cle covers six dynamite real estate investing tips intended to help anyone just getting started in real estate investing to successfully launch and hit the ground running with real estate investment property.

1. Develop the Correct Attitude

To stand a chance of succeeding at real estate investing, foremost, you must understand that real estate investment is a business, and you will become the CEO of that business.

As your first order of business, then, it’s crucial to develop the correct mind-set about investment real estate and be able to make this distinction between buying a home and investing in real estate:

“You buy a home to live and raise a family; you buy real estate investment property to pay for the home, live comfortably, and raise your family in style”

As one very successful real estate investor said, “Only women are beautiful, what are the numbers?” In other words, you will not succeed at real estate investing until you acknowledge that it’s not curb appeal, amenities, floor plan, or neighborhood that should turn you on or off to the investment opportunity; what counts most is the property’s financial performance.

2. Develop Meaningful Objectives

A meaningful set of (realistic) objectives that frames your investment strategy is one of the most important elements of successful investing. Yes, we may all desire to make millions of dollars from real estate investing, but fantasy is not the same as expressing specific goals and a method on how to achieve it.

Here are some suggestions:

How much cash are you willing to invest comfortably? What rate of return are you hoping to achieve by making the investment in real estate? Are you expecting instant cash flow, looking to make your money when the property is resold, or merely looking to achieve tax shelter benefits? How long are you planning to hold the property before you dispose of it? What amount of your own effort can you afford to contribute to the day-to-day operation of running the property? What net worth are you hoping investing will help you to achieve, and by when would you like to achieve it? What type of income property do you feel most comfortable owning, residential or commercial, or does it matter?

3. Develop Market Research

If you’re new to real estate investing, you undoubtedly know little about investment real estate in your local market. So, do market research to learn as much as you can about income property values, rents, and occupancy rates in your area. The better prepared you are, the more likely you are to recognize a good (or bad) deal when you see it.

Here are some good resources:

(a) The local newspaper, (b) A local appraiser, (c) The county tax assessor, (d) A qualified local real estate professional, (e) A local property management company

4. Run the Numbers

I can’t stress enough the importance of running the property’s cash flow, rates of return, and profitability numbers. Remember, real estate investing is a business, and as the CEO of your investment enterprise, you’ve got to know what you’re buying, especially if you’re trying to determine which of several investment opportunities would be the most profitable.

You have two options:

(a) Invest in real estate investment software. This will enable you to discover for yourself the investment property’s cash flow and rates of return, and create your own analysis reports. Plus, by running the numbers yourself, you gain a broader understanding of real estate investing nuances, and in turn might be less likely to fall victim to the wiles of someone with little concern about how you spend your money.

(b) At the very least, work with a real estate professional that has invested in real estate investment software and can calculate, present, and discuss the property’s financial data with you.

5. Develop a Relationship with a Qualified Real Estate Professional

Working with a qualified real estate professional is a great way for beginners to get started with rental property investing because an astute professional can acquaint you with local market conditions, recommend a property that meets your investing objectives, and discuss strengths and weaknesses about specific property performance.

Here’s a warning, however: Work with a real estate person who understands investment real estate.

Be sure the agent has a firm grip on key financial measures inherent to real estate investing, knows how to measure profitability and rate of return, has the ability to present the data you need to make wise investment decisions, and, most importantly, shows a genuine interest in how you spend your money. The last thing you want to do is to get involved with a real estate agent that would throw you under the bus just to make a commission.

Here’s a good way to interview for an agent. Ask them for the property’s cap rate and then request an APOD. If their response (even to these basics) is to stand there looking at you like a deer into the headlights of a car, find another agent.

6. Start Investing

Hopefully, this has given you some insight into real estate investing, highlighted a few things to make you a more prudent real estate investor, and perhaps alerted you to a couple of things that should be avoided.

Okay, that does it for us, now it’s time for you to get started. Here’s to your success.



By: James Kobzeff

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Oil prices have been surging. Housing markets have been dropping. Interest rates keep getting cut by the Fed in order to help curb the negative effects of possible recession. What happens if all of the current economic activity sends the US into an economic recession? Would you be prepared? Included in this article are several helpful tips and advice on ways to potentially avoid some of the pitfalls that occur as a result of a recession. But, as we all know, a recession is something that no one can ever be completely prepared for as it effects nearly everything that has anything to do with finance. That is, except for the few local towns that seem unaffected by the US economy, which is unusually rare.

Let’s say you are not an individual living in one of the local communities seemingly on a different route than the rest of the country such as the state of Idaho, which, in the government’s recent state-by-state GDP data, Idaho showed a 7.5% growth in GDP last year. How will you know when to be prepared? The answer is actually rather vague as no one can really predict precisely when and even if a recession will take place. In fact, many times we don’t even realize we are even in one until it has already set in. this uncertainty is exactly the reason why families and individuals should begin saving money today. Not a whole lot, but just enough money to get everyone through a good 6 months or so in case there should ever be any illness or job losses during these times, or any time in that matter.

