Check out the new Fannie Mae lending rules for investors. It's good for you!
Click here to read all about it.
Basically,
Now investors can hold 5-10 mortgages and still get Fannie Mae backed loans. This apparently will start as of 3/1/2009 and will be announced on Monday 2/9/2009. The reserve and qualifying criteria for the 5-10 loan range will be more stringent, as well as the down payment requirements but this is great news for the investors out there.
Monday, February 9, 2009
Monday, February 2, 2009
BUSINESS PLAN
Do you have a business plan in place? The reason for a business plan
became evident in a study done at an Ivy League university. They asked
their graduating class how many of them had written down their goals.
Only 5% of the class raised their hands. The other 95% of the class had not
written down their goals. (Keep in mind this is an Ivy League college.)
This was a well-known and very prestigious college, yet many of the
students had not written down their goals.
The university tracked these students over the next several years. When it
looked at their net worth later on, the 5% who wrote down their goals were
worth more than the other 95% combined. That’s the power of writing
down your plan. Get your plan made. I will not take the time in here to
cover all of the sections of a business plan. The information is readily
available on the Internet, so I will speak in generality.
Your plan may be to invest in rundown properties, fix them up, and sell
them (known as flipping and it is done all over the world). In planning for
flipping properties, remember to review your personal strengths and
weaknesses. Your strategy should be in harmony with your attitude and
risk tolerance. Capitalize on your strengths. You need to be completely
honest with yourself on your strengths and weaknesses; write them down
as part of your plan.
You need to have a system because real estate is quantifiable and it’s
systematic. Systematic means you can continuously repeat a process.
Having someone who can create systems was critical for me, and Trond
was perfect because he was good at creating systems, while it was one of
my weaknesses. I also knew Trond had some weaknesses that would offset
my strengths. We used that as one of the building blocks when we formed
our partnership. We set it up to ensure that both of us would accept the
risks. We know that we have our own core motivations.
By enrolling in the RES Academy, taking the classes, and reading this blog you
have proven that you want to do something about your situation; you want
to invest in your future. That’s exactly what you’ve done; you invested in
your future much like someone will spend $30,000, $40,000, or $50,000
to go to college; it’s the same thing. You expect a return on this investment
in your future.
Your personality is going to define the type of risks you are willing to
accept. You need to create a written plan, one which will help you follow
the right strategies. This will help you get rid of some of the unnecessary
risks and allow only calculated risks. You need to do this to be able to take
the risks that you can handle. These risks will enable you to invest in your
future and reap the profits and benefits. We are at a point that we
understand risk and, more importantly, understand how to mitigate it.
became evident in a study done at an Ivy League university. They asked
their graduating class how many of them had written down their goals.
Only 5% of the class raised their hands. The other 95% of the class had not
written down their goals. (Keep in mind this is an Ivy League college.)
This was a well-known and very prestigious college, yet many of the
students had not written down their goals.
The university tracked these students over the next several years. When it
looked at their net worth later on, the 5% who wrote down their goals were
worth more than the other 95% combined. That’s the power of writing
down your plan. Get your plan made. I will not take the time in here to
cover all of the sections of a business plan. The information is readily
available on the Internet, so I will speak in generality.
Your plan may be to invest in rundown properties, fix them up, and sell
them (known as flipping and it is done all over the world). In planning for
flipping properties, remember to review your personal strengths and
weaknesses. Your strategy should be in harmony with your attitude and
risk tolerance. Capitalize on your strengths. You need to be completely
honest with yourself on your strengths and weaknesses; write them down
as part of your plan.
You need to have a system because real estate is quantifiable and it’s
systematic. Systematic means you can continuously repeat a process.
Having someone who can create systems was critical for me, and Trond
was perfect because he was good at creating systems, while it was one of
my weaknesses. I also knew Trond had some weaknesses that would offset
my strengths. We used that as one of the building blocks when we formed
our partnership. We set it up to ensure that both of us would accept the
risks. We know that we have our own core motivations.
