There are only three reasons to be in Real Estate. If any one tells you any differently, then they don’t understand real estate investing.

The three reasons to be in real estate are Cash Now, Cash Monthly and Cash Later. Let’s take a closer look at each one of them.

Cash Now. Let’s face it, we need money to live and pay the bills. With out this cash we would have to go back and work for “the man”. If you’re not a full time investor, this is a reason why a lot of people are afraid to quit their job and work for themselves.

Cash now is the money that you get from “Flipping” properties. Whether it be from Wholesaling, Rehabbing, Subject To, Lease Option or Pre-Foreclosures we need the cash from each of these investing models to put food on our tables and clothes on ours (and our children’s) backs.

Cash Now is good. Having rehabbed over 450 properties in just a seven year period, (I use each of the above methods to acquire my properties) I’m used to those big checks coming in. But then I realized that if I didn’t continue to get Cash Now through flipping properties, then I would not have any cash coming in at all. Which meant I was not as free as I thought I was.

So I changed my strategy. While those big rehab checks were coming in, I put some of money in my account so that I could live, and then I started to put the rest of the money in Apartment Houses.

Owning smaller Apartment Houses is virtually the same as investing in single family houses. If you’re doing your marketing, you run across Apartment Houses all the time. If you are like most investors, you probably just ignore them and continue to search for the next single family deal.

Apartment houses will give you greater Cash Monthly. In just a short time, you can build yourself a substantial passive monthly income just from your apartment houses. That’s how Robert Kyosaki does it in Rich Dad/Poor Dad.

Cash monthly will give you freedom. Freedoms to do what ever you want when you want. I’m not telling you to stop buying and flipping single family houses, that’s Cash Now. I’m saying to get Cash Monthly (apartment houses), use some of your Cash Now (single family flips) and buy yourself some freedom!

Pretty soon you will be building an empire. You’ll have enough Cash Monthly to be able to take a month off in the summer or what ever else your freedom desires! If you were only flipping single family houses and you took a month off in the summer, you wouldn’t have any income coming in.
Do You See How Cash Monthly Will Give You Freedom?
You can get some Cash Monthly from owning single family houses long term but not as much and not as fast as owning smaller apartment houses. And it’s a lot riskier to have all of your money in single family houses.

What happens if you lose your tenant in your single family house? You loose all of your income. You’re going to have to dip into your own savings to pay the mortgage until you get a new tenant. That hurts!

If you loose a tenant in a three family house, you’ve only lost one third of your income. The other two floors will cover your mortgage until you get another tenant. That’s just one of many reasons that owning small apartment houses is smarter that owning single family houses, but that’s another article all together.

Now that you have Cash Now and Cash Monthly, Cash Later takes care of itself. It comes when you sell, exchange or refinance those apartment houses somewhere in the future.

You see, with apartment houses you have an appreciating asset. No only is it appreciating every month but your tenants are paying off your mortgage. So between the appreciation and the mortgage pay down, your equity just gets bigger and bigger!

You can sell your property and get a boat load of cash. If it’s creating a lot of Cash Monthly, you may want to keep those checks coming in. If so then you will want refinance to get you cash out.

Not 100% of your cash, which will only get you in trouble. You should take out about 75% of your cash leaving 25% equity in the building, that way if there is a down turn in the market, your protected. Not only that, at 75%, you should still have a decent positive cash flow. Did you know that you do not pay tax on any of the money that you take out during a refinance?

Now take that money and go buy some more apartment houses and get some more Cash Monthly! In doing so, these apartment houses will start appreciating and the tenants will begin to pay down your mortgage for you. You’ve just increased your net worth because you have increasing equity in one or two more buildings instead of the building that you started with.

Can you see how your empire is being created? Can you see how it can be created in a short time? Holding single family houses will make you money. Holding apartment houses will make filthy stinking rich! Which do you prefer?

How well do you know your local real estate market? The answer to that question will have a lot to do with whether real estate investing provides a lucrative future for you and your family or rueful memories of what might have been.

