Photos
Dr. Kalinda Rose Stevenson
What Successful Real Estate Investors Know About Money That Consumers Do Not Know And The Real Estate Seminars Are Not Teaching: Investor Secret Five: Profit or Cost?
The fifth investor secret is that investors count profit rather than cost.
Consumers are trained to think cost first. Is it low cost? Is it a low interest rate? Are we saving money? It’s all about price. When consumers buy real estate, they think also tend to think cost first.
Here’s a question for you: What’s too high an interest rate for you to borrow to buy investment property?
Would you pay 10%?
Would you pay 20%?
Would you pay 50%?
If you are like most consumers, you would hear these percentages and say, “No way would I pay those interest rates.” You would probably think that 50% interest sounds completely outrageous.
But imagine that I am a private money lender and will loan you short term money at 50% interest. With my money, you can buy a
property with no money of your own. At the end of six months, you sell the property for a million dollar profit. Would you be willing
to split that million dollars fifty-fifty so that you end up with half a million dollars in profit on a property you could not have bought without my money? Is it worth it to you to pay 50% interest to make $500,000?
Consumers are taught to shop for interest rates. When the average consumer hears that private money lenders might charge 15% interest, they say, “Why would I pay 15% interest when
the banks are charging 6%? What they are forgetting is that they can’t qualify at the bank, or the bank insists on a substantial cash down payment.
The private money lender makes it possible to buy properties you could not afford to buy with the bank’s money.
To an investor, interest rate and cost are not the most important factors. The real issue is profit.
Another comment that I want to add here is that investing is a team sport. It means that you cannot begrudge your private money
person the opportunity to make a profit.
You could say, “It’s not fair that I have to pay 15% interest to my private money lender.”
Step back and say instead, “If it weren’t for my private money lender, I couldn’t have gotten into the deal in the first place.”
Let other people have their share of the profits.
Investor Secret Five is that Investors count profits rather than cost.
So what does all of this mean to you?
I have been to many real estate seminars taught by people who aren’t telling you what you need to know to become a successful investor. They aren’t telling you what an investor needs to know about money.
You CAN use consumer rules to invest in real estate, but it’s a long, hard, and lonely road. It’s going to be much easier if you understand the investor money rules and play a different game.
When you do that, investing in real estate becomes so much easier. It also becomes much more profitable.
You become part of a network of people who know how to play the game. You have so much more success than you
would ever have on your own.
These conditions apply to any endeavor in life. If you surround yourself with like-minded people who are willing to be supportive, you’re going to get much farther than if you try to do it alone.
For the complete free Email Course, “How To Take The Consumer Money Mindset Lid Off Your Real Estate Investing,” Go to www.nomoneylimits.com
Sphere: Related ContentNo tags for this post.
What Successful Real Estate Investors Know About Money That Consumers Do Not Know And The Real Estate Seminars Are Not Teaching: Investor Secret Four: Good Debt or Bad Debt?
The fourth investor secret is that debt is an investor’s best friend. Investors know the difference between good debt and bad debt.
Consumers are taught that all debt is bad. The ideal consumer goal is to be debt free.
Investors know that debt is an investor’s best friend. It really is. Think about this. Good debt allows you to take advantage of somebody else’s money. The term for this is OPM (other people’s money.)
You’re standing there looking at this investment property. You’d like to buy it, but you can’t afford it. You don’t have the money. But someone else has the money. So you borrow the money and buy the property.
You use debt to allow you to buy the property. If it was a good investment, you will use debt to create income for yourself. You are using debt to create wealth. This is good debt.
Let me give a definition. Bad debt is consumer debt, buying for something that won’t bring you money. If you charge a $3000 for a plasma TV, you have created bad debt. The TV is not going to bring you income. It is going to cost you money.
If you borrow $3000 to invest in property, you have taken on good debt, because the borrowed money can lead to income.
For example, some of the biggest debtors on the planet are people like Donald Trump. Donald Trump owes fantastic amounts of money. He’s in debt, but he leverages the debt to build his skyscrapers.
