It is hard to make a strong argument against the value of the internet.  To begin a list of the improvements it has offered in the arenas of commerce, government, communication, and personal life would simply be a waste of time, because that list is so comprehensive.  However, the internet—like all good things—has some side-effects which may be great for some, but are a thorn in the side for the rest of us.

I know a physician who is an old-school surgeon, and have often heard him complain over the course of the last decade or so about the know-it-all patients who spend five minutes on Wikipedia and come to his office thinking they have all the answers.  Healthcare is an extreme scenario, because no matter how much the patient may think they know, in the end they have to use the Doctor’s services to get whatever treatment or care they need.

Real estate, on the other hand, is not as sure a thing as medicine.  In real estate, that same know-it-all customer might spend five minutes researching home sales or purchases, and conclude that they simply have the information they need to do it on their own.  Twenty years ago, realtors and investors could operate their businesses however they wanted, and treat their customer with as much or little care and consideration as they saw fit—like in healthcare, the customers had no other options.  But now, with listings and tutorials readily available to the average browser, real estate professionals must continuously demonstrate their value to customers in an ongoing effort to prevent being replaced by the internet.

In most cases, this can be achieved not by changing how hard you work or how you conduct your business and transactions, but rather by simply adjusting the manner in which you treat your customers.  There is no rule of thumb guiding the proper treatment of customers—every customer’s unique psychology and temperament will determine what mannerisms appeal most to them.  The key, in all cases, is to be attentive and considerate, and always polite.  Whether your tone is serious, comedic, chipper, etc., will be a function of what you think will mesh best with each individual customer.

Real estate purchase and sales is a people-oriented industry.  Real estate professionals, including investors, must be engaged and helpful at every step of the way, thinking less about the numbers and more about the needs of your customers and the long-term value of the services you can provide your customer whether that be a buyer, seller, renter or another investor.

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There is considerable debate as to the most effective and appropriate way to present a home during the sale process.  Some maintain that the home should be sterile, pristine, as if it had never been set foot in; others disagree, feeling instead that the buyer should walk in and feel as though they could sit down on the couch and start living there.  Obviously, there is no right answer, and the manner in which you decide to sell your home will ultimately be a function of your style, budget, and needs.  I am not here to answer that question, but rather to provide a few basic guidelines which should be fundamental to the process, regardless of the style.

The easiest place to start is the exterior.  The rule of thumb here is that the property does not have to be the most stunning on the block, but it should at least fit in.  That means if every house has some landscaping but no garage, then your home should at the very least have some landscaping.  This is not an attempt to out-do, but merely to fit in.  If you choose to exceed (build a garage and plant a garden), great!  But it is not one of the basic requirements.  Be sure to check the roof, the exterior walls, window shutters, etc.

With most things, I find moderation to be the key.  With the interior of a home, it is often best to include some furnishings (don’t strip the place bare).  That is, leave some furniture in place, but remove all photos, mementos, souvenirs, or anything else that might hint at the fact that this is your home.  Generally speaking, people are more uncomfortable when they are constantly reminded that they are traipsing around through someone’s living space—it is better to let them focus on the property itself.

How much you furnish and decorate is up to you, but it is essential to clean thoroughly.  This means the standards (washing, vacuuming, having carpets cleaned and wood waxed, etc.), but also minor repairs like chipped paint or electrical outlets.  Anything that makes your home look shoddy needs to be amended.  Keep the smell of the home in mind (especially in kitchens, laundry rooms, basements, and bathrooms, where smells tends to build up over time and leave a nasty impression).  When presenting, consider something to enhance the fragrance (anything from flowers to a spray can), so that the buyers don’t walk away with a bad taste in their mouth—literally.

Again, so much of what you do when presenting your home is going to be determined by personal preference, how much time you have to spend, and what you can afford.  But be sure that your home is not a sore thumb in your neighborhood, keep it clean and impersonal, and be friendly and personable when presenting it.  This is all any buyer will ask, and it is not too difficult to provide.  Everything beyond these standards is just bonus—but be careful of overkill, you don’t want to “wow” any buyers right back to their cars!

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http://www.indianainvestmentpropertygroup.com

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Based out of Indiana, Jay Redding is a real estate entrepreneur, consultant and educator with experience in residential and commercial investing.

It is not altogether difficult to be a mediocre part-time investor.  All it takes is doing a deal or two every couple of years, and not quitting your day job.  And some people are happy at that level of investment.  But for many of us who are more ambitious, there is a terrible frustration associated with the struggle to rise out of the enormous crop of average, and into the upper echelon of successful stand-out investors.  The question then becomes, “How do I change what I’m doing now to become one of those outstanding investors?”  The answer is not what you want to hear: you already know what to do, you just have to do it better.