By knowing your local real estate investing market, you’re able to keep your finger on the pulse of your local community and to stay abreast of changes in trends, sales prices and rental rates. Knowing immediately about these changes is critical to your investing future. Here’s how each of these three areas will affect your future:

Trends – National media outlets report gloom and doom outlooks for real estate, but even in the most depressed real estate market there are isolated pockets and neighborhoods with property values that are increasing. If you don’t know your local real estate market, you’re simply taking a wild guess as to value. When negotiating with a homeowner, it’s imperative that you know what the property is worth. Otherwise, you run the risk of overpaying or offering too little, which could offend the property owner and get you kicked to the curb with your hat in your hand.

Another reason you want to know your local real estate market is because certain areas within a given community make better investments than others. If you invest your hard-earned dollars in an area that is declining, property values could fall and some or all of your investment could be at risk. By keeping an eye on trends within your local real estate market, you can more readily take advantage of opportunities to get in on the ground floor of an investment and ride the wave of property appreciation, which will have a positive impact on your bank account.

Sales prices – How much is property worth in your local real estate market? Do you have a clue? You need to be cognizant of local sales prices — especially now — because property values can change very rapidly. In today’s volatile investing environment, it’s not unusual for the value of a property to fluctuate by $10,000-$15,000 in a given month. If you have a property that you’re considering selling, you can gain or lose a tremendous amount of money in no time.

Rental rates – Current knowledge of your local investing climate is imperative when determining what rental rates are in a particular neighborhood. If you do a cash flow analysis on a property and you assume that it will rent for $1,500 per month and in reality it will only generate $1,100, you could have a problem, especially if you were anticipating a positive monthly cash flow of $200. If the rent a property can command is $400 less than you anticipated, you would have a monthly loss of $200. Negative cash flow sets the stage for a constant drain on your financial resources, and could eventually cause you to rethink your commitment to real estate investing.

Today’s real estate investing climate makes accurate and timely information critical to your success. If you don’t know your local real estate market, you could be in serious trouble. An excellent way of developing a proper and accurate knowledge of your local market is by trailing an experienced mentor who knows what he or she is doing. In addition to teaching you how to analyze current market conditions, you’ll also be able to better understand what to look for in your local real estate market.

Real estate investing is a great way to expand your financial opportunity, but a failure to know and understand all of the variables within your local market can very quickly erode opportunity. Learn your local real estate market and make this your best year ever!

Many people have a very 19th century view of real estate investors. They think that we are modern-day “robber barons” who prey upon distressed or ignorant people, take advantage of them, and laugh all the way to the bank. The truly sad thing is that some real estate investors think this of themselves, and think that in order to get ahead, they must behave unethically. The truth is that, in the long run, it pays to be a scrupulous investor. Do you really expect referrals if you “take advantage” of people? Of course not. Envision yourself as a problem solver and your business will be much more successful – and you’ll be able to sleep at night.
Help People With Their Problems
PT Barnum said, “There’s a sucker born every minute”. But in today’s world, “suckers” are a little harder to find. The Internet makes knowledge much more widely available, and people are generally more savvy then they’re given credit for. In fact, ignorance is much more likely to err on the side of overpricing a home than underpricing it, and besides, do you really want to make your living by taking advantage of people? Doing so will likely come back to haunt you. Instead, you should focus on finding people with problems. It’s your job to help them.

There are thousands of properties across the United States that people desperately want – need – to unload, and they’re willing to do so at a discount and with favorable terms. Perhaps the owners have been involved in a divorce, received a job transfer, or they’re under a tremendous amount of financial distress. Don’t think of yourself as “taking advantage” of the situation. Think of yourself as extending a helping hand. The sellers will be able to detect the difference in your attitude and will respond differently to you. And after all, they need to sell. It’s hurting them each day that their home is on the market. If you come along and are able to negotiate mutually agreeable terms, then it is a win-win situation.
Be a Full-Time Problem Solver
The surest path to real estate investment success is to focus solely on helping troubled people solve their problems. Many distressed sellers are embarrassed about their situation, or don’t want to tip their hand for fear that you’ll take advantage of them. So simply ask the following questions of anyone you find through a classified real estate ad. Why are you selling? When do you need to sell by? What are your plans after you sell? What is the minimum amount of cash you need in your pocket as a result of this deal? What do you plan to do with the proceeds from the sale of your home? If we were to close within a week and I paid cash for the full purchase price, what’s the best deal you could give me?

