Every year in December, I begin the process of setting goals for the upcoming year. I actually spend quite a bit of time looking back at what worked and what could have been better.  I try to do an honest assessment of the year, and part of that assessment includes admitting that you fell short in some areas which can be tough to do. Another factor comes in to play when you realize that some of your habits (or lack of them) played a part in the end result.

Do you have any habits that are getting in the way of your success?

I have found that there are several habits that I have “acquired” that if I were to change them, would make a big difference in my business over time. I’m not talking about big things; but little things, and I am determined to make those changes in 2012. One of the things I am going to do is to tweak my morning routine so that I get to work a little earlier each day. Getting a grip on those “time wasters” is another thing I will be working on.

Was your year just good or was it awesome?

I was reading a blog post by my friend and fellow real estate investor Shae Bynes this past week. In her blog post, she not only talked about her goals but how she felt about 2011 as she looked back over the year. She said she had accomplished a great deal of things she set out to do.  She had a good year.

It was the thing she said next that really got my attention. What she said was that “She had sacrificed awesome for good”.  I read her post again, and I had to admit that I had very much the same kind of year.

I took another look at the goals I had written for myself for 2012. I had what I thought were some pretty big goals written down on that paper.  What I really didn’t see was anything that would result in “awesomeness”. I was going to need to reach further and dream bigger dreams to even get close to “awesome” and that is just what I did.  I pulled out that piece of paper and started over.

What would it take for 2012 to be awesome for you?

What would you have to do, change or maybe stop doing to move away from ordinary and become awesome? As you are looking back over 2011 and setting your goals for the New Year, is there anything in there that will make you come close to awesomeness?  If not, pull out that piece of paper and start again. None of us should settle for just “good or good enough”.

This Article is Copyright © 2004-2011 BiggerPockets, Inc. All Rights Reserved.

Goals and Awesomeness

I was jolted this week during our staff meeting when my father posed a question to the staff that got me thinking about the first company I started back in 2002.  It was almost nine years ago when I started that company.  It was a grocery wholesaling company that I started on the 4th floor of a single-man office building in Denver, Colorado.  I had always operated a little differently than others in my industry and had this idea that I could create a niche business within a niche industry.  I find it fascinating that looking back reminds me of how many people did not believe in my idea and were highly skeptical if I would even be able to pull it off.  From that single-man office in a building with views of the front range Rocky Mountains, not only did I pull it off…but, I built an $18 million yearly revenue business.  I didn’t sit around and wait to be told what I could or could not do and I certainly was not prepared for someone else to tell me what my future would look like.  I simply went to work and created my own future.

Having spent the past two weeks preparing for 2012, I found it interesting in our staff meeting when this question was posted to all 28 of our staff.

“What two words can we count on for the future of our company”?

It was not a trick question and many outside of our company – heck, outside of the world of being an entrepreneur – would not have understood.  But in our meeting, coming off of two weeks of planning, preparing and presenting by every employee, we had a pretty good idea what that answer was supposed to be.  Many who have followed our company over the years may have guessed words like Property Management or Customer Service or Social Media.  These are buzz words that we have certainly built a reputation around.  But, when developing your business plan and goals and laying out the path you want to take for the future, they are not as important as the answer we arrived at today.  Nothing is more important when it comes to your success than your belief in yourself, your partners, your staff or your company as a whole.

Creating Your Future

Real estate professionals spend a countless number of hours planning and preparing and I have known many who can prepare one amazing power point on where they are going and how they are going to get there.  No offense, but the problem is often not in the planning or the preparing, but in the believing!  Those same professionals will explain to you that the big asterisk next to their projections is because in order to hit those numbers the economy must turn around, unemployment needs to come down to 7% and the banks need to start lending again!  In other words, they don;t believe their future is in their hands.  Many industry “analysts” will tell you there has never been a more turbulent time in our history for the real estate industry.  I am not so sure that statement is or even needs to be correct.  There are a lot of challenges for our industry and it seems more obstacles are erected every day.  Now, it is times like these when I love a great motivational quote and I have a simple one that is perfect for just this occasion.

“Obstacles are those frightful things you see when you take your eyes off your goal”. Anonymous

There is no possible way to predict the future or know what is coming next.  Too often we are told to look at historical data to portend what is coming next, but clearly will not work in this day and age.  Whether we think the environment around the real estate industry is good or bad, I think we can all agree it is defintiely diferent!  It has changed over the last few years.  But there are companies, there are agents, there are investors who are absolutely thriving right now and that is because they do not look back to see what is going to happen next.  They do not look to others or experts to tell them what they future holds.  When it comes to their success and projecting their future they simply create it themselves.

