If you're new to real estate investing, you probably haven't
figured it out yet. But you will. It's inevitable. Stick around
long enough and you'll discover that successful real estate
investors have their own lingo. Yes. Their own language. And if
you ever talk to these investors, most of them will quickly
resort to certain "F" words to explain their success.
Let me share just a few of these "F" words.
Focus
The all-important concept that keeps you on a clear, purposeful,
directed path is focus. We are all focusing on something at
every moment. For example, right now you are focusing on this
article. How often are we focusing on the wrong thing? The key
is to be focusing on the right thing. If you carry a lighted
flashlight that is focused up instead of down at your feet, what
would be the odds that you would trip in the dark? The odds, I
say, would be fairly good. The flashlight is pointing at
something; it just might not be pointing at the right thing.
For example, successful real estate rehabbers focus on the
process - the rehab process - not the product. The product is a
natural outcome of doing the rehab process well. Real estate
achievers focus on implementing a duplicatable process to keep
their rehab business growing. Non-achievers lack focus and
haphazardly rehab the home. If the rehabbed house turns out all
right, they credit their lucky stars. If the house is a dud,
well, their lucky stars were not aligned just right.
Focus is the act of actually doing those actions that lead to
the desired outcomes that you have chosen for yourself. Focus on
the right things and you will get the right results.
Fix and Flip
If you are just getting into real estate, fixing and flipping
properties is one of the best ways to realize substantial
profits without using your own money. You start by searching for
motivated sellers with junkers. In other words, find people
desperate to sell their house that is in bad condition. Once you
acquire the house, you fix it and quickly add value through a
systematic rehab process. Then you resell the house quickly for
a profit.
Let's suppose you stumble on a property suffering from neglect
by its prior owners. You sense that there is a lot of money to
be made because you can buy the property well below its market
value, make the necessary repairs, and then sell the property.
To successfully implement a 'fix and flip' strategy, you don't
need perfect credit, but you must have access to some cash.
Preparing a real estate business plan to present to prospective
lenders will vastly improve your chances of getting all the
money you need to purchase the property including the repairs.
You can use the real estate business plan to provide your
potential money lenders with your approach to your rehabbing
business. You need to assure them that they'll have a first
mortgage on the property that will be secured by the property
itself. Most importantly, your lenders need to know that that
you'll only purchase deals that are 20 to 30 percent below their
after repair value.
After you purchase the property, the average turnaround on a
'fix and flip' property is approximately 90 to 120 days from the
date you purchase the property to the date you cash out on the
property. This timeframe is based on 30 days to fix it up, 30 to
45 days to sell it on the market, and usually 30 to 45 days to
close. This process can be done faster, of course, under the
right circumstances. However, the process can also take longer
if you don't get the property up to market standards and in
selling condition in this time frame.
How many houses do you want to do? How much money do you want
to make? Even on a part-time basis, doing a 'fix and flip'
several times a year can generate a nice second income. Yes. A
second income that can quickly surpass your full time income.
Financial Freedom
Real estate is one of the best and easiest ways to create
wealth. More millionaires have made their fortunes in real
estate than anything else! Here is what some of the wealthiest
Americans have said: · "Real estate is the basis for all
wealth." - Theodore Roosevelt · "Buying real estate is the best,
safest way to become wealthy." - Marshall Fields · "90% of all
millionaires made it through real estate." - Andrew Carnegie
Generally, most individuals that are looking for ways to get
ahead financially give some serious thought to real estate
investing. And many take the plunge. But why do so many that
take the real estate investing plunge fall short of their
financial goals?
Well, there are plenty of reasons to go around, but the
principal reason centers around unrealistic expectations.
Many new investors are unwilling to pay the price. All
worthwhile endeavors require some sustained and focused effort.
In other words, some real work.
But many of us are searching for the magic key that will open
the "real estate treasure chest" to instant wealth. Is it
possible this magic key exists? Honestly, I think I have a
better chance of getting my face carved on Mount Rushmore than
you have of truly finding that magic key just lying around
somewhere.
By now you know that success comes before work only in the
dictionary. Sure, it's a cliché, but it's also a profound truth.
There are other "F" words that permeate the vocabularies of
successful real estate investors. But if you will make focus,
fix and flip, and financial freedom a part of your vocabulary,
you will be on your way to reaching your financial goals.
I should know. Seldom a day goes by that I don't use one or all
of these "F" words in my business.
About the author:
Lee Salinas is a full time real estate investor. After losing
his mid management job in June 2002, Lee decided to become a
real estate investor. In three years, he has purchased over 140
properties and authored a business plan for real estate
investors. The real estate business plan is available at his
website - http://www.realestatebizplan.com
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