Do not act like an interrogator. Strike up a conversational tone. Truly desperate sellers will be anxious to talk to you. Keep the conversation moving and get all of the information you need. Casually ask the same question in different forms more than once to make sure their story remains consistent. As previously stated, many distressed sellers are embarrassed of their situation. Do your best to make them feel at ease.
You Can’t Solve Everyone’s'S Problems
There’s two requirements for every deal I do with a motivated seller:

1. I make money

2. I solve the seller’s problem

If I can’t do both, I won’t do the deal. This is a good rule to live by, since doing one without the other is not good for your business. If you help the seller and don’t make money, you are working for charity (which is fine, but keep it separate from your business). If you make money and don’t help the seller, you are a slimeball! Don’t waste time on the phone with people who don’t need your help. Unmotivated sellers take time away from your real vocation – lending a hand to those who need it. Stick to your principles and you will not only be conducting yourself like a Good Samaritan, you will be building a real estate investment empire in the process.

I came across some interesting figures put out by the Bureau of Statistics and the IRS. Thought maybe some of you would find them interesting, too. Twelve percent of Americans over sixty-five are living, or trying to live, on incomes of less than $5,000. Only four percent of people over sixty-five have annual incomes of $30,000 or more, and only three percent have incomes over $50,000. The average annual salary of a full-time worker with a high school education, is $24,180 ($11.63 hr). For a full-time worker without a high school education, it’s $16,848 ($8.10 hr.) It goes on to say that fifty-eight of the working people have taxable incomes of less than $25,000, and only two percent have taxable incomes of $100,000 or more. How could only two percent be making $100,000 or more, while the vast majority is making only $24,000?
It’s All in the Choices We Make
The only logical explanation has to be education and knowledge (or maybe I should say the lack of education and lack of knowledge), and the choices we make as we go through life. If you choose to be “average” (and it’s your choice), then you will get average results. If “average” is your comfort zone and you’re happy living in that zone, good luck. If you’re happy working your job, and you’re earning all the money you need, congratulations. If your job will provide you with the kind of retirement income and security you want, congratulations again. If not, then you obviously have to get out of your comfort zone, make the necessary effort and commitment and do something the average person doesn’t do. Approximately one million workers are being “downsized” (a polite way of saying, “You’re fired”) each year. For years, many of these people were happy in their comfort zone and failed to learn how to do anymore than what their jobs required. Their choice was to continue doing the same thing they had always done, even though they had the choice and the chance to learn to do better.

Recently, on the evening news, there was a story about a woman being “downsized” after twenty-seven years on the same job. Her job was inspecting TV’s coming off the assembly line. For twenty-seven years she was in her comfort zone and did nothing to improve her knowledge or education and learn to do anything different. Is there a lesson to be learned here? As the saying goes “If you continue doing the same thing you’ve always done, you will continue getting the same thing you’ve always gotten.” (Unless you’re “downsized.”)
Education and Knowledge
Over the years, Joanne and I have spent thousands and thousands of dollars going to many seminars. Not that we could always afford to go, but rather because we couldn’t afford not to go. We had a choice, and our choice was to spend the money to get an education. Being in the two percent bracket is much better than being “average” and in the fifty-eight percent bracket. And we don’t have to worry about being “downsized.” Education and knowledge doesn’t get downsized. (But according to some of our friends, we just got “lucky.”) I’ve heard it said many times that you will pay for your education at some point in your life. And you get to make the choice when you will pay. You can pay when you are young, healthy, and able to work, or you can pay when you are old, sick, broke, and unable to work. The choice is yours. When do you choose to pay for yours?
How Much Does it Cost to Remain Ignorant?
I gave a seminar several years ago, and whenever I think of that seminar, two men instantly come to mind. One was a plumber that called saying he wouldn’t be able to attend the seminar, but would like to stop by and buy my books, which he did. He said he sure would like to attend, but he had a plumbing job he just had to do that day. (I never heard from him again.) The other man was about ready to retire from the Marines after twenty-eight years service. He called me about two months after the seminar saying he had done two mobile home deals. He “thought” he did okay, but he didn’t really know because he didn’t know how to use a calculator. He wanted me to give him a crash course in using one.