A Real Estate Company that grew 63% in 2011 in this economy?!

That is not a typo.  That is the reality of what happens when you decide to create your own future.  There are boundless opportunities in today’s real estate market for every profession in the industry from agent to investor.  You simply have to anticipate what your clients need and deliver it before they even know they want it.  I have delivered many talks to business and investment groups on the topic of service your clients needs.  It is a phrase that has special meaning to our company.

My father owned independent grocery stores when we were growing up and I cut my teeth on customer service by sacking groceries and hand delivering them to the cars of every customer.  If you can remember having your groceries delivered to your car then I am sure, like me, you get a little sad every once in a while when you enter the self service lines at the local grocery store.  It reminds me of a time when paying a little more for groceries but having the same person sack them for you every week who knew you by name was more important than the items on sale and the speed at which you got done shopping.  In every company my family has started there has been an element of customer service and developing deeper, stronger relationships.  We have always believed in catering to what a client wants and needs even when they don’t know they want or need it.  As simple as it sounds, this has always been our way of gaining leverage in our industries and continuing to be innovative in our approach to our services.  When I started my grocery wholesaling company, I believed I could build a business and gain a foothold over competitors with lower pricing if I provided better and more accurate information to my clients.  By providing very personal service to them I was able to win their trust, their respect and their business.

The real estate company that grew 63% in 2011 did so by simply asking the question of what future it wanted.  When a clear picture emerged every single employee was dedicated to creating that future.  Much of that growth and success can be attributed to very personal service and having everyone believe that their every action could positively effect a clients experience.  It is that belief that mattered most.  It was the ability to develop a vision for what we wanted the future of our real estate company to look like and then simply creating it.  The opinions of the real estate experts didn’t matter.  What mattered was that when all the planning, the preparing and the presenting was completed, every mind in the room believed that it was possible to create a future that the experts said couldn’t happen.

I clearly believe that there is lot more to success than simply good planning and hard work.  There is a certain mentality that comes with being an entrepreneur and being successful.  Real estate professionals will tell you that there have been many people left in tatters by the real estate industry for various reasons.  However, there are many, many more success stories in real estate and I can promise you that each of those success stories have a common trait.  They believe in their vision and they create their own futures.

This Article is Copyright © 2004-2011 BiggerPockets, Inc. All Rights Reserved.

The Best Way To Project Your Future…Create It!

No matter how you view it, the real estate business is a business for entrepreneurs!  It is the ultimate capitalist endeavor.  Whether your chosen route is as a real estate agent, a long-term real estate investor or a short-term speculator, deciding to make a living in the realm of real estate takes the guts, the brains and the bravery of a tried and true entrepreneur.  Many of the best and brightest real estate professionals will attest to using the exact same techniques of some of America’s greatest business minds when growing their own businesses.  It doesn’t matter if the business is located in Ames, Iowa or Los Angeles, California, the path to success is the same.  Ask any of these real estate professionals and they will all tell you the same thing…The Best Never Stop Learning! 

My grandfather was an entrepreneur here in Memphis in the 1970′s, 80′s and 90′s.  I watched from afar as he built an incredible business and touched the lives of hundreds of employees.  But he failed to do one thing that most entrepreneurs say is paramount when building a business.  He failed to look around the corners in front of him.  He failed to anticipate what was next.  Now his business remained successful, but he had an opportunity to build something incredible and lost a lot of ground and time to his competition because he could not anticipate what was coming next.

My father on the other hand became an entrepreneur in 1983 when I was 11 years old.  I grew up in a hectic and stressful environment and watched as my father built three separate businesses and each one grew to be more successful than the first.  I was lucky to be able to spend time with both my grandfather and my father and see the subtle differences and apply what I learned to my own companies.  One lesson on education stuck out to me and still impacts my real estate investing business on a weekly basis.  In order to innovate and even anticipate what is coming next and how to stay ahead of the curve, you must always be learning something new.  Anyone can work hard.  People have been doing that for hundreds of years.  But Education is the key to success.  The difference between those working hard and those working smart is the amount of time spent educating and learning their craft.

I am a big believer in self educating and constantly looking for new resources of information.  I love to read about how others have succeeded or the pitfalls they had to overcome along their paths.  I also have a heavy does of humility when it comes to learning from others and have no problem admitting what I don’t know and searching for ways to learn.