By enrolling in the RES Academy, taking the classes, and reading this blog you
have proven that you want to do something about your situation; you want
to invest in your future. That’s exactly what you’ve done; you invested in
your future much like someone will spend $30,000, $40,000, or $50,000
to go to college; it’s the same thing. You expect a return on this investment
in your future.
Your personality is going to define the type of risks you are willing to
accept. You need to create a written plan, one which will help you follow
the right strategies. This will help you get rid of some of the unnecessary
risks and allow only calculated risks. You need to do this to be able to take
the risks that you can handle. These risks will enable you to invest in your
future and reap the profits and benefits. We are at a point that we
understand risk and, more importantly, understand how to mitigate it.
Tuesday, January 27, 2009
Bad Partnerships
There is an old saying that says, "The only ship that is guaranteed to sink is a Partnership". Obviously, that is not the case in all partnerships. However, you may have been in a bad partnership that did not work out. Most
partnerships do not work out for a number of reasons. I work very well
with my partners. I think we will continue to work together for the rest of
our lives. But there is one main reason why, and it is because of the way
we analyze our partnership.
The next thing we are going to look at is why most partnerships fail. Most
partnerships fail because of how we enter them, or how they start.
Investors come in and they think, “Johnny is my little brother and he wants
to get into real estate. He has had these dreams and aspirations and we are
going in together. He does not really have much of anything and only
makes $7 an hour at McDonald’s. He is going to be a great partner for me
because he is willing to work, he is willing to do it and bring that attitude
to our partnership.”
First problem: you have not looked at it analytically. You have not looked
at your strengths and weaknesses and been honest with yourself. You have
not looked at his strengths and weaknesses and been honest with him. You
have not said, “Do we compliment each other?” When you are looking at
partnerships, the value your partner brings is something you need to find
out and remember. The value added to a partnership is a core component.
Why do I bring up partnerships? Your reaction is, “I bought the program
and I’m doing it by myself.” Great; but there will come a time in real estate
investing – because of the mass and the quantity and the amount of money
involved – that you will need partnerships. For those of you who have little
money to start with, you are going to need a partnership to get you off the
ground.
You need to look at what the value is for a partnership. You need to look
at it analytically:
• Are we forming the right type of partnership?
• Are you complimenting my strengths?
• Are you filling in my weakness?
• Are you just going to ride on my shoulders the entire time?
I promise that if you enter a partnership where your partners ride on your
shoulders the whole time, it will not work. You are going to feel
overburdened; you are going to feel unappreciated and you are going to
hate what you are doing to the point that it may force you out of real estate
investing altogether.
You need to understand what your strengths and weaknesses are. And
remember, you need to understand what you are going to do and you need
to do it despite the negative energy out there; despite all the negativity that
everyone is going to give you. You may hear that little devil sitting on your
shoulder telling you that you are not good enough. You are not smart
enough. Why are you doing this? You are going to lose everything. You
will be defeated.
Don’t listen. You need to move forward.
The other reason why partnerships fail is because of one word: greed. Yes,
greed will kill any investment; it will kill any partnership; and it will take
away any added value and destroy everything you’ve built. Check yourself
with your greed. By this I mean that you need to make sure that people are
not going to be greedy.
Write down the details of your partnership. Get everything in writing and
ensure that you follow those details exactly. Become integral in what you
do, be honest with what you say, and move forward. Do not let greed
overpower you, try to trick you, or destroy a good thing.
Now that we have talked about how to understand yourself, your core
motivations, and investor dilemma and risk, let’s sum it up like this:
Remember that you are... The captain of your future.
You can be successful no matter what anyone tells you; I am living proof.
If I can do it, anyone can. I really believe that. Believe it yourself. Take
advantage of everything we have to offer at the Academy. Take advantage
of our knowledge. Make goals– set them and do them. Move forward.
We are excited that you are on this journey with us. We are excited for the
journey you are about to embark on. Be positive about it and have a joyful
journey.
partnerships do not work out for a number of reasons. I work very well
with my partners. I think we will continue to work together for the rest of
our lives. But there is one main reason why, and it is because of the way
we analyze our partnership.
