Earn While You Learn

Investing in real estate is one of the most powerful ways to earn money while you learn how to make more money.  When you consider the cost of higher education today and then factor in the chances of gainful employment once you’ve completed that $40,000+ education the amount needed to get into real estate investing begins to look pretty sweet.  Our current success story, Matt A. saw the opportunity and jumped on it.  His journey was not all roses.  I asked Matt what he came up against and what he learned from the bumps in his investing road.

"In addition to what you can get out of books like Your Castle Real Estate’s “Investor’s Guide” & Gary Keller’s “Millionaire RE Investor”, I’ve learned several things that don’t come in the books.  How to listen to my gut, who I need on my team and when to listen to them, the importance of controlling fix-up costs & remaining flexible, and the one that saved my butt - having multiple exit strategies.

“The first several months were about learning how to look at property – first on paper and then while walking through the houses.  Looking at property on paper can be deceiving.  The pictures often times make the homes look really nice.  But then we’d get to the house and realize it was a total shambles.  Pictures can lie.  You had told me I’d need to look at 100 homes on paper & then go see 10 to write one offer.  It’s tricky because there are so many variables.   But after seeing several dozen properties those variables became less intimidating & more familiar.

"The biggie is location.  But I found that even in the less desirable areas there can be pockets that are great.  With my first three deals we were in three different areas: North Aurora, Montebello & South Denver.  Each area had its own set of influencing factors.  Now I know that it’s important (at least in my case) to choose an area and learn all I can about it: avg. price point, quality of schools, acceptable level of fix-up.  And perhaps the most important – do the inspections before you close!”

Ah Yes, I remember.  Would you like to share that story?

“Sure.  We’d just closed on the 3^rd flip and one of those “too good to pass up” deals came to our attention.  It was back in the east Denver/north Aurora area that I really liked, a 2 bed/1 bath for $70K.  I knew the area was running low on properties under $100K and we’d had some down time between a couple of the earlier deals which I didn’t want to do again.  Having my money sit in the bank wasn’t getting me any closer to my goal.  If we wanted the house we needed to close in 48 hours to save the house from its foreclosure sale.  So I jumped on it.  The comps were showing resale in the $140K range.  That’s $70K in wiggle room – how could I loose, right?

“So we closed Tennyson on a Tuesday & bought Willow on Thursday.  Then we did the sewer scope.  (insert the sounds of fate here- “dun, dun, dun, dun” in a descending scale)  And of course it was trashed so I had to replace it to the tune of $5000.  Then we decided it really needed a garage - $11,000.  By the time we got it fixed & back on the market it was mere days before the tax credit expired and I had little room to reduce the price and still make some money on the deal. 

"We had the house on the market for 6 months with very few showings when you and other investors I know started talking about keeping the place as a rental, re-financing to pull out equity and picking up a couple of other rental properties.  This was the “remain flexible & multiple exit strategies” lessons in practice and it lead to my best buy to date."

We’ll save that story for the next Success Stories installment.  In the meantime, if you’d like a FREE copy of the Your Castle Real Estate “Investor Guide” give me a call – 303-726-1051 or shoot me an email at ludmilla303@msn.com

Finding the Right Real Estate Agent for Investing

Building Your Real Estate Investing Team

“Where no counsel is, the people fall; but in the multitude of counselors there is safety.”
                        -- Proverbs, 11:14

“The important thing to recognize is that it takes a team, and the team ought to get credit for the wins and the losses. Successes have many fathers, failures have none.”
                       -- Philip Caldwell

The most successful people always have a great team helping them.  You’ll need to find a Mortgage Broker, Real Estate Agent, Inspector, Appraiser, Insurance Broker, Contractor and CPA.  You may also need the support of an Attorney and a Property Manager.  Today my focus is on finding the right real estate agent.

To begin, the two most important members of your team will be your mortgage broker and your real estate agent.  Outstanding residential mortgage brokers and real estate agents rarely achieve even modest success with investors.  Insist on full-time professionals that specialize in working with investors so you can maximize your track record of success.

Interview and Check References when searching for a real estate agent

Bear in mind that the perfect agent with A+ answers on every question likely does not exist, and if they do, they will be so busy that they might not have time for more clients. Be willing to compromise. It’s rare that you can find the 100% perfect agent.  The search and thought process for investments should be highly numbers-driven - residential agents are mainly focused on the emotional appeal of a home and how well it fits their client's lifestyle.

Here are some sample questions:
  - Are you a Full Time Real Estate Agent or do you do other things? If so, what else do you do?
  - How many transactions did you complete in the last twelve months?
  - Tell me about the mix of clients – what types of clients did you work with and what sorts of deals did you do?
  - Do you work on a team? If you are sick or on vacation, who will be helping me?
  - What happens if I’m not satisfied? Can I get out of the contract? How long is the contract?
  - Describe the investment you are considering. What properties do you suggest I consider? What have you seen other investors like me do? What specific returns did they achieve?
  - How would we work together? What is your “Process”?
  - Could I get some references of two or three investors you have recently assisted?
Call them up and ask them …
     • How comfortable they were working with the agent?
     • How knowledgeable did seem?
     • How responsive they were in answering questions and returning phone calls?
     • What did not work for you in the relationship?