After thirty minutes or so on the phone, he got the hang of it and punched in the numbers on one of his deals. In fact, he punched the numbers in several times; he didn’t believe the answer he kept getting. After I agreed with his numbers, there was a long pause. Finally he said, “My God, Lonnie. This stuff is scary.” The Marine paid $295 to attend that seminar to learn how to make his money do the work, so he wouldn’t have to. He learned how to make more money on one deal than he got from a month’s pay being a Marine. Now, can you tell me how much it cost that plumber for not attending the seminar? Let’s suppose he made $500 on that plumbing job that he just had to do; but how much did he lose by not learning what the Marine learned–making his money do the work? The next day, and probably every day after, he has to do another plumbing job to get a check. The Marine can do a simple mobile home deal and obligate somebody else (maybe a plumber) to send him a check for years.
What’s Your Choice?
The records show that ninety-five of the people who reach retirement age will need some kind of help or a part time job in order to live a decent life. Those people had the same opportunities and the same choices to make as we did. They just made the wrong choices. They chose to be “average” all their life. I may be getting old and lazy, but I’m still learning. You might finish school, but you never finish your education. Also, we’ll get the chance to spend time with some very good friends and meet some nice people we’ve never met. You can’t put a price on that. So, what will your choice be…the two percent bracket or the fifty-eight percent bracket? When do you chose to pay for your education, now or later? Are you willing to settle for being “average”? The choice is yours, and I hope you make the right one because you will have to live with the results of your choice. The best investment you can make is in yourself.

You get a deed from a seller in foreclosure. Before you can record the deed, the seller gives a second deed to your competitor. The competitor records his deed at the country first. Who wins? This is an interesting issue that most investors don’t seem to grasp. First, understand there are two issues here: one is ownership, the other is notice. The recording of a deed is NOT necessary to transfer ownership of real estate. The simple act of executing a deed and delivering it to the buyer passes ownership.

The recording system gives constructive notice to the world of the transfer of title to property. Recording simply involves bringing the original deed to the local county courthouse or clerk and recorder’s office. The original deed is copied onto computer or microfiche, then returned to the new owner. In addition, the county tax assessor usually requires the filing of a “real property transfer declaration,” which contains some basic information about the sale.

There is a filing fee for the deed, which runs about $10 per page. In addition, the county, city and/or state may assess a transfer tax based on the value of the property or the selling price. This makes recording a deed an expensive proposition in states that charge 2% or more of the purchase price. If you are taking a deed in anticipation of doing a short sale or other deal that has a small chance of success, keeping a deed in your file cabinet until the last minute may be the only option. Just understand that if you don’t record, you run the risk of another investor beating you to the punch.

Every state has a recording statute which dictates who wins in a battle over ownership in the case of a “double deed” scenario as described above. Most states follow a “race-notice” rule, which means that the first person to record his document, wins, so long as he is a bona fide purchaser. A bona fide purchaser is one who:

• Received title and recorded in good faith, and

• Paid value, and

• Had no notice of a prior transfer

In a foreclosure situation, an investor often gets a quitclaim deed for free. So, if a subsequent purchaser gets a deed for nothing, then records first, he is NOT a bona fide purchaser. Also, if he had notice of a prior transfer, even unrecorded, he is not a bona fide purchaser. If he acted in bad faith, he is not a bona fide purchaser. In short, the BFP rule protects an innocent buyer who really did lay out money and get a deed in good faith. Foreclosure investors often act in bad faith, convincing a seller to give a deed to a property that was already transferred.

