Today is my 28th birthday, so Happy Birthday Jason. I’m in a good mood for several reasons. Most importantly, I’m alive and in good health. Also, I get to spend my time these days how I want, where I want, when I want and with whom I want. Lastly, right now is a golden opportunity for me (and you) to make so much money during this financial meltdown (I know that when things turn around I’m going to regret not buying more).

Success is so easy to predict. When I talk to my successful real estate friends they’re thrilled at the money they’re making now and all of the houses they’re scooping up at huge discounts. When I talk to my friends with J-O-B’s they’re whining and complaining that the world is ending (it’s scary how mentally fragile some people are and how the media can sway them). Anyways, not only am I picking up houses now, I’m also getting ready to dump a lot of money into the stock market. If it goes down a little more, what do I care? I’m not touching the money for another 20 years, so I’m fine.

Alright, now to tell you how I can predict your success.

Drum roll please…I can tell how successful you’re going to become by spending a week with you. And, after that week, it would be obvious you’re going to be a success because I would say “look at everything she does, of course she is going to become (or already is) a kick butt real estate investor.” Or, I would say, “no wonder he still hasn’t done a deal yet, he didn’t do a darn thing all week.” It’s that easy. Do you drive for dollars weekly? Do you make sure your letters and postcards get mailed? Do you make dozens of offers on properties? Do you spend time networking on BiggerPockets and at your local REIA’s? Or, do you sit on your butt all week watching five hours of TV every night complaining about your job and the economy?

I think it was real estate tycoon Sam Zell who purchased millions of square feet of office space in Texas during the crash of ’87 (or some time in the 80’s). He knew it would come back up, just like it always does. And, that’s why I’m not only picking up houses but also putting money in the stock market because it’s always your choice whether the glass is half full or half empty.

So, in today’s market prepare to buy and hold for a while. Trying to flip (wholesale) is not smart in this market and many wholesalers are getting killed which is why you need to be a well rounded investor. One last thing…pretend that I’m spending all next week with you. What would you do differently? I sure hope you wouldn’t watch TV and waste my time while I was there (alright, now I’m off to reflect on my 28 years, and what I need to do to become a better person and real estate investor). Oh, by the way, next week I’m going to tell you my favorite website for mailing postcards, the size of the postcards to use, the color to use and the headline of the postcard for getting awesome responses in today’s market!

Photo Credit: soylentgreen23

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Tags: real estate, real estate investing, real estate investor, rehab, success, wholesale

In his landmark book, The 7 Habits of Highly Effective People, Stephen R. Covey calls the second habit: Begin With The End In Mind. Nowhere is that more true than in today’s real estate market. When investing in real estate, the End in Mind is your exit strategy. Unless you just like to wander aimlessly down a highway, you know where your exit is before you get on the interstate. When entering into a real estate investment you also need to know how you plan to exit.

Novice and veteran investors alike tend to get caught up in the excitement of finding a great deal. However a veteran will be more likely to think a deal through. Finding a property with a ton of equity is only good if you have a way to realize that gain.

Possible Exits

There are a number of different ways to dispose of a real estate investment in order to collect your profits.  These may include:

• Wholesale
• Sell/Flip
• Long Term Rental
• Lease Option
• Seller Finance

These are the most common ways of exiting an investment.  Each one has its own advantages and disadvantages. The current market conditions will play a large part in determining which method is best.

 If it was a great deal and you are just looking to make a quick profit, then wholesaling the deal may be your best bet.  If you aren’t in as much of a hurry you may want to rehab and flip the property.  If your goals are to build a large rental income, then you may wish to add the property to your rental portfolio.  If the market is not favoring the seller you might use a creative technique such as lease option or seller financing.  A strategy that works well in one set of market conditions may not be good for another.  You need to know this going in.

Analyzing A Deal

Investors have a myriad of different ways to analyze a deal before making a decision to purchase.  They may look at the cash flow and built in equity as well as any repairs that may be required.  However, one of the most important things to determine is when and how they are going to dispose of the property.  If it is going to be a long-term rental they need to be sure that the income will be sufficient to cover the cost associated with holding the property.  As long as you are making money every month you can sell the property when the market conditions favor the seller.

Looking to flip or wholesale a property requires that you look at the deal differently.  How long does it take to sell a property in the area?  Can you price it low enough to assure a fairly quick sale?  Recent comps may indicate that the property you are evaluating has a lot of equity, but does that mean anything if you can’t find a buyer? 

 Eat Dessert First

You may make the bulk of your profits by buying a property at a great price, but you realize those gains when you sell.  While planning your exit strategy before you buy may seem like starting a meal with dessert, it can prevent you from getting into a bad deal.   

I buy when other people are selling.
J. Paul Getty

 

Tags: exit strategy, flip, landlord, real estate investing, real estate investor, rehab, steven covey, successful people, wholesale