Epic Professionals

Real Estate Investing Lead Generation’s 5 Commandments

Matt — Thu, 02 Feb 2012 05:38:13 +0000

Lead generation is the foundation of any successful business, and real estate investing is no different. Without leads… there are no customers, and without customers… there is no business. Generating the leads, however, is only half the battle. Sorting those leads is the next step in the process. Successful real estate investing comes down to knowing the difference between “opportunity” and “trouble,” and then taking action on the opportunity. Follow these 5 Lead Generation Commandments and knowing the difference will be a snap! The “taking action” part is up to you.

Memphis Project Continued

Matt — Tue, 17 Jan 2012 02:19:05 +0000

Ok… we’re off and running. After several hours on the phone with various departments of Memphis government, the City turned out to be a little more understanding than I thought. As the first lesson was “don’t assume anything,” the second lesson is “don’t overreact.” The City has released funds to our contractor and clean-up and construction has begun. As of right now, the tiny delay will be minor in the grand scheme of things. Now that the City is seemingly no longer an obstacle, the weather may be. It’s been too cold and wet the last few days for our team to work. Play the video below to see what they’ve done so far.

More to come…

Oh, the Epic Pro Academy is in the middle of its soft-launch. The official ‘pre-launch’ begins Thursday, but you can check it out now… real estate investing education.

Case Study – Working in Memphis

Matt — Wed, 04 Jan 2012 16:13:09 +0000

This blog and my podcast has taken a little bit of a back seat in the last few months as I’ve been out doing what I teach, investing in real estate. My latest project is a 14-unit multi-family building in Memphis, TN. It’s not my biggest purchase to date, however, it is my biggest project. You might be able to tell from the photos that I have my work cut out for me.

What was a three month escrow that seemingly had one hurdle after another to overcome, finally came to an end on December 28th. Just before the New Year, I took ownership of my first multi-family dwelling. The experience thus far has reminded me that regardless of how much we know, the wisest of us will always remain a student. In the last three months, this project has certainly doled out some lessons.

I thought this would be a good experience for you and I if I were to journal this project from beginning to end. There’s really no kind of education that beats “real world” experience. So, if you want to follow me along this journey… you’re invited.

Today, I’m in Memphis having just met with my contractor and property manager. If you’ve been around this blog for even a second or you’ve listened to just one or two of my podcast episodes, you know that the two most important members of your team are your contractor and property manager. If you have two solid professionals holding down these spots on your team, in my opinion… it’s pretty tough to lose money in real estate. My contractor and property management is solid, as usual.

Now, however, the real fun begins. To acquire this property I had to jump through several City hoops. Apparently, the previous owner had been granted funds from the City to rehab the building. By this building taking up so much street front footage, it had become a bit of an eyesore and it was in the City’s best interest to clean it up. Long story short, the owner who had been given the City funds decided to do other things with the money. So, the building sits un-rehabbed and the City committee that approved the grant sits with egg all over their face.

Along comes one of my business partners, experienced in Memphis multi-family rehabs, who put the property under contract to bail the City out. For one reason or another, the timing turns out to be untimely for my business partner to complete the project, so he wholesales the building to me. Now, I own the building and the project is mine. My team is in place, but as a part of the deal the City has insisted in being involved to assure the property DOES get rehabbed this time. Although, I had nothing to do with the previous owner squandering his government funds, I agreed to take on a bit of the burden to help the City save face in exchange for the smokin’ deal I got [I’ll reveal numbers once I’m further along in the process].

It all seemed pretty straight forward before the deal was complete, however, I overestimated the City’s understanding of construction budgets and how they’re adhered to. The lesson here… don’t assume anything. Everything must be in writing, especially when dealing with an entity such as a bank or a City. I took my eye off the details for a brief moment and it could cost me. Stay tuned!