The practical side of the issue, however, is proving your case. If you get a deed from a seller, then your competitor gets a deed and records it and is not a bona fide purchaser, what do you do? The bad news is that you have to hire a lawyer to commence a lawsuit to contest his title. This may not be worth the effort if there isn’t much profit in the deal. It may make sense to simply record a lis pendens to hold up the re-sale of the property by the other investor, then settle out of court. Of course, you should consult with an attorney before proceeding if you are in a situation where you are uncertain of your legal rights.

I once asked my handyman what was the easiest money he had ever made in his life. His answer was that although he had been in many small businesses and had done countless handyman/contracting jobs over the years, the easiest money he made was in roofing. He explained how that roofing work is higher risk work that many folks dislike and fear doing, therefore the mark-up is tremendous.

He especially likes smaller flat or semi-pitched roofs. For about $250 in materials he could charge $1,000 for a roof which he could install in a day. Larger, shingled roofs have even better mark-ups, although more time consuming.

I then began asking myself the same question. What was the easiest money I had ever made in business or investing?

There are 3 ways or modes (versus tools and techniques) that came to my mind quickly.

1. By far the easiest money I have ever made was from real estate appreciation. I have been fortunate to have been in the game long enough to ride two giant waves of appreciation and inflation. The price runup that occurred in the mid to late ’80s, and the current bubble we have going now. Any dummy can make money in real estate during strong seller’s markets. It makes you feel smart, but the main smart thing you really did to achieve it was to be smart enough to buy it.
2. Next, buying discounted property through patient tracking and buying of properties is the next easiest money I have made. Like when I bought a $20,000 house for $2,800. Nuts, but true. Or, like the $20,000 purchase with 100% owner financing which was resold via lease option for $39,000.

   Thoughtful and determined deal making is the second easiest way to make money in real estate. The cliche is true – you make your money when you buy. One caveat: Lower-income grade deals must be outrageously benefically-priced to be worth the risk. Solid, middle-grade properties need not be “steals” to be good buys. A few years ago, I bought 2 houses from my attorney at decent to fair prices, but they were in excellent areas and have ALL brick exteriors with new roofs. They weren’t steals, but they have appreciated by $20,000 each since acquisition.

3. Lastly. Rents. This takes time as I mention over and over, but once properties become seasoned and rents rise and debt drop off – rents are easy money. The problem – few have the future sight to maintain their hand in the game. It is a wonderful business to learn. Most landlords don’t work very hard.
4. Rehabs and Interest Profits. Yes, these could be debated as easier than rents, but without rents you can’t get number 1 – Appreciation and Price Inflation from governmental debt-driven inflation. And, you pay a lot more taxes, therefore limiting your net worth growth.

Condominiums may appear to be the ideal way to purchase rental property, as their price is often lower than the price for a single family home. You may find a condominium unit which is in an ideal location, located near schools, work, and public transportation. The unit may be in “move-in” condition with terrific views. There is one important safeguard you will need to watch for when buying a condominium for investment and rental purposes.

Condominiums are governed by a set of Condominium Documents or CC & R’s, and a Homeowners Association sees that the rules set down in these documents are followed. Contained in these homeowner rules may be a stipulation that rentals are permitted only one time per year. This may not be a problem, as you may find a tenant for an annual rental, but be careful that you feel confident that you would not want to rent the unit out more often than once per year.

When you initially make your offer to purchase a condominium unit, you will normally be given a limited amount of time in which to review and approve the condominium documents. Be sure to ask for these well in advance of your closing date. If you are represented by a REALTOR®, your agent will normally get these documents for you. If you are represented by an attorney, be sure to show the documents to your legal counsel as soon as possible.

The condominium documents are often lengthy and cumbersome to read. You would want to find any objectionable details as soon as possible, before you have incurred expenses such as a title search, loan application fees, or home inspection. Besides looking for the rental provision in these “condo docs”, there are other safeguards which are important to look for.

The two most important details to look at are the budget and the amount set aside for reserves by the homeowner’s association. Ask if any special assessments are planned for the near future. A well-run homeowners association should be run like any good company or corporation, with a balanced budget and adequate allowances for reserves for repairs, such as roof, air-conditioning, paving, painting, or pool upkeep.