I encourage you to interview a few real estate agents before making a final decision to sign a buyer’s agency contract.  Make sure you have a clause to cancel if you are not satisfied.  Commit to working with one agent after your due diligence period so they will bring you the best deals.  Non-committal buyers only see left-over deals after preferred clients have picked over them.

If you are thinking about investing in real estate I recommend “The 2011 Guide To Colorado Real Estate Investing” by Lon Welsh. For your FREE copy give me a call (303-726-1051).

Musician investor turns $23K into $150K!

And $1330 in monthly passive income in just 3 short years.

I first met Matt 3 years ago in one of our favorite watering holes, Herb’s at 22nd & Larimer. At the time he was drumming in a band, and he & his wife were expecting their first child. He shared his goal of wanting to invest in real estate. Since then Matt has done 9 deals and now owns 4 homes with over $15O,000 in equity and monthly cash flow of $1330 over & above expenses. Over the next few days I’m going to be sharing Matt’s success story of how he went from that modest start to increasing his holdings by more than six fold and creating a revenue stream that allows him greater freedom with his music, more quality time with his family and an improved vision of what is possible for his financial future.

Matt begins his story by sharing, “There was a kind of ‘perfect storm’ of happenings that lit a fire under me to do something. I looked at the other guys in the band and realized that, though they were older than me & had been making a living with their music, not one of them had any financial security. With our first child on the way I knew if my story was going to be different I had to do something. Back in college I saw a late-night commercial with Carlton Sheets - you know the no money-down real estate investing stuff? So the real estate bug had been swimming around in my head since then. And when I met you & Thriving Artist Alliance. I knew it was time to take the leap toward creating a better financial future for my family.

“I had read Robert Kiyosaki’s “Rich Dad Poor Dad” so I knew the difference between being “broke” & being “poor”. Poor is a mindset that is difficult to change. Broke just means you don’t have any money. That you CAN change.

“My wife & I had managed to save $23,000 so that’s what we started with. The original plan was to do fix-n-flips to build up enough cash to buy a rental property outright and then repeat the cycle again & again fining & flipping, until we’d built a portfolio of 10 rental properties that would cash flow $300/mo each giving us $3000/mo in passive income.”

Having been with Matt every step of the way I can tell you his journey wasn’t perfectly smooth. He faced more than his fair share of challenges & unexpected obstacles. What has made Matt successful, as a real estate investor, is his steadfast commitment to his long-term goal and his willingness to learn from his mistakes.

Intrigued or want more information? Give me a call: 303-726-1051

Stay tuned for more of Matt's story in the coming days.

The New Wealth

Last night I watched a Tony Robbins’ interview with Eben Pagan, Internet marketing wiz kid. I say "kid" because he's only 38 and yet he's generated millions from internet marketing of his products. His products? He started with a "how to" on dating and is now into business development, how to hire the best employees, mastermind materials and all manner of improvement e-books. The product isn't what caught my attention. What snagged me came at the end of the interview and upon hearing it all that came before slammed into place.

Eben operates from a true abundance mentality. He talks about the 80/20 rule. Traditionally this concept addresses the notion that 80% of one's income comes from 20% of one's activities. Pagan's use is radically different. Having coined the concept of “moving the free-line”, Pagan promotes the idea that by giving away for free the value that I have to offer, I still retain that value and now another person has what I gave them AND I receive more in return. For instance: I have a lit candle, which I use to light your candle. My candle is still lit and now yours is lit AND there is MORE light because 2 candles are burning. Make sense?

So how does this translate into generating Wealth? The trick is to break out of the “scarcity mindset” (there’s a finite amount of money in the world and I’m going to get my share) and re-focusing attention on creating and then providing value. Once you are providing genuine value the money will follow. How do we know what’s of value? Look for a “yes” answer to the following 3 questions:
1) Does what I’m offering alleviate a pain my target client is experiencing?
2) Is my target client actively looking to alleviate that pain?
3) Does my target client have few or zero perceived options for alleviating that pain?
If you get 3 “yes” answers then you have a product that will sell itself.


How do I come up with a product/service that provides real value? Pagan’s answer: “Seek first to understand”. Talk to your client/people in your target market and find out where their pain points are. Dive deep in the conversation with an authentic intention to discover what their needs are. Once you know what they are in search of and cannot find then you insight into what you can create/offer as a product/service.

So what is “The New Wealth” and how is it created? New wealth is money made from a product or service that provides real value and the money is generated by the principal of – when I give it away I still have it and now you have it and I’ve gained from the act of giving. The key: SEEK FIRST TO UNDERSTAND!