Real Estate is just like any business and it takes an open mind and willingness to learn new things if you want to be able to stay ahead of the competition and anticipate the next move.  I am a big advocate of watching webinars, attending presentations, registering for white papers and most importantly reading the latest and best books from a variety of genres.  I watched my father read business books, self help books, coaching books, how-to books and every book purporting to have a secret to learning new fads.  He taught me that reading was a great way to self educate and learn.  I am going to list some of the top books I have read in the last couple of years and regardless of the actual profession you undertake in real estate…these are the titles  you need to read if you want to reach new levels of success in 2012!

Rework – an unbelievably good book that is a short and easy read, but will absolutely blow your mind with the simple suggestions and common sense approach to growing a business and finding additional income streams that are literally laying in front of you.

Strengths Finder 2.0 – Why spend your time trying to improve your weaknesses?  You are who you are and you have special talents that are specific to you.  Is it not a better idea to improve and capitalize on your strengths!  We have a number of leaders in our company and this book was great at pointing out each of our strengths and helping us work on our individual strengths as a team and letting others strengths make up for our personal weaknesses.  Great book!

Lead, Sell or Get Out of the Way – What is the single most important factor today in your growing business.  If you have read some of my other blogs on here you might remember that I am a big fan of KNOWING YOUR CUSTOMERS!  This book is a great tool for a real estate entrepreneur because it reminds us that the customer is the reason we are in business and our customers want us to lead them to what they want – not sell them what we have.

Building Wealth One House at a Time – If you are looking for a good jumping off point, a good book to get you started with some simple concepts and action oriented thinking, then this book is a good one.  John W. Schaub is a well respected real estate educator and although I have never attended a seminar of his, I found his book to be easy to understand and a really good resource.

Make It Big – Frank McKinney is the definition of real estate entrepreneur!  This book is one that I read every single year and can pick up at any time and turn to a section of the book to find inspiration and focus.  Even though it has an outlandish title, it helps ground me and bring me back to what is important as I try to balance life and business.

Crush It – If you know what you are good at and are ready to tell the world, this book needs to be next on your list!  This book is all about cashing in on your passion and establishing yourself as the expert in your field.

The Go Giver – the book says this is a “little story about a powerful business idea”.  I will tell you that it is so much more and can absolutely change the way you approach relationships in your every day life.  The title says it all – this book is all about giving before you receive.

The Alchemist – I saved this book for last because it is the one that truly has meaning for me beyond simply being a great book.  It is not a business book per se, but it has taught me a lot about how to face each day in the business world.  I will simply tell you that this book was a life changer for me.  I read it in one night and re-read it 3 more times over the next few weeks as I began to focus my mind everyday on my ambitions.  This book taught me that sometimes the greatest treasure is the journey…

If you were expecting a long list of real estate titles, I hope I did not disappoint with the above list.  Often times, it is the books we least expect to have a huge impact that effect us the most.  Several of the books on my favorites list deal with the psychology of how we treat people and how we approach relationships such as clients, partners, employees and prospects.  The better I understand how to deal with everyday relationships, the better I am able to influence those relationships to help grow my business.  I constantly seek to grow and educate myself and I can assure you that if you do the same, your path to success as a real estate entrepreneur will be shorter, faster and have far greater meaning as you travel!

This Article is Copyright © 2004-2011 BiggerPockets, Inc. All Rights Reserved.

Continuing Your Education is Key for Real Estate Entrepreneurial Success

LAST WEEK, I had a chance to get to know Rob Grant, one of the biggest real estate domain owners in the world, some of his names include NewYorkrealestate.com, BeverlyHillsrealestate.com, and many more. His recent sale, ParkCityrealestate.com (Utah), was sold for a cool $60,000.  What’s interesting to me is he started in “offline” real estate before he stumbled in investing in web domains in 1995.

His background is as interesting as the man himself; tired with the East Coast culture, he walked away from a promising advertising career in New York city and moved to the Adirondacks Mountain, “We rented a house up there but didn’t have a clue what we were going to do! It was a very scary time,” Grant said.

Seeing an opportunity to market the charming, but unknown Adirondacks furniture nationally, he set up a furniture company.  He began to make strides in the design trade and gained strong acceptance in the high-end market.  The big problem was he couldn’t find enough qualified reliable craftsman to produce enough pieces to meet the demand. “If it was deer season most of my workers simply disappeared!”

Seeing an opportunity with local undervalued properties in Saranac Lake and Lake Placid he began to invest in real estate, buying an old commercial 3-story building for $20,000, refurbishing it then later flipping:

“We happened to get lucky because we hit that market just as the Adirondacks were starting to be rediscovered,” Grant said.  I found I was able to sell the residential properties for two and three times what I paid for them. That kind of ushered in my real estate era.”