By the way, I just posted a video “The Only ‘Realistic’ Path to Financial Freedom that No One is Telling You About.” Check it out here…

How to Be a Real Estate Investor

Matt — Tue, 08 Nov 2011 21:41:14 +0000

The list is seeming endless today regarding the number of people fighting for your undivided attention to show you how to be a real estate investor. Before taking action on any of their “silver bullet” advice, whether it’s paid or free advice, I’d recommend researching their track record and current standing as a real estate investor. In more instances than you can probably imagine, the real estate investing education industry is saturated with “experts” that allege to know a bunch, yet come up a little short on the doing.

There are two types of people in the real estate investing education industry, there are “educators” and there are “practitioners.” As volatile and finicky as the real estate market can be, the best education of how to be a real estate investor will typically come from the “practitioners,” the ones that are out on the court today making things happen.

Here’s the secret! Buy low and sell high is how to be a real estate investor. No duh! Right? Well, I bring that up because many sources will lead you to believe there are good markets to invest in and bad markets to invest in. No such thing. There are only up markets and down markets. And in any market, there is always a low price for you to purchase and there is always a high price for you to sell. If you know how to find the low price in any given market, it’s always a good market to invest in.

Additionally, given the fixed supply (land) and the rapidly growing demand (the population), there just will not ever be a bad time to invest in real estate. Well… unless somehow “shelter” goes out of fashion. If you can wrap your brain around that, then you are now ready to learn how to be a real estate investor. So much of becoming a real estate investor has to do with mindset, and part of the mindset is understanding an investor’s education is ongoing education, the operative word being “ongoing.”

Regardless of your experience, lessons will be entwined in every transaction. You’ll never know everything, so don’t try (as so many do) to learn everything about real estate investing before you get started, it’s so not necessary. With a basic understanding of the four basic steps to investing, you can take action; And it’s by taking action that you will learn how to be a real estate investor.

The First Step – Find a Bargain! Before you can do a deal, you must find one. There are many acquisition strategies that can be learned, and you can easily become overwhelmed trying to learn too many at once. The best real estate investing tip I have ever received is when learning how to be a real estate investor was to F.O.C.U.S. (Follow One Course Until Successful) by learning one acquisition strategy at a time and master it before learning the next. Short Sales, Foreclosure Auctions, Probate Records, Pre-Foreclosures, Bankruptcy Attorneys and Tax Auctions are all examples of acquisition strategies, and there are many more. By becoming a master of an acquisition strategy you will find bargains that the generalists won’t. No bargains? No profit.

The Second Step – Analyze It! Now that you’ve found a bargain, seemingly… how can you be sure that is actually a bargain? From my experience, property analysis is the most often ignored skill when learning how to be a real estate investor. Don’t make that mistake. This skill, or the lack of, can easily make you or break you. If you always remember that a property’s value is determined by what someone is willing to pay for it (as opposed to what YOU think it’s worth), you should be okay.

The Third Step – Put It Under Contract! Once you’ve confirmed that your deal is a bargain, the next step is to present an offer to the seller and put it under contract. As simple and logical as this step is to understand, for some reason it’s the step where so many investors (new and seasoned, alike) get stopped. Sadly, they’ve gone through all of the effort of finding their bargain, analyzing it and then never actually writing an offer to present to the seller. No offers? No transactions. No transactions? No profit. One’s ability to write offers, present them to sellers and successfully get the offers accepted will be in direct proportion to their profit. This is what real estate investors do, they write offers.

The Fourth Step – Close It! You’ve likely heard that “You make your money when you buy real estate,” but! You don’t actually get paid until you sell the real estate that you bought. As previously mentioned, there are several acquisition strategies of which to choose, but there are only four exit strategies [1) Wholesale, 2) Fix n‘ Flip, 3) Lease Option and 4) Buy n‘ Hold]. Another underestimated skill investors commonly fail to embrace when learning how to be a real estate investor is being clear on how they’re going to get out of the deal before they get in. Don’t do that. You must begin every transaction with the end in mind. You’ll discover quickly that paychecks are few and far between if you don’t. To consistently and successfully invest in real estate, a good real estate investor will know which of the four exit strategies to use in any given scenario to maximize their profits.