The next thing we are going to look at is why most partnerships fail. Most
partnerships fail because of how we enter them, or how they start.
Investors come in and they think, “Johnny is my little brother and he wants
to get into real estate. He has had these dreams and aspirations and we are
going in together. He does not really have much of anything and only
makes $7 an hour at McDonald’s. He is going to be a great partner for me
because he is willing to work, he is willing to do it and bring that attitude
to our partnership.”
First problem: you have not looked at it analytically. You have not looked
at your strengths and weaknesses and been honest with yourself. You have
not looked at his strengths and weaknesses and been honest with him. You
have not said, “Do we compliment each other?” When you are looking at
partnerships, the value your partner brings is something you need to find
out and remember. The value added to a partnership is a core component.
Why do I bring up partnerships? Your reaction is, “I bought the program
and I’m doing it by myself.” Great; but there will come a time in real estate
investing – because of the mass and the quantity and the amount of money
involved – that you will need partnerships. For those of you who have little
money to start with, you are going to need a partnership to get you off the
ground.
You need to look at what the value is for a partnership. You need to look
at it analytically:
• Are we forming the right type of partnership?
• Are you complimenting my strengths?
• Are you filling in my weakness?
• Are you just going to ride on my shoulders the entire time?
I promise that if you enter a partnership where your partners ride on your
shoulders the whole time, it will not work. You are going to feel
overburdened; you are going to feel unappreciated and you are going to
hate what you are doing to the point that it may force you out of real estate
investing altogether.
You need to understand what your strengths and weaknesses are. And
remember, you need to understand what you are going to do and you need
to do it despite the negative energy out there; despite all the negativity that
everyone is going to give you. You may hear that little devil sitting on your
shoulder telling you that you are not good enough. You are not smart
enough. Why are you doing this? You are going to lose everything. You
will be defeated.
Don’t listen. You need to move forward.
The other reason why partnerships fail is because of one word: greed. Yes,
greed will kill any investment; it will kill any partnership; and it will take
away any added value and destroy everything you’ve built. Check yourself
with your greed. By this I mean that you need to make sure that people are
not going to be greedy.
Write down the details of your partnership. Get everything in writing and
ensure that you follow those details exactly. Become integral in what you
do, be honest with what you say, and move forward. Do not let greed
overpower you, try to trick you, or destroy a good thing.
Now that we have talked about how to understand yourself, your core
motivations, and investor dilemma and risk, let’s sum it up like this:
Remember that you are... The captain of your future.
You can be successful no matter what anyone tells you; I am living proof.
If I can do it, anyone can. I really believe that. Believe it yourself. Take
advantage of everything we have to offer at the Academy. Take advantage
of our knowledge. Make goals– set them and do them. Move forward.
We are excited that you are on this journey with us. We are excited for the
journey you are about to embark on. Be positive about it and have a joyful
journey.
Friday, January 23, 2009
Partnerships: To be or not to be
The last thing we want to talk about in investor dilemma is partnerships.
The reason I bring up partnerships is this: Many people start investing in
real estate and they say, “You know what? I’m going to form a partnership
because I need some help.”
When you get into real estate, you are going to have many different types
of partnerships. Some projects are simply too big to handle alone, and that
is when you need to bring in additional staff and resources. Partnerships in
and of themselves are not good or bad. Let me explain. At least once a
week someone comes to my office looking for advice to form a
partnership. It may be a partnership between a father and a son. I often ask
why they are forming a partnership. A typical answer is, “Well, I want to
help my son out. I want to help him become successful.” Okay, fantastic!
But are you successful? Well if the father is not successful, it’s probably
not a smart partnership.
Many people form partnerships on the simple grounds of “Hey, this is my
buddy, and I would love to see him be successful with me.” The number
one thing you have to remember with partnerships is this: never drag
someone along with you. A partner is either going to walk side-by-side
with you or he/she shouldn’t come on the journey... period! Partners
shouldn’t ride on your back; they shouldn’t be dragged along. They
shouldn’t be part of the ride unless they are contributing side-by-side with
you. That’s difficult to understand when you are looking at partnerships,
especially when you bring in family. And you hear of this all the time; but
when it happens, partnerships fail.