You wouldn’t want to purchase a condominium for rental purposes, set a rental amount, only to find you will be assessed a large amount for a new roof. Most condominium budgets spell out the useful remaining life of the major systems in the building or property. You can look at this and determine how many years are left before the building needs to be painted, the roof replaced, the air-conditioning or generator repaired or replaced, the driveway resealed, or the pool heater replaced.

You may think that these concerns can be dealt with later, when they come up, but taking a close look now could prepare you for unexpected expenses and you can then determine the amount you will need to charge for renting out your investment unit to cover all your costs. Condominium units can be great investment rental properties, as they are often located in resort areas. Properties located in popular resort areas may be better rented out as a “seasonal rental,” when the rents charged are typically higher than other times of the year. If this is the case, you would then want to look carefully at the rental restriction rules outlined in the condominium documents.

Be sure to let your Realtor, attorney, or escrow officer know that you would like to review the condominium documents as soon as possible after escrow is opened. Being well prepared when purchasing a condominium for rental investment purposes will save you money and help the closing go smoothly and quickly.

The following are the top 10 reasons people use for not succeeding in real estate investing. If I offend anyone with this list, it probably means I’m right on track!

Reason #1: No Cash

The Myth: “You need money to make money.”

The Truth: Find a good real estate deal, and the money will find you. Ask any seasoned investor and they will tell you that lack of funds is never an issue; lack of good deals is! If you can negotiate a good price on a house, you will find plenty of partners willing to put up the money.

Reason #2: No Time

The Myth: “I’ve got a job, a spouse, kids and little time on my hands.”

The Truth: Throw out your television and you’ll have all the time you need. People spend an average 3 hours per day in front of the tube. They spend even more time on weekends. Want to do something fun this Saturday? Load the kids in the mini van and go driving around looking for ugly houses. Make a game out of it giving a dollar to each of your kids that spots an ugly house. Tell them that each ugly house your buy means enough money to take them all to Disney World.

Reason #3: Everyone Says This Stuff Doesn’t Work

The Myth: “That late night TV stuff doesn’t work.”

The Truth: You can convince yourself that anything won’t work. Henry Ford once said, “Whether you think you can or think you can’t, you are right.”

Every real estate transaction has risks; some risks are realistic, while others are remote. If you listen to the critics, the naysayers and other pessimists, you’ll convince yourself it doesn’t work. Most people that criticize money-making ideas need to do so for their own ego. After all, if it were true, what’s their excuse for not being successful? Make it a point of not taking financial advice from anyone who makes less than you do.

Reason #4: Too Much Competition

The Myth: “There’s too many people buying houses to find a deal.”

The Truth: There are more than enough deals to make everyone rich. At any given time there are hundreds of properties for sale in your market for each investor looking for them. In addition, a majority of people who say they are investors are just sitting on the sidelines waiting for someone to fall in their lap. Don’t be one of them – go out and make deals happen.

Reason #5: It Doesn’t Work in My Market

The Myth: “It doesn’t work in my market.”

The Truth: It works in EVERY market. True, it may work differently in some markets than in others, but there are investors making money in every city, every day of the week. You have to learn your market – the rents, the trends, the local customs, the bankers, the title companies, etc. Then, learn the techniques and adapt them for your market. If you are in a hot market, you can sell properties faster and ride inflation. If you are in a down market, you can find lots of bargains. And, in any market, there are people with financial problems that translate into bargain properties.

Reason #6: The Recession is Coming

The Myth: “Certainly, the September 11th tragedy, the huge number of layoffs and the decline of the stock market will kills the economy, so anything I buy will go down in value.”

The Truth: Sell cheaper or with attractive terms. When Dell wants to move computers, they drop the price. When GM wants to move cars they offer no interest financing. Be creative and go things they make your houses sell and rent faster. If the prices are falling, buy way below market and sell just below market. If rental vacancies go up, offer free satellite TV (heck, it’s $25/month). When everyone else is “dooming and glooming”, it only clears out the competition.

Reason #7: Realtors Won’t Cooperate With Me

The Myth: “Real estate agents don’t want to cooperate with investors.”

