed, investors must buy with equity, strong cash flow and multiple exit strategies. That way, worst case scenarios such as huge value reductions, worsened economic conditions, vacancy, etc can occur and you will still be safe with the investment. We back it up with tons of research to find High Return deals with Very Low Risk!! For more Free articles, Guides and information visit us at www.realreturnrealestate.com.

1. Affordability - If a market is not affordable similar to how much of the West and Southeast became during the peak, you are likely buying High and could see some crippling depreciation.  PMI has incredible research and information on market affordability and probability of depreciation.  Indianapolis is considered the most affordable market as is much of the MidWest.
2. Rents - A good cash flow deal is when rents are 1% of purchase.  However, we at Real Return Real Estate™ often find deals with 2-3% which are tremendous for cashflow and significantly improve return and minimize risk.
3. Purchase with Equity - Purchase with at least 30% equity or 70% LTV.  We at Real Return Real Estate™ focus on 50% equity.
4. Have Backup Plans - Multiple exit strategies significantly lower risk.  While selling at retail when the market is high, it is often not realistic.  Make sure you can sell to investors, wholesale, refinance, rent, hold and/or lease option.

Most people are speculators, in fact the media stories are almost always speculative. They report on the value of real estate in the area, whether it is going up, down or sideways. What control do we have over the value? A crucial concept to understand is that we do not have control over the value of real estate. There are so many economic and market indicators that effect value. So what is an investor to do? Easy, instead of speculate, control your profitability and probability of success with your investments. You can make money anywhere and in any market with real estate. Some areas or market conditions make things much more difficult but you can and will always be able to control how you buy. Here are things you can do that can not only increase your success but you have control.

1. Buy at deep discounts off market value rather than at or close to market value – 70% LTV max meaning a property worth 100K you want to purchase for 70K max which includes repairs.
2. Buy a property that has strong positive cash flow – In many markets you can find properties where the rents are 1.5X or even double PITI, Payment+Tax+Insurance. $200 positive cashflow may not be enough to cover maintenance, property management, vacancy or surprises. And always make sure you have reserves to cover for these items.
3. Buy in a good area with strong demand from renters and/or homebuyers – Warzone properties look so great when priced so cheap. Well they are priced so cheap because there is such a huge supply and no demand. That is a recipe for disaster. Find the diamond in the rough in the areas that have strong demand from buyers and renters and do not have an oversupply of homes.
4. Do deals with multiple exit strategies rather than limited by one – Tremendous equity and cash flow results in the ability to flip, wholesale, sell to an investor, refinance, lease option, buy and hold, etc. Multiple exit strategies afford you the ability to make mistakes and run into surprises and still profit.
5. Buy because the numbers make sense thus making an informed business decision rather then buy based on emotions – Too many investors fall in love with the deal. This is a business, not the home you are going to live in. The numbers have to make sense or it is not worth the risk.

For more Free articles, Guides and information visit us at http://www.realreturnrealestate.com. Check out some of the example deals we have on Current and Past Deals.

First and Foremost when investing in real estate, you must find great deals. Not good deals, great deals with plenty of equity, cash flow and multiple exit strategies. These types of deals can withstand mistakes, surprises and worst case scenarios such as the bust recently where home values dropped approximately 40% in some areas and financing became extremely tight.

Industry Standards

1. Max 70% - Total cost of purchase, fees and any repairs must be a maximum of 70% of the value of the property

2. Rents are 1% of purchase - A property that rents for $1000/mth should be purchased for no more then $100,000 or rents are 1% of purchase

3. Multiple exit strategies - With equity, cashflow and flexible financing you can sell at retail, sell to an investor, wholesale, seller finance a sale, lease option, rent and hold, refinance, possibly sell the note, sell the entity holding title to the property, quick claim deed the property to transfer title, etc, etc.

Real Return Real Estate™ Criteria – www.realreturnrealestate.com

1. Approx 50% LTV - we buy properties at half the market value

2. Rents are 1.5-3% of purchase - We usually pay around $50,000 for homes that rent for $1000, sometimes rents are 3% of purchase and twice Payment+Tax+Insurance. How do you like that positive cashflow!?

3. Multiple exit strategies - with 50% equity, tremendous cash flow and flexible financing we have unlimited options to make our deals successful and can withstand worst case scenarios. We only do deals we are certain are 'SLAM DUNK' or 'HOME RUN' deals.