The key concept is leverage. In physics, a lever is something that allows you to move something else. You have a rod. If you stick it under a rock, push down, you can move the rock. Leverage is a tool that allows you to move something that you couldn’t move if you just tried to pick it up with brute strength.
When it comes to money, leverage allows you to use somebody else’s money for your own purposes.
Whether you call it leverage, or OPM, the result is that you are using debt to create wealth.
Investor Secret Four is that good debt is the secret to creating wealth.
For the complete free Email Course, “How To Take The Consumer Money Mindset Lid Off Your Real Estate Investing,” Go to www.nomoneylimits.com
Sphere: Related ContentNo tags for this post.
What Successful Real Estate Investors Know About Money That Consumers Do Not Know And The Real Estate Seminars Are Not Teaching: Investor Secret Three. Investing as a Team Sport or a Solo Competition?
The third investor secret is that investing is a team sport. The consumer idea is that you’ve got to do it alone. It’s a solo sport, like golf. With golf, you go out there by yourself, and whack the ball around. You have your own handicap. You have your own scores. It’s all about you.
Investing is a team sport, like soccer. If you are in a bad position to score a goal, you pass off the ball to a teammate in better position. If your teammate makes the shot, the whole team wins. The successful investor has a teamwork mentality.
The consumer investment mindset has a common theme. You are trying to do it alone. That’s a very lonely place to be. You’re limited by your own resources, time, knowledge, and efforts.
Understand that success in anything is a team sport. The more you surround yourself with people who have resources, knowledge, insights, and relationships you don’t have, the more you’re part of this world of successful people.
Particularly in the United States, we have the model of the self-made man. It’s always a man, too. It’s never a woman. He climbs up to pinnacle of success, stands at the top, and says, “I’m now king of the world.”
It’s this competitive model of “the top dog wins.” It’s such a limiting model. Compare that to Napoleon Hill’s Master Mind concept. True success comes from surrounding yourself with likeminded people.
How does this apply to investing in real estate? Say you want to buy a property, but you don’t have the money. With a consumer mindset, you say, “I can’t afford this, and that is the end of that.” With an investor mindset, you say, “I can’t afford to buy this property, but I know people who do have the money to buy it.”
At that point, you take the deal to somebody else. Real estate investors talk about “bird dogs.” A bird dog is somebody who finds a property and passes the information to someone who can buy it. The bird dog makes money by finding properties, not by buying them.
You can also make money as the deal maker. You can be the person who puts together the seller and the person with the money and arranges the deal.
You can also be the investor. A bird dog or deal maker can bring a deal to you, and you can be the one to buy if you have money to invest.
The point is that there are different roles you can play, just as you can play different positions on a soccer team. You can play in the front line. You can play defense. You can play the goal. You pass the ball around until someone can make the shot and score the goal.
If you understand that you’re part of a community, a network, and somebody has the money and can make it work, then it’s not all up to you. You’re not clawing your way up to the top of the mountain.
Investing is a team sport. You asked where to find the money. Mortgage brokers will put you in touch with people that have private money.
There are all kinds of people out there who are part of this world and have specialized knowledge. The more you surround yourself with people who understand investing, the more likely you’ll be successful.
For the complete free Email Course, “How To Take The Consumer Money Mindset Lid Off Your Real Estate Investing,” Go to www.nomoneylimits.com
Sphere: Related ContentNo tags for this post.
What Successful Real Estate Investors Know About Money That Consumers Do Not Know And The Real Estate Seminars Are Not Teaching: Investor Secret Two. Plenty of Money or Not Enough Money?
The second investor secret is that there is always enough money to invest in real estate. Consumers live in a world in which money is scarce.
The most basic assumption that keeps consumers from buying investment property is the belief that you have to do it alone, using your money and your credit.
As consumers, we are taught to go to banks to get money to invest. Following the consumer rule that it is all about us, the banks make us beg for money. They demand all kinds of personal information, and then they decide whether or now we are worthy.
Once again, it is all about you and your money and whether or not the banks think you are credit worthy. The rule with banks seems to be, if you have money, they will give you more. If you don’t have money, then you are not credit worthy.
What successful investors know that consumers don’t know is that there’s plenty of money available for you to invest.