To sum it up, “How to be a real estate investor” consists of understanding that there will likely never (at least not in our lifetimes) be a bad time to invest in real estate and an investment in one’s real estate investing education will yield the greatest returns, but nothing happens until one takes action. On the court and in the game is where one will truly learn how to be a a real estate investor. Learn the four basic steps of the real estate transaction in the order that you’ll take those steps, move at the speed of instruction, and then you too should have no problem joining the ranks of the countless millionaires that are being created daily by taking advantage of today’s real estate market.

Here it is… 1) Find a Bargain, 2) Analyze It!, 3) Put It Under Contract!, and 4) Close It! Learn all of those and F.O.C.U.S. on one acquisition strategy and you’re ready to play the game.

So, where should you go to learn these basic steps and your investing strategies? There are so many options today for your real estate investing education. Do some research so you choose the best one out there for you. If you’d like, you can start here. Here are three that I recommend. Click here to review them yourself.

Four Tips to Successful Creative Real Estate Investing

Matt — Mon, 19 Sep 2011 06:59:39 +0000

Necessity, as they say, is the mother of invention- which makes perfectly good sense during these trying times. With the troubled economy we are facing, we all try our best to survive and think of every possible way to earn some extra to help ends meet. In many parts of the country, it’s the best time in the last decade to invest in Real Estate to earn some extra… and do much more than survive. Thrive!

But let’s say you don’t have the cash to spare, how are you going to pull it off? I understand the reason most people are reluctant to venture into real estate investing. Most are likely to think that they would need a lot of money on hand and/or an excellent credit score to be able to invest successfully and two, many more people simply don’t know where to start. For all their fears, there is something what we call “Creative Real Estate Investing”.

The simplest definition of Creative Real Estate Investing is non-conventional buying and selling real estate. Throw the Realtor and bank out the window and you are in the world of non-conventional investing, or creative real estate investing. Given that you have the correct mindset, persistence and a working commonsense… earning extra cash, lots of cash or flat-out creating wealth is available to anyone. Easier said than done, but very “doable.”

Here are four tips about Creative Real Estate Investing that will keep you “in the game,” or even put you at the top of the game:

1) Watch your operating expenses – Consider the skills you have. Do you need to have the locks changed? Do the walls need to be painted? What can you do yourself to save a buck, and what needs to be delegated?

2) Hire the right people for the job – In line with number 1, getting professional help from people with the right qualifications will assure you that you are maximizing your dollars… and time! Be careful not to trip over the dollars to pick up the pennies.

3) Constantly educate yourself – The are no limits when it comes to creative real estate investing. The more educated you are, the more money you will make. Inside of the real estate industry as laws, policies and markets can change seemingly over night, education doesn’t cost. It pays. Start, or continue, your education here.

4) Treat it like a business – Treat your real estate investing like a business and it will pay you like one. Just as you might get, or have gotten, up to go to work for a boss and follow a routine at the office, you’d be well served to create a routine for yourself inside your creative real estate investing business. Commit every day to generating a certain number of leads, talking to a specific number of people and writing at least one offer per day. If you do that, you will do deals.

Watch your expenses, work with the right people, keep educating yourself, treat it like a business, practice a little patience and never give up. Do that and the time and money freedom that accompanies successful creative real estate investing is yours for the taking.

10 Books Every Serious Real Estate Investor Should Read

Matt — Sun, 18 Sep 2011 07:12:07 +0000

Ongoing education is important to stay ahead of the competition in any profession, and real estate investing is no different. Below are ten books in no particular order that I have found to be “game changers.” The more you learn, the more you earn. Enjoy!

