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.
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.
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.