Archive for October, 2013

Choosing the Road to Wealth

More people are becoming millionaires today than ever before in the real estate business. So what makes these wealthy entrepreneurs so different? They chose the road to wealth and real estate as the vehicle to get there.

When choosing the road to wealth, there are some important distinctions that set the truly successful people apart from everyone else. Some of these include the ability to visualize a specific outcome, pursuit of a dream, constant motion and a relentless determination to reach the goal. Giving up is not an option. Like the saying goes, “Quitters never win; winners never quit!” 

I have found in the real estate business that there are two kinds of people, the “doers” and the “wannabes”.  There are truly focused folks who get up every morning with a clear and defined direction who want to make their business work no matter what it takes. They pursue their dream relentlessly and continue to grow on a daily basis, garnering all the education they can along the way to take them even further along in their business. 

Then there are the people who go to seminars or buy books and tapes and do absolutely nothing with them once they get them home. I have personally witnessed this over and over again.  They have one excuse after another why they can’t do this business.  For them, the status quo is the easy way in any situation.

I used to be one of those people who did absolutely nothing. I continued to work day after day at a job I hated, and I had every excuse there was for not getting started in the real estate business.  So I can relate. You could say, “I’ve been there, done that.”

There were three main things that held me back: 

  1. Lack of focus.
  2. A true desire.
  3. Abundance of fear.

You can absolutely tame all three. I am living proof that you can. The biggest change that occurred for me finally was the desire to succeed.  An even greater desire was to get back all the money I had spent on courses and seminars.  As I always say, “Whatever it takes to make you move forward!”

I discovered there were some very easy ways to get focused and get on track.  One was to define the specific reason I wanted to succeed.  For me it was to get back the money I had already spent on educational materials and to get rid of a job I hated.  At the time, my job entailed being on the road for long periods each week which resulted in my not being home much, something I very much wanted to change.  I spent many years in a “dead-end job” making a lot of money for other people.

For you, it may be putting money away for your kid’s education, taking a trip you’ve always wanted to take or maybe becoming involved in charities you want to support. Whatever that reason is for you, commit it to paper and out loud to those around you. There is nothing I know that will force you to take action more than committing to a goal out loud. Become persistent in the realization of your dream. Use the knowledge you already have and move forward from that point.

Visualize your success!  Every extraordinary, successful person has visualized their success in their mind and then on paper first.  Their dreams were put into action, resulting in a reality of success.  Bottom line, this is the outline of the road to wealth.  Unfortunately, most people get stuck in the “dreams” part of that road to wealth. 

Enlist the help of your local real estate club or a mentor to stay on track. If there isn’t a real estate club where you live, contact other investors in your area and form your own group. This is a great way to network and get the support you need. I had a mentor early on in my business and I attended meetings of our local real estate club on a regular basis. I found this to be a great way to stay focused and excited about the real estate business.  I continued to work with other investors in my area who were already doing the business. 

If people around you are telling you it won’t work, don’t let them “steal your dreams”. Only you can make the decision to be financially free. I know that lots of my friends and family members thought I was crazy to want to do this business. I’m glad I didn’t listen! Hang around with like-minded people, wherever you can find them. Learn from people more successful than you.  Hang around with people who make more money than you do. Decide what it is you want to do for your business on a daily basis and implement a plan of attack. 

Enlist the help and support of your spouse and children or a partner while growing your real estate business. There are lots of things they can do to help and you’ll achieve a feeling of team work which will keep you moving forward. Write a specific list of goals you want to achieve, no matter how small. Set goals for tomorrow, next week, next month, next year. This is one way to create a road map you can follow toward attaining your goals and growing your real estate business. 

Do whatever it is you need to do to keep moving in a positive, forward direction. Don’t let the “naysayers” get you down. They just want to keep you where they are. Don’t take advice from anyone who makes less money than you do. You have a right to live the kind of life you want, so be willing to do what it takes to attain it. 

Real estate is one of the best ways I know to grow wealth quickly. If you believe you can’t change your attitude about the opportunity to create wealth through real estate, I assure you that you can. You just have to make the decision to choose the road to wealth.

That road to wealth is to stay focused and to never give up.  Success can be yours… today!

Kathy KennebrookKathy Kennebrook is a speaker, author and has been actively investing in real estate since 1999, Kathy currently resides in Bradenton, FL and is known as the “Marketing Magic Lady” because she is the country’s leading real estate marketing expert on finding motivated sellers using direct mail.

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Making the Impossible Deals Possible

A realtor asked me to talk about a real-world example of a recent deal we did that demonstrates how we make impossible deals possible.  No problem, but I ask one favor: As I describe the homeowner’s situation, BEFORE you read how we structured the deal, think about how YOU would have done it!

The seller had a three-bedroom, two-bath home in Acworth, Georgia.  The property needed zero work – it was beautiful!  Fair market value was $60,000.  His mortgage balance was $92,000 – making him $32,000 upside-down in the property.  The home would rent for $850 per month.  His mortgage payment was $925 per month – a $75 negative cash flow.  At the time, the home was vacant and costing the owner over $1,000 per month.  The financial drain was killing him.  One last thing: The owner HATED tenants!  His last two tenants all but destroyed his investment property.

The owner just wanted done, but he wouldn’t consider doing a short sale or letting the home go back to the bank.

Can you make this impossible deal possible?  What if I told you that structured creatively, this deal will make you $200 per month, risk-free…with a tens-of-thousands-of-dollars bonus at the end?  Please take a few minutes to structure this deal. 

Here’s the agreement: Knowing that I could rent out the property for $845 a month, I leased the property from the seller for $645 per month.  I had the right to sublease the property to another tenant.  I would only pay the property owner rent if my tenant paid me rent.  I’m responsible for the first $50 of repairs each month, and the owner is responsible for the balance of repairs.

I was able to find a great tenant within three weeks.  The owner went from losing $1,000 per month to only losing $280 per month ($925 mortgage payment – $645 rent = $280).  This gave him some immediate breathing room.

Next, I fought to lower the owner’s property taxes.  His yearly tax bill fell from $622 down to $351 – this saved him $271 in 2013 ($23 per month).

To lower his mortgage payment, I had him apply to the HARP program.  After a very short time, the lender approved his HARP application and lowered his payment from $925 to $648 per month. 

Bottom line: With this creative deal structure, the owner went from losing $1,000 per month on a house that gave him landlording migraine headaches, to a worry-free property making $25 per month – plus all the tax benefits a rental property spins off.  What a swing of fortune!

What did Kim and I get out of this deal?  We picked up an extra $200 per month in mailbox money.  Plus, the owner gave us an exclusive option to buy his property at some point in the future for the balance he owes on his mortgage at the time we purchase.  So with this deal, Kim and I captured amortization, appreciation, management fees, income and profit. 

Not bad for a couple of hours of work, was it?

Folks, I wasn’t born knowing how to do this – creative deal structuring is a learned thing.  At our October real estate investors meeting, Dyches Boddiford (one of my long-time teachers) and I will be going over this deal – and others like it – in detail!

Bill & Kim CookBill & Kim Cook are a husband and wife real estate investing team. They live in Adairsville, Georgia and have been investing in real estate since 1995. They specialize in buying single-family homes, mobile homes and mobile home parks. They also run North Georgia REIA and teach folks how to successfully invest in real estate.

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