The Truth: The right agent can be your best friend and #1 source of business. I have a one agent that brought me six deals in the past year. He knows exactly what I want and only calls me when there’s a deal. You need to educate a few agents and let them know exactly what you want. Few agents have repeat customers – you have to make them understand that you will be giving them business over and over again.

Reason #8: I Have Bad Credit

The Myth: “I need good credit to buy houses.”

The Truth: Good credit helps, but you don’t need it to make money in real estate. Lease/options, owner-financing, flipping properties and other creative techniques will allow you to buy real estate without credit. You can always use a partner who has good credit. You can also borrow “hard money” without having good credit. In the meantime, you can work on fixing your bad credit so you can use it as an asset in the future.

Reason #9: I Might Lose Money

The Myth: “Real estate is very risky.”

The Truth: Real estate is one of the safest investments you can buy. The stock market is beyond your control. Savings, CDs and money market funds won’t give your enough return to make money. You have to be willing to take a calculated risk to make money. The more you educate yourself, the less risky real estate becomes. However, don’t think you need to know EVERYTHING before taking action.

Reason #10: I Don’t Know What To Do

The Myth: “I need to learn more before I start.”

The Truth: You probably know more than enough to get started in real estate. It takes years to learn a lot. You never learn everything. Success is an ongoing learning process. Read some books, take some seminars and go take MASSIVE action. Then, learn some more and take a lot more action. If you are really impatient, enlist the help of others.

Henry Ford said, “Why should I clutter my mind with general information when I have men around me who can supply any knowledge I need?” Henry Ford was a smart man because he realized that he didn’t need to know it all if he could consult with others that did. Ronald Reagan’s cabinet was said to be the team of the brightest people in politics.

I was just reading some of my notes and quotes that I’ve complied over the years and thought I’d share some of them with you. Most were obtained from various speakers/teachers/writers of motivational tapes/books/seminars etc. Hope they have the same positive impact on you, as they did for me.

* If you’re not getting what you want in life, take a good look at the reasons (I call them excuses) that are preventing it.

* There comes a point when you have to stop making excuses and start taking action that will get the results you want.

* We hold on to bad habits because we’re not really committed.

* Make a commitment that will force you to take action.

* Doing nothing is a decision to stay where you are.

* Know what you want, and be willing to give up something to get it.

* Take control of your life, or someone else will.

* Financial struggle is often the result of people working all their life for someone else.

* You must be able to recognize the difference between a goal and a fantasy.

* Don’t be afraid to make a mistake, that’s how you learn your best lessons.

* Don’t let other people do your thinking for you, think for yourself.

* People that don’t understand how money works, will always work for people that do.

* Most people are in debt from the time they leave school until they die.

* If your only source of income is a paycheck, your livelihood is entirely dependent on your employer.

* Only 2% earn over $100,000 yearly.

* Where are you now? If you lost your job tomorrow, how long could you support your family on your present assets?

* If you do the same thing this year, as you did last year, where will you be next year?

* Minimum effort equals minimum wages.

* The type of people you spend your time with determines your future.

* Social Security checks are the major source of income for 66% of retired people. Average SS retiree gets $710 monthly.

* Our lives are a reflection of our habits, and what we study. What are you studying?

* If you spend tomorrow’s earnings for today’s toys & pleasure, you’ll always be broke.

* Your thoughts will make you rich, or keep you poor.

* What we know is so small, compared to what we don’t know.

* It’s not the things you do that you regret the most, but the things you didn’t do.

* When you stop learning, you start dying.

* Some people make things happen, some people let things happen, some people watch things happen and some people don’t even know what’s happening.

* Hang around people that are smarter than you.

* Your financial future will be determined by the choices you make today.

* The best way to conquer fear is to meet it head-on.

* What you know is your greatest wealth. What you don’t know is your greatest liability.

So, it’s decision time. You can choose to be in the 5% bracket and learn how to enjoy financial freedom and security. Or, you can do like most folks do and settle for whatever your employer is willing to pay you. (Providing you don’t get “down-sized”.)

