The guide in Investing in real estate
As you may know some of the world's richest people have made their fortunes by investing in real estate. For a lot of people investing in real estate is a dream. This article is meant to help those who dream of the good life brought through investing in real estate. I have to say from the start that it take a lot of time and work to be successful as a Real Estate investor, then before investing in real estate you most ask yourself :are you a long or short term investor? you should thing if you want to buy a property repair it make it more valuable and sell it or if you want to keep the property, rent it, and go for the long term investment potential?
If your mind is set on investing in real estate my advice is to go ahead and do it because investing in real estate is not a bad way to live your live!
Going for the short term investing then know that investing in real estate like this is a great way to make profit just because the numbers are so high. For example if you buy a 100$ bottle of wine and resell it for 125$ you made 25$ but if you buy a property with 30.000$ in need of repair, then fix it with 7.000% and sell it for 48.000$ you've just made a profit of 11.000$
Investing in real estate on the long term? You will have to pay some taxes for your property but if you rent it your tenants will make your payments for you! Plus there may be tax advantages available to you when you deal in a long term Real Estate Investment. Even though these advantages are limited they can by quite useful sometimes so I recommend consulting a tax or legal professional to see how this would apply in your case.
Investing in real estate is a great way to earn money and if done properly you can actually quit your job and just live the rest of your life off the income from your investment properties.
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The Microwave Approach to Investing
We live in a society obsessed with a microwave approach to life. We want what we want and we want it NOW! No doubt, we're impatient. So how do you and I cope with our desire for instant gratification?
Sure enough, we want it right now. Instant breakfast. Fast food lunches. Three minute dinners. I'm even guilty of doing something surely none of you has ever done. I've screamed at our microwave because it's taken too long to warm up my cup of coffee.
Some people, especially those new to real estate investing, have not been spared by this infectious "I want it now" mentality. Satellite dishes, cable, the Internet, pagers, cell phones, fax machines and, of course, email. Is it any wonder they just naturally expect to achieve instant results? It's become a way of life.
Then they get involved in the wonderful wacky world of real estate investing. Not surprisingly, they expect private lenders to line up at their doorsteps. Realtors should immediately find them the houses they're looking for. They want overnight success. They expect to become wildly wealthy after purchasing just a few houses. They want to become successful with no effort and no risk.
Heck, why not? After all, everything must be done instantly - now.
Well, not exactly. If you're just getting started as a real estate investor, it's critical that you reject this notion of "instant gratification." If you're searching for the "shortcut to success", the "magic key to open the real estate treasure chest", or the "instant wealth pill" to propel you over the top, you're setting yourself up for a huge disappointment and inevitable failure.
Realistically, can you have all the money you need to finance your deals? Yes.
Can you have realtors referring to you the right properties at the right price? Yes.
More importantly, can you become wealthy as a real estate investor? Yes.
But let me share a little secret with you. There is a price to be paid because there really are no shortcuts.
People who pursue success as real estate investors must have passion, perseverance, persistence, and most importantly, patience. It takes a lot of patience to really succeed as a real estate investor. Just ask anyone who's made it.
Most of us know that patience is important in life and is a respectable quality and virtue to possess, so why is it such a rare virtue? Because we're afflicted with impatience and don't want to wait for our desired outcome or result.
But those investors that are able to rehab their minds and achieve patience can and do achieve success. Patience is a state of mind. I can just hear you saying in a very lively way as you read this, "But I don't have any patience." Well, patience can be developed.
Here's some tips on how you can acquire a capacity for patience.
See the big picture.
Put things in perspective. I recently had a birthday and I had to renew my driver's license. So there I was in this long line at the department of motor vehicles waiting for over an hour to get my drivers license renewed. I was getting very impatient. But then I realized that renewing my license is something I need to do just once every five years. Waiting one hour for the privilege of being able to enjoy the freedom of driving for five years is not a bad deal.
Think long term.
Impatience is usually the result of shortsightedness and focusing only on the now. If I discipline myself to make four phone calls a day or twenty a week, I will be able to find motivated sellers. If I'm able to purchase just one house per month from motivated sellers, I will purchase twelve in one year. So what if you don't purchase a house in a couple of days? But where will you be a year from now if you continue to make the daily phone calls?
Focus your mind on the right things.
When you are impatient, you are only impatient because of what you are focusing on or thinking about. Be a positive thinker. Do not focus on the fact that you're having to make 20 phone calls a week; rather focus on the positive result you want to achieve - buying a house.
Waiting adds value to the reward.