This may sound like discouraging news, but this article is a reminder that doing a better job of the job you are already doing is a simple matter of execution and maximizing your efficiency and precious resources.  In other words, it is a matter of being conscientious.  This means considering every decision and option carefully at every turn, no matter how minor.  Intensity and efficiency is a function of systematic preparation and execution, which means you need to make a plan, establish goals, and stick to it for everything you do.

When you sit down in the morning to make your daily calls to leads, instead of just plopping down at your desk and starting to work your way through your leads willy-nilly, do the job with intensity and efficiency.  Organize your leads in a database, give yourself a window of time during which you will do nothing but call leads, and do nothing but call leads.  When you hang up the phone, pick it back up and make another call.  Don’t get up in between to grab a drink, or check Sportscenter, or anything else.  Stick to your plan, accomplish your goals.

If you do this with all of your business’ activities (it’s easy to do for a day, but can you do it for a year?) you will be amazed at the noticeable change in your productivity, income, and free time.  And who would turn down any of those?  Enjoying the fruits of labor first requires labor, and it stands to reason that the harder you work during the time you designate for work, the more you will be able to enjoy it during the rest of the time.

So, like I said, there are no new lessons in this article.  You already know what you need to do to be a successful investor (and if you don’t, then open your eyes and take a look around, because the lessons are everywhere).  The key to actually being that successful investor is diligently sticking to those tasks, and working with a system that allows you to establish and work towards goals, as well as to evaluate your performance against those various goals you set.

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There is nothing unethical, sleazy, wrong, or dangerous about knocking on doors to generate some leads for your real estate investment business.  The truth is, it may be the best way to get good information on exactly the type of property you want to buy.  If you only had 3 days to close a deal, wouldn’t you show up at the doors of the homes you wanted, gauging any interest in selling?  People are generally deterred by one of three factors: it’s too dangerous, it’s a waste of time, or it’s an invasion of privacy.  All are false presumptions.

Here’s what you do: target exactly the kind of home you want to buy, in a neighborhood with a number of comparable options; knock on the door on a weekday evening, and politely explain that your business is interested in purchasing a home in the area, and you are wondering if anyone in the neighborhood is interested in selling.  It’s that simple.

The responses you will get will range from being told not to return, to being given a list of motivated sellers.  Generally speaking (and assuming you are not targeting destitute neighborhoods), you will not have anyone yell in your face, no doors will be slammed, and you certainly don’t have to be concerned about having a gun pulled on you.  But if you are concerned about safety, consider these common sense tips.  If you are a woman, bring a man with you.  If you are a man, bring a woman (people tend to be less threatened that way).  If you are invited into someone’s home, use good judgment and consider your safety; if you have a bad feeling at all, stay outside.  Don’t overdress when knocking on doors, as people tend to put their guard up when suits show up at their door; for house calls, business casual is best.  Be mindful not to intimidate anyone who might answer the door; take a step back after knocking to maintain the homeowner’s sense of personal space.

If you follow these guidelines and remain unfailingly polite, you will be amazed by the response.  People love to talk, and if they do not have their own reasons to sell, then you may still be likely to hear all about this neighbor’s divorce, or that neighbor’s impending foreclosure or debt.  In five minutes of work, you could walk away with 2 or 3 really solid leads that just happen to be right next door.  It is not a waste of time—you can easily cover 5 target neighborhoods in one evening of work (between 5-7pm), and even if that only generates one sale, it has been a good use of time.  Imagine if it generates three!

Don’t be put off by showing up at people’s homes.  If they don’t want to talk to you, they won’t.  No harm done, you can simply move on to your next target home, having spent a total of about one minute on this failed lead.  For those who want to find deals quickly, why not go straight to the source?  Find motivated sellers in target neighborhoods simply by knocking on their doors and talking to them.

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Practically anyone can buy a home.  It doesn’t take a whole lot more than a little bit of saving, getting a loan, and moving in (very simply put).  But staying in a home is a completely different story, and with the levels of defaulted mortgages and foreclosures at their highest levels ever, it is essential for you, the home buyer, to understand the ingredients of successful, sustainable home ownership to avoid the pitfalls suffered by those already facing dire straits.

In its most fundamental form, sustainable home ownership is about preparation, whether you are buying your first home for residence or you are an experienced investor.  This means knowing what you have, predicting what you will have, knowing what you spend, knowing what you will spend (this should not just be a prediction), and planning for contingency.  That last one—planning for contingency—is where the vast majority of the home buying population goes wrong.

Contingency planning means having enough of a cushion in your cash reserves to get you through the toughest times.  Even if you lose your income, come into unforeseen bills or expenses, etc., you should not be so strapped for cash that you are forced to the curb.  You should always be able to live on your reserves for a year.  When you are budgeting, this cushion will account for a pretty hefty proportion of the required overall value for purchasing the home.  But don’t skimp on the contingency fund—failing to have enough reserves is the number one reason people fail to sustain home ownership.  Like I said, it’s relatively easy to buy a home; and it is especially easy to do when everything is going well.  But when you fall on the toughest times (and we all do at one point or another), it is essential that you have provided enough of a cushion of cash reserves to break that fall.