Working with family is rarely a good thing. Everyone starts out with good
intentions. “Oh, we want to help out. We want to help our little brother
Johnny become responsible and to grow up a little bit.” That is theabsolutely worst reason to form a partnership. When you are searching for
a partner, you need someone who compliments your strengths and fills in
your weaknesses.
My current partnerships are based on competency. I have a partner by the
name of Trond. He fills in my weaknesses and compliments my strengths.
I do the same for him. I have another partner, Frantz. He is extremely
organized and proactive. Nothing can stop the guy... he is absolutely
dependable.
My partnerships have been fantastic; everybody contributes. They have all
been part of a fair partnership from the beginning. Understanding
partnerships is critical to you and your partner’s success. The only reason
why I bring up partnerships regarding investor dilemma is because in real
estate partnerships come into play all the time.
If you are going to form a partnership, be honest with yourself. Ask
yourself, “Is this person really going to help or am I dragging him/her
along?” What does each partner bring to the table? This is where you need
to look at the strengths and weaknesses of each partner and see if they
compliment each other. Also, remember the partnership needs to add
value, just like everything else in investing. In certain types of real estate
investing, like when working in large volume, you will need a partnership
to get off the ground.
Monday we will talk about what happens for when you have a bad partnership?
The reason I bring up partnerships is this: Many people start investing in
real estate and they say, “You know what? I’m going to form a partnership
because I need some help.”
When you get into real estate, you are going to have many different types
of partnerships. Some projects are simply too big to handle alone, and that
is when you need to bring in additional staff and resources. Partnerships in
and of themselves are not good or bad. Let me explain. At least once a
week someone comes to my office looking for advice to form a
partnership. It may be a partnership between a father and a son. I often ask
why they are forming a partnership. A typical answer is, “Well, I want to
help my son out. I want to help him become successful.” Okay, fantastic!
But are you successful? Well if the father is not successful, it’s probably
not a smart partnership.
Many people form partnerships on the simple grounds of “Hey, this is my
buddy, and I would love to see him be successful with me.” The number
one thing you have to remember with partnerships is this: never drag
someone along with you. A partner is either going to walk side-by-side
with you or he/she shouldn’t come on the journey... period! Partners
shouldn’t ride on your back; they shouldn’t be dragged along. They
shouldn’t be part of the ride unless they are contributing side-by-side with
you. That’s difficult to understand when you are looking at partnerships,
especially when you bring in family. And you hear of this all the time; but
when it happens, partnerships fail.
Working with family is rarely a good thing. Everyone starts out with good
intentions. “Oh, we want to help out. We want to help our little brother
Johnny become responsible and to grow up a little bit.” That is theabsolutely worst reason to form a partnership. When you are searching for
a partner, you need someone who compliments your strengths and fills in
your weaknesses.
My current partnerships are based on competency. I have a partner by the
name of Trond. He fills in my weaknesses and compliments my strengths.
I do the same for him. I have another partner, Frantz. He is extremely
organized and proactive. Nothing can stop the guy... he is absolutely
dependable.
My partnerships have been fantastic; everybody contributes. They have all
been part of a fair partnership from the beginning. Understanding
partnerships is critical to you and your partner’s success. The only reason
why I bring up partnerships regarding investor dilemma is because in real
estate partnerships come into play all the time.
If you are going to form a partnership, be honest with yourself. Ask
yourself, “Is this person really going to help or am I dragging him/her
along?” What does each partner bring to the table? This is where you need
to look at the strengths and weaknesses of each partner and see if they
compliment each other. Also, remember the partnership needs to add
value, just like everything else in investing. In certain types of real estate
investing, like when working in large volume, you will need a partnership
to get off the ground.
Monday we will talk about what happens for when you have a bad partnership?
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