By 1991, armed with a string of successful real estate investments, he started a real estate brokerage firm. But the timing couldn’t have been worst, right smack in the middle of one of the worst recessions since 1950, (dwarfed only by the current Great Recession). But he managed to hold on.  Saving enough money to diversify to geo-targeted real estate domains.

And the rest as they say, is history.

I share Rob’s story because frankly, I’m tired of the face of the Donald Trump types on T.V,  the rock star like status (and lifestyle) of investor “brands” on cable.  It’s as if we need to party at the Palms every year to really be considered a success.  But the opposite is true, most of the wealthiest investors are quiet rebels, independent thinkers who are the millionaire next door.

They reward themselves with the good things in life, but only after 10-20 years of saving, investing and working hard — Delayed gratification.

I also learned from Rob’s story that a varied background can actually help, not ruin one’s chances for success.  The more varied your background: teacher, dishwasher, venture capitalist, farmer, plumber, radio personality, etc., in so many ways, the better, because it gives you a deeper insight on human nature.  And that, my friend is one of the great marks of successful investors.

This Article is Copyright © 2004-2011 BiggerPockets, Inc. All Rights Reserved.

The DNA of a Real Estate Trail Blazer: Introducing Rob Grant

Having a mission is important. To run a successful business, you need to be on a mission. Yet many of us small business owners (particularly real estate investors and professionals) skip writing a mission statement. Companies put their mission statement on the wall, not because it’s cheesy but because it’s important. Actually, many company mission statements are cheesy, but having a good one is a good idea. Think of it as your foundation.

Building a successful business requires a strong foundation, especially today. Opportunities come around every day. Do you take this new client? Should you join this new social network? Should you take your company in this direction or that? If you refer back to your mission statement, you ought to be able to answer questions like this pretty swiftly and with certainty.

If you don’t have a mission, then you don’t have any objective means of maintaining any consistency. And if you have employees, managers or anyone who makes decisions on your behalf, then you definitely don’t have any way of keeping a cohesive brand together. Not without a mission.

What is your mission?

Writing a mission statement may sound pretty simple, so it’s easy to overlook how important it is. But sit down to write one. It’s more difficult than you might expect. It’s one thing to be able to write posts to your blog on a regular basis, build your friends list on Facebook, etc…the day to day stuff of building your presence online. But what exactly is it you’re building? Have you thought to consider it?

A tweet came through my feed on Twitter this past week. I think it was from Chris Brogan or someone like that. It’s buried now, and I can’t find it, but it was basically something like “describe your brand, what you do, what you’re about in 140 characters or less. Can you do it?” This is a mission statement.

• What are you about?
• What are you building?
• What drives you?
• Why are you doing it?

Answering these grandiose questions in a line or two is difficult, but that’s why it’s important.

Why You Need a Mission

You need a mission for one reason…NOT having a mission means you’re drifting. From a business perspective, you’re a ship out to sea without a sail. Without a mission, you have no brand. Not really. At best, your brand is an accident. You need something as a foundation.

Notice that my assertion here is that a mission simply gives you a sail. It’s essential, but your mission statement is not going to be what differentiates you or makes you the best at what you do. It’s simply a building block. No one is going to do business with you solely because of your mission statement. But it needs to be there.

It’s important to have a mission, but it doesn’t matter what mission you choose!

All that matters is that your mission speaks to you. On a fundamental level. It needs to excite you, but it also needs to do more than that. It needs to drive you. It’s beyond excitement; it needs to be primal. It can be pretty, but you have to mean it!

An Example of a Bad Mission Statement

To satisfy our customers’ desires for personal entertainment and information through total customer satisfaction

I found this on Seth Godin’s blog and I agree 100%. What the hell does this even mean? Ha.

Is it wrong of me to assume that this doesn’t really speak to someone’s heart? Is some manager somewhere really busting ass to make this happen every day as if his life depended on it? Seriously, I doubt it. This is an example of a mission statement with nothing behind it. Ironically, (although I can’t verify this) it also probably cost the company thousands of dollars for some troll to produce it. Someone who has no ownership interest in the company. Bad move.

Do you run your company? Don’t outsource the writing of your mission statement…it completely defeats the purpose.

An Example of a Rocking Mission Statement

Google’s mission is to organize the world’s information and make it universally accessible and useful.

