Real Estate Investing Is Right For Your Future

September 19, 2008

You’d be hard-pressed to find a person in America who doesn’t want to become rich. Unfortunately, making one’s fortune requires more than the simple desire to make money – one has to take charge and put in the work necessary to achieve success.

This may sound like an intimidatingly difficult undertaking, but it really isn’t as hard as it sounds. With all of the literature and educational materials on the market for budding real estate investors, there’s no reason you shouldn’t be able to learn the ropes, provided that you put in the necessary hours of study.  In fact, simply reading this article is a great start to the learning process that will ultimately transform you into a successful investor.

With each real estate book or article you read, you come one step closer to having the tools you need to become rich. The most important lessons you’ll learn from your studies, however, aren’t about the minute details of the real estate business – that’s what you hire other people to handle.  The real lesson is that in order to become a successful investor, you’ve got to think like one.

It may sound overly simple, but how are you ever going to become a successful investor if you still have the thought process of a salaried employee?

This may seem quite simple (and it is!), but the investor perspective sets the stage for you to become rich.  From the employee’s perspective, one must do exactly what the boss instructs, and work within the established system to earn their livelihoods.  Those with this mindset always manage to get by, but if you want to do more than just get by you must obviously take a different approach.

If you want more than that- to be rich, for example- you have to start thinking like the people who control the money. Think like the people who work smart, not hard. With a little thought, you can figure out how to make your money work for you.

Now, who are the people who work like that, who actually control the flow of money in our economy? You might be tempted to say “corporations,” and you would be right to an extent. But corporations are not people: They are financial entities. Think about the people behind the entities and you are on the right track.

Businessmen who oversee large corporations, however, aren’t quite at the top of the financial ladder; one rung above, you’ll find the investors.

There’s no question- investors have more control over money than anyone else, and that is simply because instead of viewing money as something you must work to earn, they see it as something that works for them. This concept can  but put into practice by absolutely anyone, so why isn’t everyone able to get rich in this manner?  Well, most people remain “employees,” their entire lives, never learning to look at money in a different light.

All you have to do to become one of the big fish is invest. It’s that simple. Investing in real estate is a good bet because it’s a stable investment. It’s so stable, in fact, that the bank will actually lend you money to purchase it. No kidding.

That’s the long and short of what you will learn if you read every book available to you on how to start thinking rich and stop thinking secure. They will tell you how easy it is. They will tell you to change your thinking. And they will tell you to let the experts deal with the details.

Author and Realtor Alexandria P. Anderson connects people with Real estate investing throughout the U.S. – As an investor herself, Alex shares her Investment Property Tips freely with others. Get a free copy of the investor’s rental guide at GreatInvestmentProperty.com.


A wise real estate investor isn’t afraid to ask questions…

March 10, 2008

Many potential real estate investors will liken buying investment property to playing the lottery. They believe the investment game is all about luck and that makes them take one of two attitudes. These people will either leap into real estate investing without looking , or else they’ll avoid investing completely, seeing it as nothing but a hoax.

Although a certain degree of skepticism is an admirable attribute, it’s no good for someone to be so incredulous they refuse to make a move. Kiyosaki’s Rich Dad book series portrays real estate investing as easy. Too easy, in fact, if you fail to realize those Rich Dad books are only meant to prepare the newcomer to learn about investing on his own . The books themselves aren’t a complete education, but merely a primer.

After finishing just a fewof the Rich Dad books, you will understand the rudiments of real estate, and that anybody can become a prosperous investor. Skeptics who are not so skeptical they believe it’s all a crock, will realize there’s much more work to be done at this juncture.

The wise skeptic (as opposed to the cynic) knows that research plays an important part in the success of an investor. One must understand the way in which one must do that research and what details one must gain from the process, and one must proceed to put that knowledge to a practical use by actually carrying out the research.

Beginning real estate investors ought to study up on the cities in which they can see themselves investing, educating themselves about the pertinent economic factors, whether the area is luring people in or repulsing them, whether new business is entering the area or businesses are closing up shop. Those are just a couple of the things a real estate investor must know about an area in which he plans to buy property, but they are very important.

The true skeptic understands that though he may read that an area is booming, that doesn’t mean no further research is in order. The relevant facts must be verified with several sources. Cities must be visited. Officials of the city must be interviewed. Experts should be interviewed.

A wise skeptic never makes assumptions. Skeptics check things out, as do good investors. They let experts direct them to more experts. They interview politicians and businessmen in the area. They get the relevant authorities to verify their impressions rather than simply giving shining reports on their city.

It’s all about work and questions. The wise investor isn’t afraid to ask questions and lots of them. There is nothing wrong with being a skeptic.


Before You Purchase MN Investment Property

December 13, 2007

Plenty of books exist that try to teach the potential investor that there is nothing magical about investing, and that you can understand how to do it.

Robert Kiyosaki’s Rich Dad book series ( written by Robert Kiyosaki) represents many of those books. Though he started the series, by introducing the concept in “Rich Dad, Poor Dad,” that wealth is influenced by a person’s philosophy on money, he is not the only writer working on his books. He introduces the reader to the concept of advisers, or specialists, that distribute their expertise with regard to investment properties in Minnesota with the investor. One of his advisers is Ken McElroy. Kiyosaki appreciates Ken McElroy’s expertise so much, that he invited McElroy to work write his series.

McElroy points out (in “The ABC’s of Real Estate Investing”) the complete necessity of employing specialists to help you with your investment properties. There are quite a few reasons to hire experts to help, but the two most important ones are knowledge & time. Those two reasons feed into each.

For example, though the investor must have a basic knowledge of construction, law, financing, accounting, the market, etc., there is no way she will ever be able to become an expert in every one of these fields. He needs to become a specialist in the markets that interest him. That alone will use up most of his/her time and energy.