Currently, in California one of the unions will be going on strike soon and everyone in the industry will soon be unable to work. What alternatives do they have, right? The suggestions I have heard right now in reference to those in need to financial advice are told: “make sure you have at least 6 months of money supply saved up.” Ok. That would be great, but, they just realized they were going to strike a couple of days ago. Now what? Damage control. This could all be prevented if the unprepared ones put together some sort of recession plan leading with a nest-egg of savings just to help stay afloat. This is obviously one of the most important factors. But, what if you are so strapped that it is nearly impossible to save that much at this time?

There are several other things a person can do in order to prepare for a downturn in the economy or industry. One very useful thing to do is to always keep your resume fresh. You really never know when you will need it. Also, try to always keep an eye on the job market even when you are indeed employed. Just this knowledge alone will help you find a job for yourself if the need ever should arise. In addition, this information will be extremely helpful to those just entering the industry or friends who need a hand in finding a job. This will only help you in the future if and when you should ever need a big favor from them. I have seen this situation occur many times in my industry and it is quite amazing what a little help towards others will do for your career. If you are investing currently, maybe consider taking some of the funds out of the stock market and into something like bonds. The reason is that bonds have always performed much better than stocks during a recessions in the past. This can be attributed to the lower amount of funds being borrowed during a recession leading to lower interest rates. And with lower interest rates come higher bond prices.

As I mentioned earlier, predicting a recession has always been a hazy subject. No one really knows if and when one will actually hit. This is why we all need to prepare for such occurrences. These days it seems to be quite a challenge to keep everything stable for a long period of time and keeping the things in this article in mind when considering options will help prevent the need for damage control if the event should ever arise. If you decide to get into more investment tools such as bonds and annuities, make sure you know all of the facts involved before paying any money. Many cases show that you could be paying the company much more than you think when you have money in such tools as annuities. Always do your research and compare all the different plans. The salesmen know all about them, so why shouldn’t you if it is your money going into owning them? So, always know your facts when planning for the future and try to become even more prepared than you were the day before even if it just means knowing what jobs are out there and keeping in the ‘loop’. Planting seeds will always eventually result in a harvest. For more information on Preparing for Recession, please visit http://www.SquarePeak.com.



By: S. Michael Windsor

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Why could the U.S. be heading into a recession? The most likely reason is the housing market- a multi-faceted subject. There’s the new home building sector.

It’s important because it employs so many people, not just in construction but, by extension, in the industries that supply materials to the homebuilders - lumber, concrete, appliances, and even retailers like Home Depot.

Think about all the “stuff” that goes into a home and how much you buy when you move. A slowdown (or collapse) in new home building has a ripple effect throughout the economy and could drive up the unemployment rate.

Housing market problems are not limited to new home sales. The value of your home and the market for sales of existing homes is falling. By how much and for how long is the big question. But the problem here is the equity we have in our homes is evaporating.

Even worse, those of us who have recently purchased homes or have taken money out of our homes, through refinancing or home equity loans, may have no equity left. A reduction in home values reduces homeowners net worth, causing them to pull back on spending.

The mortgage market mess is the last, but the not least, of the housing market issues. The big problem is not subprime mortgages, it’s adjustable rate mortgages. Bumps in mortgage payments due to contractual provisions or an increase due to a rising LIBOR rate - most mortgages are tied to this rate and it may rise even if interest rates fall in the U.S. - will force consumers to cut back spending in other areas. Lastly, will more stringent lending standards exacerbate the new home construction and/or existing home value problems?

There are other economic concerns as well - consumer spending (beyond the impact of the housing market), rising energy prices, the U.S. balance of trade deficit (are jobs being exported as a result?) So, if you’re concerned about the possibility of a recession, and who shouldn’t be, how do you invest?

The stock market, according to classical wisdom (or folklore) anticipates a recession by six to nine months. Since it’s currently at record highs (at least the Dow and S&P) this suggests a recession is not in the offing. But the market could change direction at any time. There’s a saying that the stock market has predicted ten of the last five recessions.

So maybe it’s not such a perfect predictor after all. The stock market also anticipates economic recoveries. Add to the mix the psychological difficulty of investing in stocks when things are the bleakest (the best time to buy) and it demonstrates the difficulty (impossibility, for most of us) of trying to time the market.

Most investors should be in the stock market to take advantage of growth in principal value and income which comes through the long term ownership of equities. Stocks which do best in recessions are those of the strongest companies and companies whose products consumers must keeping buying (think toilet paper not cars).

The stocks to focus on are big cap companies, consumer staple products and health care. There’s an overlap between many big cap stocks and consumer staples and health care companies. I’d also add to this list companies with significant international sales. (Did you know that a majority of McDonald’s, and many other U.S. companies, sales are overseas?) There’s also a substantial overlap between big cap and international sales. You can find many good mutual funds which focus on these areas.

Will this investment strategy provide a positive return during a recession? Not necessarily but it will keep you in the stock market with a minimum amount of risk and the long term investor will be well positioned if there is no recession or for the upturn in stocks after the recession occurs.

What about bonds, you ask. Don’t they do well during a recession? Yes, if interest rates decline as a result, but that may be occurring just when stocks are beginning to rally again.

With long term U.S. Treasuries yielding below 5% (some good money market accounts have higher yields) how much lower can interest rates go, so how much higher could bond prices go? Focus your risk-taking investments on the stock market and keep the rest of your capital in cash.



By: Bill Byrnes

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