Just my opinion…this mission is engaging and exciting. Also, it doesn’t ramble on with useless corporate-speak and unnecessary verbiage. It’s clear and ambitious. To me, this is a mission. It’s frickin huge, and that makes it all the more appealing, but it’s also very targeted. You could stay busy for a while with a mission like that…

It’s not about the mission statement itself. The process of writing your mission statement is almost more important than the actual mission statement you produce. The fact that you can refer back to it is invaluable, but the process of coming up with your mission statement should be a soul searching experience. It should take you a minute, you know? Think about it, write it. Live by it. It should be something more than exciting to you. You should love it. After all, you’re going to be working day and night to make it happen. Make it a good one.

Do you have a mission statement? Do you agree or disagree that it’s vital to have one?

This Article is Copyright © 2004-2011 BiggerPockets, Inc. All Rights Reserved.

Why You Need A Rocking Mission Statement

If something takes 5 minutes a day, but saves countless hours and drastically improves your success would you do it?  100% of you are saying yes right now . . . now I want you to commit one whole year to doing this before you have the chance to back out.  You will be amazed by the results and you will continue to do it for the rest of your life.

Studies from an Ivy league school’s graduates have shown that there is a direct correlation between the highest earners and doing this one simple thing daily.  It can actually apply to just about every part of your life whether it is family, relationships, career/financial, health, hobbies, etc.  You will be amazed by the results and what you can achieve.

Write Down and Track Your Goals

The one thing I recommend to everyone is to write down your goals every day.  I cannot stress enough how much of a positive impact it will have on your life.  Challenges are no longer stressful, they become a goal and just something you work towards everyday in your life. 

Here is a bit more detail.

1. Write down your goals everyday
2. Write what it will take to achieve them
3. Begin completing these tasks
4. Start over at 1 everyday

Do this everyday and you will be amazed how productive, efficient and effective you become.  Whether it is career, real estate, and financial goals; family and relationship goals; or fitness and hobby goals, you will become organized and unstoppable if you truly commit.

Photo Credit: dcysurfer

This Article is Copyright © 2004-2011 BiggerPockets, Inc. All Rights Reserved.

How to Acheive Your Personal and Business Goals in Five Minutes a Day

Image by said&done via Flickr

Real Estate marketing is a science, not an art. One of the greatest books you could ever read for Real Estate marketing, whether it be by marketing articles and tools for your website, is called “How to Master the Art of Selling” by Tom Hopkins. The book is fantastic for Real Estate professionals who are looking to win more referrals and leads while at the same time baking the cash every single month.

Before I go into this simple, yet very effective technique, I should clarify that this is not some kind of a mind control technique or anything like that.  The way I see it, it’s 100% ethical and it is being used by someone every hour of every day.  Also, I hope that by reading this post, you’ll see the power of it and apply it not only in your business but in your personal life.  I know that this is a very popular blog and what I say here will be seen by a lot of people.  In the end, this strategy can benefit both parties involved.  So, let’s get going here.

For your 2009 marketing proposals and pitches, instead of trying to push a product or service, in this case a home, start your salesmanship by listening and opening yourself with questions when a customer comes to you for advice. Whether you are an investor, realtor or a broker, you should remind yourself that the average sales person would talk more than he would listen and because of it less amount of communication will be from both parties.

Instead, try asking questions and eagerly listening with your body language pointing obvious enthusiasm to your potential buyer or future prospect. If you come to think of it, Tom Hopkins would agree that this is a champion salesmanship process. You listen and gather rapport. You establish communication and involve the client by establishing genuine interest. Not by trying to push a sale or manipulate the brain for what already is one of the most emotional purchases for most people.

Among the most important sales skills you begin to process is a plan to clear potential objections based on what the customer really wants once he asks more questions.  Not only do you win by passing the potential buyer of a home into a selling process, but if you take the time to learn about the client’s interests, you win through adjusting your salesmanship and abilities whether you ultimately win or lose the sale.

So, next time you get a possible buyer or seller on the phone or see them in their house, be quiet and listen to what they have to say.  Remember, silence is extremely powerful.  Train yourself to be quiet and let the other party talk.  Most people are very uncomfortable when there is silence and they’ll just start talking.  Now, I know this isn’t an easy task.  Believe me, I’m still working on it.  My wife is an amazing woman and she reminds me of it once in a while

But the simple fact is that when you let other people talk, you BOTH end up in a better position if you were to be the one talking and not listening.  Even worse, talking over each other.

So, do you want to find out your buyer’s real problems? Do you want to know how you can help them?  Then BE QUIET!  Try it and then come back here and let me know by commenting on the post below.

To Your Success…

This Article is Copyright © 2004-2011 BiggerPockets, Inc. All Rights Reserved.