		Millionaire Real Estate Investor by Gary Keller Anyone who seeks financial wealth must first learn the fundamental truths and models that drive it. The Millionaire Real Estate Investor represents the collected wisdom and experience of over 100 millionaire investors from all walks of life who pursued financial wealth and achieved the life-changing freedom it delivers. This book–in straightforward, no nonsense, easy-to-read style–reveals their proven strategies.-
		Unfair Advantage by Robert Kiyosaki The bestselling author of Rich Dad Poor Dad confirms his message and challenges readers to change their context and think and act in a new way. Robert’s fresh approach to his time-tested messages includes clear, actionable steps that any individual or family can take, starting with education. Education becomes applied knowledge, a powerful tactic with measurable results. In true “Rich Dad” style, readers will be challenged to understand two points of view, and experience how financial knowledge is their unfair advantage.-
		Think and Get Rich by Napoleon Hill A must for anyone wanting to improve their lives and their positive thinking. There have been more millionaires and indeed, billionaires, who credit their fortunes to their reading this success classic than any other book ever printed. This is the COMPLETE Reference Book. It’s a true masterpiece with the fundamentals of the entire success philosophy.-
		Rich Dad Poor Dad by Robert Kiyosaki After reading this book one might wonder, “Where would I have ever learned this if I hadn’t read it here?” What a different life most of us would’ve had if To Kill A Mockingbird and The Great Gatsby were replaced with this book in high school as required reading. The possibilities are endless, and required reading for real estate investors… novice and expert, alike. Read it as soon as you can, and then give it to your kids to read.-
		Cashflow Quadrant by Robert Kiyosaki If you liked Rich Dad Poor Dad, you must read the follow-up guide to finding the financial fast track that best works for you. It reveals the strategies necessary for moving beyond job security (a myth, by the way) to financial independence through the four financial quadrants. I often wonder where I would be today if Cashflow Quadrant and its predecessor were required reading my senior year of high school… probably on my own Island in Fiji next door to Tony Robbins.-
		The Science of Getting Rich by Wallace D. Wattles This is a practical manual intended for those whose most pressing need is “money.” This is for people who want results, who wish to get rich first and philosophize about it later. Wattles describes the exact science of getting rich, and if followed, failure is impossible. Contrary to popular “how to get rich” beliefs, SGR reveals a method of getting rich that excludes competition and cheating, and encourages cooperation… invaluable information for creating win/win scenarios in your real estate investing.-
		The Compound Effect by Darren Hardy The Compound Effect contains the essence of what every super-achiever needs to know, practice, and master to obtain extraordinary success. Inside you will find strategies on: – How to win every time! The No. 1 strategy to achieve any goal and triumph over any competitor, even if they’re smarter, more talented or more experienced.-
		Awaken the Giant by Tony Robbins A classic! Every page is replete with well-researched and immediately practical guidelines for concentrating your thoughts and emotions on the attainment of your goals. It unleashed the giant within me, and it does so every time I pick it up. I get something new from Awaken the Giant Within every time I read it. It’s kind of like peeling an onion… it just gets deeper and deeper, but no tears.-
		What Every Real Estate Investor Needs to Know About Cash Flow by Frank Gallinelli Can a book filled with numbers possibly be exciting? If you’re truly interested in real estate investing then you must first realize that investing in income properties is all about the numbers. It’s about discounted cash flow and rates of return and net operating income and cap rates. If you understand how these and other key concepts work then you’re on your way to success — and that’s exciting. You should find the presentation of this material entertaining. It’s written in a way that makes it accessible to beginners and professionals alike.-
		Property Management Kit for Dummies by Robert S. Griswold Whether you intend to landlord your own properties or hire the job out to property management, you need to understand how property management works. This guide gives you proven strategies for establishing and maintaining rental properties, be they single family or multi-resident. You’ll see how to prepare and promote your properties, select tenants, handle repairs, avoid costly mistakes and legal snafus — and meet your long-term goals.-

10 Painfully Simple Steps to Improve Your Real Estate Investing

Matt — Mon, 12 Sep 2011 05:10:27 +0000

The lottery and real estate investing have two things in common. First, you’ve got to be in it to win it! Second, they’re both games of numbers. Thankfully, the odds of winning either of the two couldn’t be further apart. It’s been said that you have a better chance of walking outside on any given day and being struck by lightning as you do winning the lottery. Knowing that, you still buy a ticket every now and then, don’t you? As well, it’s been said that the average real estate investor will have to look at 100 deals before they actually get one done. With odds like that, why aren’t you writing 100 offers a day? Or 100 offers a week? Or 100 offers a month? Or 100 offers a year? Sheesh… have you even written 100 offers in your lifetime?