Therefore, if he attempts to purchase a property using this basic knowledge of construction, for example, he will be more likely to make better decisions than the typical citizen who is trying to do the same. However, there’s a significant probability that she will fail to notice something that a professional building engineer will spot right off. bringing your expert along on his\her building inspection is as vital as an amateur adventurer having a tour guide with him on a trek through the jungle.

Now, consider this. Even if an investor were able to establish expertise in all these areas, you still probably shouldn’t spend all your effort managing them on your own. When there are accounting issues to deal with and legal issues to deal with, there just isn’t enough time in the day to manage it all. The investor ought to be out making contacts and staying up with the markets. It’s more cost-efficient for you to just pay the expert to do it, so you can go out and do what you do best. (Or at least what you are endeavoring to learn).

And all this is before the investor purchases the property.

Once you buy a Minnesota investment property, you will have many new “problems” to solve. There are as many things to think about after purchase as before. That is the reason the savvy investor has a team ready with professional advice for every step along the way. This is the step in which an investment property consultant’s insight becomes invaluable.


Building Your Future by Investing in MN Real Estate

August 6, 2007

A lot of people say the best way to invest in their future is to invest in real estate, but few people bother to explain what all the hype is about.

read more | digg story


Beware of the Investment Property “Yabutt”!

July 6, 2007

If you’re new to real estate investing – I must warn you of a dangerous creature that lurks in the shadows of all new investor’s minds – the “Investment Property Yabutt”!

read more | digg story


Do You Have What it Takes to Become a ‘Rich Dad?’

April 25, 2007

Robert Kiyosaki’s book ‘Rich Dad, Poor Dad’ opened the doors wide open on the topic of real estate, and the potential profit and success that can be achieved without a formal education. The book emphasized how a formal education wasn’t necessarily the path to success, and many wealthy business owners and investors had simply attained success through other means.

Real estate investing isn’t for everybody, but it’s an industry that has attracted many successful and unsuccessful people. Educated or not, investors can be found in all ages and backgrounds but it seems that the only surety to success is found with experience. Kiyosaki’s book outlines how two people from completely different walks of life have determined success. One works a standard 9-5 job and finds comfort and security in earning a static paycheck; sure, they may get raises and move up the corporate ladder, but there is not a high level of risk involved and they may have to work extra hours and make sacrifices in other areas of life in order to reach their best position. The ‘Rich Dad’, on the other hand, is highly involved in the real estate market; he is obtaining wealth by creating his own business, and achieving personal goals in the process. Ironically, Rich Dad is getting richer each month without a formal education or having to work at an official company. He is learning the industry with a direct, hands-on approach. There is not training involved here.

Poor Dad on the other hand is struggling to reach his full potential with a career. He is clocking in time at a job in order to pay his bills, secure his future, and spends weekends relaxing, possibly making time for family and friends. Rich Dad also has spare time; however, it is a part of his life so he doesn’t need to work 40+ hours each week and then take time off. When he is earning a passive income, it really doesn’t matter!

By learning the real estate market inside out, a savvy investor can make leaps and bounds towards success. Experience is the key to a steady financial future in this oftentimes turbulent market, but many successful real estate investors have handled and managed the risks involved, and boldly stepped forward to find their next investment property!


Creating Leverage By Investing In Real Estate

January 14, 2007

The term leverage in the world of finance is defined as borrowing money to purchase a company and relying on it to produce enough capital to cover the interest payable on the loan. This is the type of leverage that investing in real estate property.

You do not have to be rich to invest. The goal, of course, is to make money for the long term. The principle is rather simple: spend a little to make a lot. Take the $10,000 you have accumulated in equity, use it as a down payment on an investment property that has a positive cash flow, use the cash flow to pay the mortgage and your investment will appreciate into ten times the original amount over time.

It is interesting to note that after you have invested in a property; your net worth has increased substantially from your initial investment. Let’s take that $10,000 and buy a piece of property with a fair market value of $100,000. The $10,000 is 10% of the value and makes a nice down payment. The mortgage is now $90,000 and you have equity of $10,000. Your net worth has increased by $90,000.

Let’s say the property produces a cash flow of $900 per month. The monthly note on a 30-year loan at 7% is only $598. Your positive cash flow is $302. If you paid all the cash flow into the monthly payment, and if you bought the property in 2006, you would have the property paid off in 2019 – 13 years – and the interest you save would be over $121,000.

There are two directions you could go. One is to buy and hold. This means that you buy this property and you hold on to it with everything you have. It absolutely should increase in fair market value. You should see increases in cash flow. You could add these increases to your note and then you could be realizing in a short period of time a nice, regular income from this piece of property. That retirement nest egg would be actively working for you over numerous years until retirement and through retirement.

If you think you do not have the time between now and when you want to retire, think again. The other direction may be for you. You could build some equity in the property we talked about above. Then you could trade up using the equity you built in making double payments and investment tax incentives. You should always trade up in value or equal in value in order to benefit from the tax savings. When you take this route, you will actually be raising your net worth by much more than equity because you will be steadily increasing your net worth by more than just the cash flow from your investment. If you were to take the fast-track accumulated equity you have built by paying double or triple the principle each month and trade up to a property worth $200,000 rather than $100,000, you could double your cash flow and pay off the mortgage in 16 years. That would give you a hefty cash flow at retirement with a very small initial investment.

These examples are for illustration, but it is a powerful illustration. The beauty of these strategies is that you do not have to lock yourself into making double payments. If an emergency arises, you can always make a single payment. Of course this is very simplified and there are many variables that are not touched on here.

Find more property investment advice on my “windows-live” blog.


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