Re-Evaluate Your 2007 Real Estate Goals

Hey everyone! We’re fast approaching the end of June and the mid-point of 2007. Back in December, many of you participated in our 2007 Real Estate Goals Group Writing Project and others joined our forum discussion, sharing their goals.

As we get closer to July, I wanted to remind all of you to break out those goals and take a look. Have you taken steps to achieve them? Have you fallen behind? For many of you, the goals consisted doing a set number of deals. You established a quantifiable number for yourself which you can compare with the number of real estate deals you’ve actually accomplished.

How are things going?

Often times, when you re-evaluate your goals, you’ll see that you need to re-set these goals. If that’s the case, don’t fret. As people are dynamic beings, their goals will be as well. Take a look at yourself and see what is realistic, then clean up those goals so they make sense for you and your situation for the next 6 months.

If anyone is interested in sharing, we’d love to see if our goal setting session has been helpful so far for anyone! Please share your thoughts with us here!

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The first thing people seem to want to know when looking at real estate is what a property is worth. One of the keys in figuring this out is figuring out the market that the property itself is located in. Obviously these are extremely important pieces of information to know, and there are many different methods to use to do it. Unfortunately, there is only one that really makes sense for an investor. Lets look at the various options, though:

Ask A Realtor

This is typically what novice investors, as well as the realtors themselves will recommend. We have been taught that once you become a real estate agent, you suddenly know how to value properties. There is nothing further from the truth. Learning to evaluate property values is a skill that takes time and energy. You must hit the trenches to be able to do this, and that takes time. Seasoned agents are great resources, but real estate investors should not count on them to do their homework for them.

Remember that real estate agents make money when you buy or sell a property. They are salespeople. If you don’t buy something from them, they get no commission from you. It is in their interest for you to think that now is the time to buy, no matter how bad a market is. What I’m getting at is that you can never trust a salesman to give you the whole truth. While agents may know a market cold, are you going to trust someone who must convince you to buy now in order to make a living? For this reason above all others, it is imperative that you not rely on real estate agents to tell you what a market looks like.

Use The Internet

With the explosion of “property value websites” that use public records to give cool mapped out, graphical, representations of different marketplaces, the internet has changed the way people learn about real estate markets. These sites want their users to believe that they are providing an accurate picture of what a property is worth. They dazzle you with comparable properties that have sold, maps, charts and graphs, and more. Unfortunately, someone who does not understand how to truly evaluate a property themselves, will walk away thinking that they are getting a real value that means something.

This is untrue. While these sites are great tools for getting started, they should NEVER be used as a substitute for doing what it takes to understand a market, and thus, the value of a property in that market.

Get to Know the Market Yourself

There is no substitute for learning a market the old-fashoned way. As an investor, you need to see the neighborhood from the ground. You need to walk the streets, talk to the neighbors, and look at houses. Visit every property for sale in your market. Look at what they are selling for, their size, their ammenities, their flaws. If you get out there and see 50-100 properties that are for sale in an area, you’ll have a pretty good understanding about that market.

You won’t need a real estate agent, and you won’t need the internet. You will instantly develop an understanding of property and market values almost without knowing. If you do use a realtor, you’ll be able to know if they are correct in their analysis, but most importantly, when the time comes to look at a property that you’re interested in, you will know on the spot if it is fairly valued, overvalued, or if it is what we’re all in the game to find, a deal!

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We’ve all seen it before . . . a clean, polished smile uttering the words “trust me.” Sadly, these two words are some of the most dangerous out there. I want to talk a little about trust and the real estate business.

As a person with too much faith in humanity, I tend to get myself in trouble, but luckily, I learn from my mistakes . . . I’m more of a professional skeptic now. I’ve had more bad experiences in the real estate business then one person really needs to, but each of these has taught me one extremely important lesson: only trust yourself!

What does trusting yourself entail?

First, it means that you need to educate yourself enough in what you’re doing, so that you don’t need to rely on the bad advice of anyone else. This includes everyone from your friendly real estate agent, to your mortgage broker, to a teacher who may be in it for himself. I see and hear about people getting screwed by others so frequently that it no longer shocks me. If you’re educated, then you can’t be victimized by the bad advice of others. This is not to say that every realt estate agent or motgage professional gives bad advice, but if you have no idea what they are talking about, you have no way to tell, do you?

Since we don’t want to trust the good intentions of others, we also must remember that any business relationship should be in writing. When I was getting into the real estate business as a real estate agent many years back, I asked a friend of mine to mentor me. He agreed and we established a relationship . . . unfortunately, it was done by word of mouth. I agreed to help him on a particular deal he was working on in exchange for a financial return. Once the deal was completed, he simply disappeared. I got a lot of promises, but never saw a dime. As you could imagine, that was the end of our friendship, but it taught me to put EVERYTHING in writing, ESPECIALLY when working with friends!

Along similar lines, you need to learn to trust only the facts. Not the facts as someone presents them, but the real facts. Is there a difference? I’ll argue that there is, and the following example should help me demonstrate. Recently, a member of our site heard about a deal from someone who was making certain claims about both the deal and himself. He was somewhat skeptical, as he should be, of what he heard, and did some research on his own to VERIFY the claims. This research revealed that the guy couldn’t get his story straight. What he was saying didn’t mesh with the facts of reality, presenting a MAJOR RED FLAG to our member. Thanks to his research, he was able to avoid entering a relationship with someone who wasn’t presenting the REAL FACTS. Again, you can only trust yourself and what you can personally verify though proper research.

I can go on and on about this, giving dozens of examples, but I think you get the drift.

To sum it all up:

1. Educate yourself so you don’t need to rely on bad information from others
2. Put everything in writing
3. Always personally verify information by doing your own research