Regardless of where you are in your real estate investing career… novice or expert, are you working the numbers or are you still in search of the “silver bullet?” If you’re still in search of the silver bullet, I’m happy to share with you that I have found it! I introduce to you the elusive silver bullet of real estate investing in the form of “10 Painfully Simple Steps to Improve Your Real Estate Investing”

Step 1 – Write Offers

Step 2 – Write More Offers

Step 3 – Write More Offers

Step 4 – Write More Offers

Step 5 – Write More Offers

Step 6 – Write More Offers

Step 7 – Write More Offers

Step 8 – Write More Offers

Step 9 – Write More Offers

Step 10 – Write More Offers

Everything else you will need can be found here.

I know, you’re disappointed, right? Perhaps you’re a little pissed and feeling misled, as well? They are indeed simple steps, yes? And painful, too. The truth does hurt sometimes. You can do it, though. Write offers. That’s what real estate investors do.

Where to Start in Real Estate Investing

Matt — Sat, 20 Aug 2011 19:28:12 +0000

Real Estate Investing can be quite tricky if you don’t know the ropes. Some even actually think that there are sure-fire ways to easily earn profit from this trade. There are tons of free video and audio courses, infomercials, books and even seminars about how to get started and succeed in Real Estate Investing, but trying to learn it all at once will not only get you frustratingly confused, you might even go crazy!

I’m sure you’re excited to know where to start so allow me to share some of my personal techniques that I never got from any tutorials, books or seminars. These are the things that I have observed and became skilled at after I delved inside and tried Real Estate Investing firsthand.

As I have mentioned above, sources and learning materials about Real Estate Investing are everywhere and you just have to find the one which suits you best. You really don’t need to read all the books about real estate nor listen to each new mentor that comes along. More often than not, a successful mentor knows that there are no constant rules when it comes to playing the Real Estate Investing game. They know that as the economy shifts and the players change, the techniques to complete your transactions will change as well. Take all that you have learned and use it when dealing with agents and potential clients because experience, like all other things, will be your best teacher.

There are lots of misconceptions about Real Estate Investing that most people would simply just back away from and never try it at all. You do not need to have loads of cash or even have an excellent credit score to start investing. The best course materials will give you answers and instructions on what you need to do financial-wise. The “key” word that should keep you moving is DO. Think ahead, plan and then execute immediately. Thinking and planning too much can and will hinder your actions. The best course will show you how to get stuff done. Just do things as you are instructed and follow it right away. This is what I call moving at the speed of instruction.

Now that you are actually a Real Estate Investor, you got to ask yourself how you are faring. And the best way to know this is by looking at your transaction results. How fast were you at successfully closing deals? What have you been doing correctly? If it’s the opposite, ask yourself what went wrong. In this way, you would be able to assess yourself on what needs to be done for you to close transactions smoothly. Furthermore, connect with other Investors by joining a Real Estate Investing club. You should be able to learn a lot from your colleagues’ success and mistakes. Make this into a habit and before you know it, you will know what to do in every transactional scenario you are to come across.

To get started, get a free real estate investing course here.

Understanding the Purchase Agreement, or else…

Matt — Fri, 11 Mar 2011 15:00:50 +0000

The purchase agreement is a necessary, and can be the most powerful, tool of the real estate investor. Unfortunately, most investors cheat themselves by not understanding the purchase agreement more. Tragically, most new investors are so terrified of the purchase agreement that regardless of how much they invest in their real estate investing education, they never do a deal due to that fear. Repeat after me, “The purchase agreement is my friend.”