How To Find Out Your Buyer’s or Seller’s Biggest Problems Every Time

Today I am going to share something with you that can literally change your life.  This little technique will give you the power to master your own business and your own life.  You need to master this technique if you want  to be successful in life.  What am I talking about here?  I’m talking about Effective Time Management.  Without it, you’re just spinning your wheels and get nothing done.  Without it, you’ll look back at your own day and say:  “What happen?  Where did the day go? I didn’t get anything done!”

If you look on the internet and type in time management in Google, there are thousands of different ways to manage your time.  I will show you one technique that I use in my own life and my own business.  You can use that technique or you can use something else but this technique has proved to be most effective for me.

First of all, I have to give credit where it’s due.  I learned this from Alex Mondossian, an internet marketer and an old school copywriter whose been famous for a long time—his name was Eugene Schwartz.  By the way, if you want to learn effective copywriting, Eugene Schwartz books and swipe files are amazing.  So check them out.

Here’s the simple time management technique:

Step 1 – Create your master to do list.  Your master to do list is going to have to have all of the items you have to finish the next day.  You can use a notebook or 5″x7″ index cards.  So, if you are writing your master to do list on Sunday, you are focusing on your to-do list for Monday.  Don’t write more than 20 items though.  When you complete an item, cross it out with a RED pen.  Believe me, it works.  It’s a psychological thing.  One tip I learned is to do couple of fun items first. Not only does it get you going but it gets you excited about your list and your day.

Step 2 – You are going to blackout your daily prime time hours.  Now you may be a morning person or night person.  I am a night person and tend to sleep in the morning, so my prime time hours are late afternoon (after I get up) or later at night because everyone is away and I can focus on what I am doing.  I would suggest that you should keep your prime time hours between 1-4 hours.  These prime time hours are going to be your focus hours on items that are critical to your business and your profits.  Focus on those items and avoid interruptions.  Turn off your phone, close your office door and whatever else interrupts you during the day.

Step 3 – You are going to use a countdown timer during your prime time hours.  It can be any kind of timer as long as it counts down.  You will set your prime time hours to 50 or 55 minutes. Mr. Schwartz was teaching about 3 minutes and 33 seconds or 33 minutes and 33 seconds.  He would set his clock for that amount of time. Play around with the time and see which one works better for you.  At first, you might start with 33 minutes and 33 seconds because you might not be used to focusing for so long.  Then, as you get better, you can ramp it up to 55 minutes. So, you turn the timer on and start working.

Let’s say you want to write an article for marketing purposes but you have no clue as to what to write about. Turn on the timer that you set for 33 or 55 minutes and sit there in front of that paper.  If you can’t think of anything that is fine just start writing crazy stuff down and sooner or later something will come to you.  Here is a critical point you need to remember, after your time expires and your timer beeps you need to stop.  Step away from the desk put your pen down and go do something for about 5 or 10 minutes.  It doesn’t matter if you are in a middle of something or that you have finally started writing.  You need to do this step.  It’s extremely critical you do.  Here’s where the magic happens.  Your mind will start working on what you have been doing and will start creating ideas for you.  You can be getting a drink or walking around your office.  It doesn’t matter, your mind will do it’s job.

That’s it.  Just rinse and repeat.  After a while, you’ll be amazed how much work you’ll get done and how effective you’ll become.  Believe me, I’ve seen this technique work and it is amazing.  So go out there and start doing it, today!

One last thing, let me know in the comments below about your thoughts on this.  Have you used this technique?  What do you think about it?  Maybe you have some really good tips you can share with others on this blog.  Thanks again and I’ll talk to you soon.

To Your Success,

Peter Kolat

This Article is Copyright © 2004-2011 BiggerPockets, Inc. All Rights Reserved.

How To Master Your Time Before The Time Masters You

When people first decide to buy an apartment building it is common for them to make a few easily preventable mistakes. The most common error that I see new investors make is not having what I like to refer to as the “investor tool chest”.

For example, if you wanted to build a house you would need a few things to get started. You would need first to have a blue print for the home drawn up by an architect. Second, you would need to have the proper tools to actually complete the building, You would need the nails, hammers, saws and drills to work on the raw materials. Thankfully, investing in apartment buildings doesn’t require any physical tools or skills. However, investing in apartment building does require the same kind of mental planning and in this case your “tool chest” is actually a “tool chest” of knowledge.

To Be a Successful Apartment Investor, You Must Have a Plan!