The moral of the story is to save before you buy.  Save up, develop good credit, and get pre-approved for a loan before you even begin the process of searching for a new home or investment.  This will make both the process of finding what you want and closing on it much easier, and you will be effectively prepared for the inevitable unexpected hardships inherent to home ownership.

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http://www.indianainvestmentpropertygroup.com

http://www.practicallyfreehouses.com

Based out of Indiana, Jay Redding is a real estate entrepreneur, consultant and educator with experience in residential and commercial investing.

Everyone knows marketing is expensive but necessary.  It is how we acquire new customers, and it is how we keep our businesses afloat.  But the smartest investors know that if they do their job right, they may have to spend less and less time and money on their marketing efforts, simply by taking strides to retain customers as their careers develop.  Statistical studies modeling American businesses (not specific to real estate) show that it can cost up to five times as much to acquire new customers as it does to work with old ones.  Further, increasing customer retention by 2% has the equivalent effect of decreasing costs by 10%.  And that’s all business—in real estate, statistics and figures must be scaled in accordance with the fact that one additional sale produced by a repeat customer can be an enormous portion of your yearly quota (rather than a mere 10% decrease in costs).

Studies more specific to the real estate industry have revealed an even more striking relationship between retention of customers and realtor success.  The National Association of Realtors compiled  a Profile of Home Buyers and Sellers in 2008, in which they discovered, among other trends, that 18% of repeat real estate buyers choose to use an agent they’ve worked with before.  Perhaps it’s convenience, perhaps it’s trust, perhaps it’s a lack of any other options—whatever the reason, realtors would be wise to keep the lines of communication open with repeat customers like these.  Even more impressive, 26% of home sellers also used an agent they had worked with in the past, and about 70% of those customers overall would both use their agent(s) again and would recommend them to friends.

The point is this:  Are you one of the countless realtors or real estate wholesalers that finally gets a deal done and then never hears from the customer again?  If so, you are missing out on a huge proportion of your total business—according to statistical models.  The key to maintaining contact and an open relationship is organization and diligence (as with most things).  This means setting up or improving your database of leads and customers.  This should be a comprehensive list of everyone you or your business has come into contact with—successfully or otherwise.  Each entry should contain contact information, details about your interactions with the customer (what did you learn from phone calls and interviews?) and a contact log that shows exactly when you last spoke.  With a database like this, you can organize your contacts by priority, type, date of contact, etc.  You can then create a schedule (daily, weekly, monthly, etc.) of when you will call each of these organized categories.  Breaking it down systematically like this ensures that you are in fact following up with every single lead, and keeping those bridges between you and your customers up and running.  Just because you have completed a sale, does not mean your relationship has to be over. It really should only be the beginning.

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http://www.indianainvestmentpropertygroup.com

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There is never a shortage of investors, young or otherwise, that are looking to get their start in real estate.  There are plenty of success stories and the allure of working a job on your own time and terms, where there is no cap on your income potential, is very attractive.  But for every success story, there must be 1,000 failures—those who never made it past their first or second investment.  In most cases, early failures can be avoided by simply doing the proper research, and navigating away from some of the more common mistakes.

The first great error made by new investors is one of mentality.  Real estate is no longer the kind of market and industry that allows you to throw some money in any random direction, shut your eyes, and wind up with a 1,000% profit.  For a long time, it was safe to assume that, considering the rapid growth in our nation’s cities and suburbs, any piece of property you purchased was sure to be more valuable 5, 10, and certainly 20 years down the road.  Now, in a struggling economy that sees financial institutions in the straits, and homeowners and renters strapped for cash, it is not such a sure bet.  Today’s real estate game is not about riding a wave of appreciation, but rather about finding good individual deals.  This can only be done with diligence—consistently generating and following up on leads, crunching numbers, and making good decisions.

Finding good deals—properties which you are absolutely certain can be purchased (and probably repaired) for at least 10% below the retail market value of that property—is a recession-proof investment strategy.  In tough times, like all other opportunities to profit, finding good deals becomes more competitive; more people looking for fewer deals.  But desperate sellers lead to creative financing opportunities, and never underestimate the power of less money now (versus more money later).  You can find or create deals in any economy.

It follows that the second major error to avoid is investing blindly in a property.  This means just reading the price tag and signing your name, without a thorough knowledge of the property’s problems and equity, where it will cost you money, and where it bears the potential to earn you income.  Do your research; hire a credible appraiser and contractor, and know what you’re buying.  Risk is inversely proportional to knowledge.