The real estate purchase agreement is based on common law contract principles. As a real estate investor, the bare minimum one should understand are the nuts and bolts of contract law… The Offer, Counter Offer and Acceptance. The Buyer presents the Offer to the Seller. The Seller now has the option to Decline, Accept or Counter Offer. The purchase agreement is not binding until the Seller accepts the Offer of which a “meeting of the minds” is created.

Acceptance is created when the Seller agrees to the exact terms of the Offer. If the Seller wants to change or modify any of the terms, they will make those changes via a Counter Offer. A Counter Offer can go back and forth multiple times between Buyer and Seller until an actual “meeting of the minds” is reached.

For the purchase agreement to be valid, it must…

Identify the parties: The full name of the parties must be on the contract. In a sales contract, the parties are the seller(s) and buyer(s) of the real estate.

Identify the real estate (property): At least the address, but preferably the legal description must be on the contract.

Identify the purchase price: The amount of the sales price or a reasonably ascertainable figure (an appraisal to be completed at a future date) must be on the contract.

Include signatures: A real estate contract must be entered into voluntarily (not by force), and must be signed by the parties, to be enforceable.

Have a legal purpose: The contract is void if it calls for illegal action.

Involve competent parties: Mentally impaired, drugged persons, etc. cannot enter into a contract. Contracts in which at least one of the parties is a minor are voidable by the minor.

Reflect a meeting of the minds: Each side must be clear and agree as to the essential details, rights, and obligations of the contract.

Include consideration: Money is the satisfactory.

Legally, that’s what must be in the contract. With regard to being a smart and educated investor when buying real estate, I insist you include as many contingencies as you can get away with. Conversely, when acting as the Seller, I recommend you limit the contingencies as much as possible.

Contingencies refer to conditions included within the Offer of which must be met in order to make the purchase agreement binding on the Buyer. Some of the more common contingencies are property sale contingencies, subject-to-financing contingencies, subject-to-appraisal contingencies and subject-to-inspection contingencies.

What most new investors don’t understand when making an Offer to Purchase an investment property is that although the purchase agreement is binding upon the Seller’s Acceptance, by including the right contingencies in their Offer the investor has the right to change their mind should they not like what they find during their due diligence period.

You see, once the Seller has Accepted the Buyer’s Offer, and as long as the Buyer performs per the terms of the purchase agreement, the Seller cannot cancel or back out of the contract without committing a breach, nor can the Seller entertain any Offers from other potential Buyers. You, however, have included properly written contingencies within your contract, and because you did… you essentially have the right to cancel or back out of the purchase agreement for any reason you have written into your contingencies. I’ll give you a sample of my contingency clause shortly.

In a nutshell, the purchase agreement is an extremely powerful tool as when it is properly written, it can be used to 1) lock out your competition, and 2) give you a pressure-free opportunity to perform your due diligence.

I must disclose that I am not an attorney nor is any of the above meant to be legal advice. I’m simply sharing that because I educated myself on my state’s laws and the ins-n’-outs of the purchase agreement, I’m always in control of my transactions. By educating yourself in the same manner, you can wield the same control over your transactions, as well… and in result, become a more prudent and prolific real estate investor.

In closing, the two most common questions I receive from my real estate investor workshops are:

1. Where can I get a purchase agreement? I use EpicContracts.com to create my purchase agreements. It’s an easy fill-in-the-blank-do-it-yourself service. I think I pay $60.00 a year to create an unlimited number of contracts in all 50 states. Simple, neat and clean.

2. How does your contingency clause specifically read? I’m always modifying my contingency clause to fit the deal and my specific situations, but it generally reads something like this:

This contract is contingent upon the Buyer having the right to engage a professional inspector to determine the structure and condition of the house. The inspection shall be conducted and the contingency concluded within ten working days from the date of acceptance of this contract. The inspection report must be satisfactory to Buyer, or all deposit monies will be immediately refunded and all contract obligations considered null and void.