The best way to acquire these essential educational tools is to read many books and magazines on the subject. The first and most important tool that an investor can have is the ability to determine the investment value of apartment building. There is no way that an investor can be sure that he or she will be buying a cash cow or a money pit without the necessary ability to analyze the value of a building. There is an endless array of information available about debt coverage ratios, cap rates and real estate evaluation. In my opinion the first time commercial real estate investor should operate with one simple mental “tool” or presumption and that is to determine what the building is worth to him or her and to ignore almost everything else. What this means is that investor should virtually ignore what prices other similar properties have recently sold for in the area. Instead, the investor should figure out the price that will allow him or her to buy the property and make the profit and cash flow that will make it a good investment.

In order the figure out what price you should pay for an apartment building, assuming for example that you want to realize a certain return, or Cap Rate on your investment annually, simply use the following formula:

Net Operating Income
__________________ = Price You Can Pay to Realize a Desired Cap Rate
Capitalization Rate

Photo Credit: jthetzel

This Article is Copyright © 2004-2011 BiggerPockets, Inc. All Rights Reserved.

Buy an Apartment Building With a Tool Chest of Knowledge

With the US Dollar falling and rising inflation many individual investors are looking for alternative methods to preserve and grow their capital. Apartment buildings are starting to receive a lot of interest from many investors who have little or no experience in the world of commercial real estate. Investors are now attracted to apartment building investments because of their relative security, positive cash flow and growth potential. These new investors are hungry to learn how to buy an apartment building. However, the first time buyer should do his necessary homework before actually investing his hard earned money in a multifamily property.

The last thing a new investor should do is to buy the first apartment building deal that comes across his table. In fact, in my role as a commercial property finance consultant, as soon as I hear that the investor I am speaking with has never bought or managed a multifamily building previously AND that this is the first deal that he or she has ever looked it, then I know immediately that it is a deal that will never get done. I don’t even have to look at the rent rolls or the income and expense statements. To many readers this may sound cynical or brash but it is simply the truth. And it has nothing to do with the intelligence of the investor it just simply has to do with the fact that banks will not lend money on an apartment building that is not or will not soon become profitable.

Many beginner commercial real estate buyers are under the assumption that they will somehow be able to convince their commercial mortgage broker and the commercial mortgage bank underwriters the property is such a great deal at the purchase price because there is a new mall scheduled to be opened down the street or that the neighborhood is undergoing revitalization or because a big employer is moving into the city. All of this may be true but a bank will not generally lend money on an apartment building unless it is already profitable and the bank will usually want to see at least a 20% down payment. And I don’t blame beginning investors for believing what they do. Many real estate agents and property owners will say just about anything to get a building sold. The job of the real estate agent and the property owner is to get the property sold for the most amount of money that the market will bear.

The first time apartment building buyer needs to be aware of the fact that the real estate agent selling the multifamily building represents the seller’s best interest and not his or hers. For this reason it is imperative for the first time investor to have as much education and knowledge going into the deal as possible. The first skill the buyer must have to separate the junk deals from the deals that will be profitable, cash flowing apartment buildings. He or she should begin by taking all or some of the steps below:

• Get a book education first. Learn about the industry and terminology by reading many commercial real estate investment books Stay away from the books that over promise and under deliver. It if seems to easy to be true then you know that it is.
• Develop your analytical skills. You need to be concentrating on Debt Service Coverage Ratios, CAP rates and Internal Rates of Return. You don’t want to be thinking emotionally about the investment. This does not mean that you should eschew creative financing and acquisition strategies. It just means that these strategies and methods should be firmly based and tested in the real world.

• Network and forge relationships with commercial real estate professionals and investors. Every major metropolitan area has at least one very active real estate investment club.

• Build a “master mind” team of advisers that will help you evaluate your investment decisions. This team could include attorneys, accountants, appraisers, realtors, mortgage brokers, business men and other entrepreneurs.

This Article is Copyright © 2004-2011 BiggerPockets, Inc. All Rights Reserved.

How to Buy an Apartment Building

Buy an Apartment Building Today?

In today’s turbulent financial markets many investors are looking for ways to grow their money that will offer a steady flow of predictable income and limited market risk. More and more people are buying apartment buildings to help diffuse the effects of inflation on their portfolios. Apartment buildings offer many exceptional advantages over traditional investments such as stocks, bonds and mutual funds. This is especially true in a recessionary market environment. In fact there are many attractive attributes of an apartment building investment that many investors who are new to commercial real estate may not even know about. There are some interesting facts about buy multi-family property investing that could radically change your perception about this fascinating and lucrative part of the investment world and inspire you to go out and buy an apartment building of your own.