My dad always knew I was cursed with impatience, so he always reminded me of the old adage that says, "Good things come to those who wait". Success itself is one of the greatest examples of this. Real success takes time, and therefore takes patience.
Avoid comparison.
Impatience is usually the result of making faulty comparisons. If another investor has reached a level of success that you desire, realize that he or she has already paid a price. Instead, you will probably compare your worst virtues to another investor's best virtues. Really, don't go there. Instead, decide to do what the other investor has done. Pay the price.
It is not easy to practice patience, but those investors that are able to master patience are able to master the art of real estate investing. Patience can be learned like any other skill. The microwave approach to successful investing dies hard, but lasting success requires that a real estate investor practice patience.
Lee Salinas is a full time real estate investor. After losing his mid management job in June 2002, Lee decided to become a real estate investor. In three years, he has purchased over 140 properties and authored a business plan for real estate investors. The real estate business plan is available at his website - http://www.realestatebizplan.com
The Most Important Thing You Need To Know About Investing
The Most Important Thing That You Need To Know About Investing
That is a very grand title for a newsletter. But, I kid you not, what I am going to discuss this month is a rather overlooked but massively important factor in the success or failure of an investment strategy.
Every serious investor has thought through this element of 'the game'. Quite simply, if they have not, they are not.
So what can be this important?
SELLING.
Simple, huh?
Of course it is. When it comes down to it, most things in life are really quite simple. So is this. But, oh-so overlooked.
If you begin to study investment as either a hobby, an intellectual pursuit or a profession, you will find massive quantities of books that can guide you. I know, I have quite a few of them. However, the majority will help you to choose an investment. Stock or fund picking is a vital element in the investment process.
But, selling is where the profits are. After all, if you never sell, you never really make a 'real' profit, it is just a theoretical one. And theoretical profits do not pay the bills.
Years ago, I used to know a semi-retired farmer in the UK. He was a nice guy who had sold a pig farm whilst it was profitable and was living on his large 'capital'. He found investing to be more regular as an income source! (At least that is what he said.) Without trying to be mean, he wasn't the sharpest knife in the drawer and his investments backed my theory up.
The first time I was invited to his house he delighted in firing up his pc to show off his investment software and display to me his 'portfolio'. At the time he had holdings in about 100 different UK listed companies. But, about 70% of these holdings were losing money! I was amazed. He had boasted to me that he had 'never made a loss on a share'. Being unable to resist, I quizzed him relentlessly that evening until I found an answer I believed.
The truth was that he had bought all these shares but had NEVER actually sold one. He had not made 'a loss' because he didn't turn the shares back into cash. It also meant that he had never actually made a profit either but he neglected to mention that...
As you might be realising, this did not make him a good investor. He had not figured out how to either buy or sell shares. It was all pure dumb luck either way! When you also consider that I am talking about perhaps 1996 or 1997, towards the end of the greatest share bull market of all time, he was doing worse than pure dumb luck!! During the world's most profitable period for investment EVER, he had found a way to lose money consistently. That takes real skill.
Most people that invest money will never make the kind of errors of judgement that this man made. Most people will never have the money available to lose and it not alter their lifestyle. That may be a blessing in disguise!
With hindsight, as I got to know him better, I began to realise that he was actually a gambler at heart ... horses, cards, shares, spoof (though I never figured out the rules to that) and I'm sure more that I wasn't aware of.
However, most of us are not gamblers. We have some spare money and we want to invest it for the future. Hopefully, it will grow into something more substantial for when we need it. Perhaps it will pay for a child's education or our retirement. Whatever.
The issue that you need to think about when making an investment is when to sell up. The reason is quite simple, it is all about discipline. Even the best companies go through bad times. The course of a business cycle virtually guarantees this. We however, want to be selling during the good times for a profit, not holding on until it is too late for a loss.
Some investors have a preset figure in their mind - when the price is xx I'll sell. Others use a stop-loss system, or better yet, a trailing stop-loss. Each has a place in the investment world.
Alas, we can't all behave like Warren Buffett and buy with the intention of holding 'forever'. Firstly, he is better at this than us. Secondly, he tries to buy a business whole, which is probably out of your reach (I know it is out of mine!). And lastly, though I know he will hate to make a loss more than most other people, if it all goes wrong, he can afford it. His life will not be ruined by losing money (and he has been so successful that even his reputation is unlikely to be ruined).
Just remember that the simplest formula for making money in an investment is to 'Buy low and sell high'. Easy stuff. But when things are high, you need to remember to sell. Don't let greed get the better of you.
It has happened to me and probably every investor who ever lived. He or she held on too long and turned a decent profit into a sickening loss.
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