If you were to guess that buying a home is not like buying a parcel of land, you’d be right – and you’d also be wrong. Although the house purchase is different from the land transaction, it’s actually the same in certain key respects. The reason is there are a couple of critical principles that apply to all types of property – houses, land, retail centers or whatever – and they can have a big impact on a property’s value and its market appeal.

Location (Location, Location)

We’ve all heard that location is the most important thing about a property, but why is that true? You can demolish or add onto the house or maybe even pick it up and move it (although that’s expensive and often not feasible), but you can’t pick the land up and move it. It’s the land that gives the property its location, and location is the only thing about a property that you can’t change. It determines how the property can be used (zoning), visibility and accessibility to public utilities, and it has a positive or negative effect on value based on the surrounding properties.

Value Is Relative to Use

If the property matches most of your needs and wants, it will be more valuable to you. How often have you walked into a store and bought something you couldn’t use or didn’t really want only because you thought the price was ridiculously low? Would you have paid a lot more for it? Probably not.

A corollary of this principle is that the property’s inherent value increases if the property can be used by many potential buyers or categories of buyers. Suppose you’re thinking about buying a building lot that has a stream running through its front yard. Your builder tells you he’ll have to put the house on the far side of the stream and the driveway (about 200’ long) will have to cross the stream. The cost for all of this work will be about $30-40,000. That driveway could cost you more than the initial $30,000 over time in maintenance, repairs and resurfacing. However, something even more important should make you hesitate. Someday when you try to sell the property, you could discover that most buyers won’t want the property because of the stream and driveway or they’ll offer you much less than you want for it. Now what’s this property worth to you? When you sell, you’ll probably have to discount the price or wait a long time for the “right” buyer to come along – or both.

Value = Price + Terms

Ultimately, buyers determine what a property is worth, but an offer is much more than just price. It’s a set of scales with price on one side and terms and conditions on the other. The real value of any property is the price a buyer is willing to pay in exchange for terms and conditions. You want to buy that building lot with the stream running through it. Public water and sewer aren’t available and the seller hasn’t had the property tested to determine if some type of sewage disposal system would be approved by the county health department. You need to know if the lot is buildable. You don’t want to spend the money for testing unless the seller accepts your offer and you don’t want to have to buy the property if you can’t get a building permit. What you might do here is give the seller an offer contingent on your being able to get the property approved for a certain type of sewage system and anything else you’d need in order to get a building permit. You’d be more likely to offer the seller a higher price if the seller would agree to these conditions than if the seller wanted to sell “as is.” Sellers who get the highest price usually have to give the buyer favorable terms. Buyers who want the lowest price will have to forego most if not all of their contingencies. The seller’s willingness to assume some of the risk and give the buyer time to satisfy conditions is as important (and sometimes even more important) as price in development property transactions.

Buyers Are Sellers

Before you decide to buy a property, you should evaluate it as objectively as possible. Put it under the microscope and try to identify objections that buyers in the future might have when you go to sell. In short, when buying, think like a seller because some day you will be one. Whatever you buy should have appeal to the widest segment of the buyer market, and remember that there’s no substitute for a good location. A good location is one that enhances the property’s value relative to the intended use. For instance, when builders purchase development land, they take into account factors that will reduce the property’s appeal in the eyes of the end users (homeowners), such as location on a busy street. On the other hand, if they want to develop the property into retail space, visibility and high traffic counts are critical.

Don’t Over Improve

The value of residential property is generally defined by the uses and sale prices of neighboring “comparable” properties – those having the same characteristics as your property. Investment property value (including land) is tied to the income or profit that the property can produce, either immediately or down the road. Value won’t increase in direct proportion to the cost of additional improvements if surrounding property values are equal to or less than the property’s value without the additional improvements. For example, you live in a subdivision of homes that have two-car attached garages and sell for $250,000. Four years ago, you had a three-car detached garage built in your back yard because you wanted more garage space. Now you’ve got your property up for sale for $300,000. Even if you find a buyer willing to pay your price, the buyer’s lender will have an appraisal done to make sure that the property appraises for the purchase price. The ideal buyer in this situation would be someone who wants mega garage space and can either pay cash or doesn’t need a mortgage for more than 80% of the purchase price.