Warren Buffet once said that “wide diversification is only required when investors do not understand what they are doing.” This quote seems especially true about the average investor in the United States who is listening to the advice of a financial adviser who in reality knows little more about the markets then himself. Usually financial advisers will recommend that a client be well diversified in investments ranging from stocks, bonds, mutual funds or maybe even a real estate investment trust. The adviser is putting his or her client into a group of “diversified” investments that were recommended by the firm’s top adviser and the research department. Unfortunately, however, for the individual investor is the fact that these investments are basically designed to preserve the firm’s capital under management and they don’t take into great regard the individual investor’s need to grow his capital.

The most successful investors and those that see the greatest returns are those that specialize in a particular sector. And the timing has never been better to begin specializing in apartment building investing for the average investor. The stock market is under intense earnings and inflation pressure. Investors need to look at a direct investment in an income producing apartment building to establish a profitable stream of cash flow that could last for decades to come. Many thousands of individual investors have been able to secure their financial futures by specializing in this unique niche and leaving behind the mediocrity of financial advisers and stock pickers.

If there has ever truly been a recession proof business it has to be apartment building investing. Even with the US economy is turmoil and business cutbacks people will always need a place to live. The actual demand for rental units in the US has never been higher then today. A total of 36 million of all households in the US are renter occupied. In total, a full 83% of all households under age 25 in the US are occupied by renters. Furthermore, a full 55% of all households between 25 and 35 are renters. The growing senior segment of society will be living longer and looking for rental properties as well. These are a few impressive statistics that demonstrate the strong current and projected demand for rental housing.

This Article is Copyright © 2004-2011 BiggerPockets, Inc. All Rights Reserved.

Buy an Apartment Building Today?

We have all heard the classic saying: It’s not what you know, but who you know. It’s true in life, it’s true in business and it’s certainly true in real estate. The people you know and the connections that you make have a profound impact on all aspects of your life. This was something that I discovered fairly early in my business career.

When I started in the financial services industry as a stockbroker I spent the majority of my time dialing for dollars. I spent countless hours calling people I didn’t know in the hope that they might be willing to have a conversation with me, let alone become a client. I was sure, or at least I hoped, that there had to be a better way. I asked successful veterans for tips on building a business and what they had done to achieve the degree of success that they had.

Two answers were constantly thrown back at me: networking and referrals. I was told to join the Chamber of Commerce and other business groups in order to build relationships that would lead to a steady stream of referrals. I was also warned that there is no instant gratification, relationships take time to develop. It is important to remember that it is called net-work-ing because you have to work at it.

Stage One

The first step in networking is to get out there. Have plenty of business cards and develop a 30-second commercial that clearly explains what you do. You need to develop your listening skills, you have two ears and one mouth – use them in that proportion. It is easy to spot the novices at networking events, they’re the ones running around trying to sell their product or service to anyone with a pulse. They usually go home empty handed.

At this stage you should be focusing on building relationships. Ask people what they do or what they need, then shut up and listen. In his book, The 7 Habits of Highly Effective People, Stephen Covey calls the 5^th habit: “Seek first to understand, then to be understood.” If you understand what other people want and help them get it, you will wind up getting what you want as well.

Stage Two

By now you’ve met a bunch of people and collected a lot of business cards. What do you do with them? This is where the real work begins. Many people do all of the stage one activities and stop there. They’ll say that networking is useless or ineffective, for them it is. Many people you meet will be nothing more than contacts, you’ll wind up seeing them at other events but rarely will you go beyond a casual greeting. That’s to be expected and there is nothing wrong with that.

However, you will also meet people that you are truly able to connect with. Perhaps your life objectives are similar or your businesses overlap in some way. These are the relationships that you need to nurture. Grab a cup of coffee or share a meal and get to know this person. Focus more on developing the relationship than on any one transaction. People tend to do business with people that they like.

Stage Three

In stage three you have reached the point where people come to you. When you strive to help other people they will work to return the favor in kind. You become known as someone who is well connected and is a good source of information. This does not happen overnight, but it is well worth the effort.

In real estate you need to clearly define your goals and clarify your message. Go to real estate investment clubs and become known to others. Don’t ignore other groups just because they are not real estate related. If you are looking to buy distressed properties or pre-foreclosures, you can find leads just about anywhere. You may find that you are the only real estate investor in attendance and that certainly gives you an edge.

I have built several businesses over the years using the power of networking. It is an incredible tool when you learn how to use it.

One secret of success in life is for a man to be ready for his opportunity when it comes.
Benjamin Disraeli

This Article is Copyright © 2004-2011 BiggerPockets, Inc. All Rights Reserved.

The Power of Networking