As a full-time real estate investor, the purchase agreement is my best friend. Get to know your market area’s laws and educate yourself on the dynamics of the real estate purchase agreement and I’m confident the purchase agreement will be your best friend, too.

How to “Clearly” Tell a Good Deal From a Bad One

Matt — Thu, 10 Mar 2011 05:00:09 +0000

Knowing the difference between a good deal and a bad deal is essential if you expect to invest in real estate for the long-term. Some are naturals at recognizing deals, and others… not so much. Either way, the skill can be learned through the right real estate investing education and real world experience.

The educated real estate investor answer to just about any investing question is, “It depends.” The question, “Is this a good deal?” is no exception. The answer depends on the investor’s goals and intent.

Is the goal cash or cash-flow?

Is the intent to invest long-term or flip quickly?

These are important questions to be addressed before the original question, “Is this a good deal?” can be accurately answered. However, a quick analysis to determine a clear initial opinion of “good deal” or “bad deal” can be had by using a simple acronym that was taught to me years ago… C.L.E.A.R. I still use it today.

C is for Cashflow

Cashflow is the monthly income that’s left over after all property expenses have been paid. In my opinion, an investor should never purchase a property unless they are prepared to hold on to it. If you find yourself having to hold on to a property, particularly one you had intended to flip, the property should pay you (cashflow) while you do hold on to it. So, question #1 is, “Will this property cashflow?” If it won’t, that would typically be my first indicator that this might not be a good deal.

To determine whether a property will cashflow or not, feel free to use the Epic Analyzer Buy n’ Hold Calculator. The Buy n’ Hold Calculator will also suggest a maximum offer based on your minimum cashflow requirements. Very handy!

L is for Leverage

Leverage sometimes gets a bad rap, but mostly from inexperienced investors. Leverage is important as it enables you to use less of your own cash and purchase more property than you otherwise could without leverage. Additionally, your rate of return (ROI) is positively and exponentially impacted through cashflow and appreciation. “No money down” is the ultimate leveraged position and is very attractive for most investors, but is not without its risks and should be approached with caution. Nonetheless, leverage will typically work in favor of the experienced and educated investor. So, question #2 is, “How much can I leverage?” As long as the property cashflows, I would say “The more the better!”, but you know your situation better than I do.

E is for Equity

Equity is the difference between what a person owes on a property and what the property is worth. When analyzing a property, equity can be perceived from multiple angles, such as a:

Rezoning Potential
Discounted Price
Fix-Up Potential
Improved Management Potential

Equity can be created in multiple ways, but buying a property with the equity “built-in” is the best way. Distressed property owners and investors that want out of their property are my favorite sources for equity purchases. One person’s problem is another’s opportunity – both win in this scenario.

To determine your equity position in a potential investment, use the Epic Analyzer Fix n’ Flip Calculator. You’ll know if you have equity (and how much) in a deal in 60 seconds or less.

A is for Appreciation

Banking on appreciation is a gamble, and many gamblers… uh… err… investors… do just that, gamble. I’m very conservative and hate to lose money, and there’s probably no faster way in real estate to lose money than by ignoring cashflow and equity and push all your chips in betting on appreciation. If your property passes the cashflow and equity tests, consider appreciation a bonus or “icing on the cake.” Be a smart investor and do not make appreciation your primary buying criteria.

R is for Risk

What most people don’t realize is that risk can be virtually eliminated from real estate investing by following these three rules:

1. Don’t buy any property unless it cashflows, even if “Fix n’ Flip” is your strategy.

2. Know your state’s real estate laws and write good purchase agreements with plenty of room for you to change your mind if something doesn’t look right.

3. Build a strong team of experienced professionals to work with, specifically your CPA, rehab contractors and property management.

No investment is “risk free,” but by giving these three areas of your real estate investing business a great deal of attention, real estate is of the safest investments I know.

Get “CLEAR” on your investing opportunities, and quickly distinguishing the good deals from the bad ones will be a snap.