Foresight generally derives from knowledge and understanding.  Now, with a thorough understanding of what you are getting into with your investment, you should have a concept of cash flow.  Cash flow kills new investors, because when the chips are down, start-up investors with no cash reserves are forced into very sticky situations (reduced rates, improper maintenance and repair, etc.).  The key is to have some back-up cash prepared for the tough times, so when they hit you are prepared to maintain your investments and hold out for better times.  Sometimes it’s better to take bigger loans, even when you have your own cash, to finance investments, just so that you have a contingency plan in the bank.  It might hurt your wallet some (as the tough times always do), but it will save you from ruin.

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http://www.indianainvestmentpropertygroup.com

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Based out of Indiana, Jay Redding is a real estate entrepreneur, consultant and educator with experience in residential and commercial investing.

Thinking with one’s emotions is rarely—if ever—a reliable way to earn a profit, in any industry.  In real estate specifically, trends tend to be more pronounced because any associated data relies heavily on a small number of very large transactions (as opposed to, say, the data pertaining to grocery store sales).  This means that any feature of a normal business transaction is going to be expanded and multiplied in a real estate transaction, where more money, more time, and therefore more emotions, are at stake.

When I say thinking emotionally, what I really mean is relying too heavily on whether or not you like the property, as opposed to whether or not this is the rightproperty for you.  For the first-time investor or home-buyer, perhaps the sheer excitement of going through the process for the first time will be enough to skew your opinions of the home.  Remember one thing: the first place you look at will only very rarely be the best option for you.  In order to make savvy business decisions that will result in profit rather than loss, you should expect to turn down far more offers  than you accept, which means you can pretty much expect that if you take 50 tours, the first one is not necessarily going to be the best one.

With that logic in mind, be wary of every tour, at every step of the way.  If you are excited about moving or home-ownership or the start of an investment career, remind yourself to look for reasons not to purchase the home, rather than the reasons to do so.  In any house you look at, you will find plenty of reasons to buy it.  Maybe you will imagine the color of the walls, or the arrangement of the furniture, or what it will look like with 3 kids and a dog running around.  These are dangerous sentiments, which all speak to an emotional involvement in your decision-making process.

Instead of the walls, furniture, and kids, why don’t you spend some time and energy coming up with all the features of the house that are going to inevitably result in not only a hassle for you, but also a significant cost.  Repairs, modifications, and updates are the big ones.  You almost never see a house sold in perfect, up-to-date condition, and it is of vital financial importance to know what you’re getting into before you sign the contract.  Basically, as you look at properties, try to talk yourself out of buying it.  You should be able to.  When you absolutely can’t come up with an argument against the property, and you are confident that is not the result of some arbitrary emotional attachment to the property, then you have found the right deal to pursue, and your next (or first) investment property!

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There is a class of investors out there who believe that, because they are investors and not lawyers, they don’t need to trouble themselves with the details of the real estate contract.  These investors couldn’t be more wrong.  The contract is what lays out exactly what you are buying, what you are bound to, and what is owed to you.  It is essential to know exactly what you are getting into on every deal that you make, so that you can plan accordingly and protect your profit margin.  The good news is, the real estate contract is pretty standard, simple, and easy to navigate and understand.  In simple terms, here is an explanation of a basic real estate contract.

The contract will clearly identify both (or all) parties involved, as well as the property in question.  This means an address and description of the property.  The main ingredient in the contract brew is mutual agreement, whereby both or all parties agree to the same terms of a deal, following an offer, usually a counteroffer, and finally acceptance of terms.  These must all be clearly laid out in the contract.

In addition to identifying parties and mutual agreement, here are some other elements which all real estate contracts should and in fact must possess.  It must be in writing in order to be enforceable.  An oral agreement is nice, but unfortunately if things go south, then the victimized party will be out of luck trying to cite the contract is binding.

A price for the property must be stipulated.  This does not necessarily mean a number of dollars that the buyer must pay (although it could); rather, it has to point to a value which can be reasonably ascertained at a later date, such as an appraisal value.  This, like everything else in the contract, must be as specific as possible: not just “an appraisal value”, but a specific appraisal done by an agreed-upon appraiser at an agreed-upon time.

Usually, a contract will include some consideration.  Consideration is essentially the value of the agreement itself (as opposed to the transaction), and it comes in the form of a small good-faith fee paid by the buyer to instill confidence in both parties.

Finally, signatures are required, as in all contracts.  No third parties or notaries have to be used, but both parties (or representatives thereof) must ink the contract.  Beyond that, it’s just about filling in the particular details of your transaction.  As stated above, the real estate contract is standard and simple, but you need to know what you are looking for when reviewing a contract.

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http://www.indianainvestmentpropertygroup.com

http://www.practicallyfreehouses.com

Based out of Indiana, Jay Redding is a real estate entrepreneur, consultant and educator with experience in residential and commercial investing.