You might not have it, but someone has the money you need. If you want to buy a property, and you need $10,000 as a down payment, the consumer mindset says, “I need $10,000 for a down payment. I don’t have $10,000, therefore, I can’t buy the property.”
Investors know that somebody out there has $10,000 to invest in the property. I might not have it, but you might have it. Investors know, “I don’t need to have my own money. I can use other people’s money.” There’s no lack of money.
In the consumer world, you have to deal with banks who decide if you are credit worthy. In the investor world, there are all sorts of people called private lenders. You don’t ever have to go to a bank to get money to invest in any property.
The private lenders don’t make it all about you. They want to know if it is a good deal. If the deal makes sense, there’s no lack of money.
If you have an investor and a consumer looking at the same property, the consumer will say, “I can’t buy this because I don’t have enough money and the bank won’t loan me the money because I am not credit worthy.” In contrast, the investor will say, “This is a good deal. I don’t have any money, but I know that other people do have money. Let me see what kind of deal I can put together with a private lender so that I can buy this property.”
Investor Secret Two is that there is always enough money.
For the complete free Email Course, “How To Take The Consumer Money Mindset Lid Off Your Real Estate Investing,” Go to www.nomoneylimits.com
Sphere: Related ContentNo tags for this post.
What Successful Real Estate Investors Know About Money That Consumers Do Not Know And The Real Estate Seminars Are Not Teaching: Secret One. Investor Rules Or Consumer Rules?
The first Investor money secret is that if you want to be a successful real estate investor, do not follow consumer money rules.
What are consumer money rules? First of all, when you buy real estate as a consumer, it’s all about you and your money. It’s about you and your credit score. When you buy real estate as a consumer, it’s all about you.
The Investor Money Secret is that it is not about you anymore. It’s about the property. It’s about the deal. The focus is taken away from you, your money, and your credit and moved to whether or not the deal makes sense.
One of the primary reasons people are unsuccessful when they attempt to invest in real estate is that they think they have to invest in real estate the same way they invest in their own personal property.
If you’re going to invest as an investor, you need to play with investor rules. It’s like any kind of sport. You need to know the game you’re playing to know what rules to follow. If you’re going to play hockey, you need to play by hockey’s rules. If you’re going to play tennis, you need to play by tennis’ rules. If you’re trying to play hockey with tennis rules, you’re not going to have a very successful hockey game.
That’s what’s happening in real estate. People are trying to play this game called real estate investing with consumer rules.
One of the fundamental problems of many of the real estate seminars I have attended is that the presenters don’t help people understand the difference between buying real estate as an investor and buying real estate as a consumer.
They’ll tell you that the first thing you need to do is check your credit score and you need to get your financing lined up. They are basically telling you to invest as a consumer.
In fact, many people do invest in invest in property as consumers, using their own money and credit. Usually they buy and hold properties, to get rental income and cash flow.
It is possible for people to build real estate portfolios following consumer rules. In the process, they are tying up their money and using their credit. As a means to create financial independence, this is a long and laborious way to build wealth.
In order to buy a property using consumer rules, you need to have excellent credit. You need to have enough money to make a down payment.
In an expensive market, many people can’t even get into the game to buy their own homes. And in a very expensive market, it is almost impossible to charge enough rent to pay the mortgage.
The result is that when people try to buy investment property using consumer money rules, most people cannot even get started. It simply costs too much or they don’t have enough credit.
The first rule of successful real estate investing is to invest with investor rules rather than consumer rules. As a consumer, it’s all about you. As an investor, it’s all about the property and the deal. This is very good news for people who want to invest in real estate. You don’t have to have a lot of money or excellent credit to invest. You do need to know the investor money rules.
For the complete free Email Course, “How To Take The Consumer Money Mindset Lid Off Your Real Estate Investing,” Go to www.nomoneylimits.com
Sphere: Related ContentNo tags for this post.
How To Lift The Consumer Money Mindset Lid Off Your Real Estate Investing: What The Real Estate Seminars Do Not Teach You About Money
If you’re like me, you have gone to many real estate seminars. Ever since the stock market went down a few years ago, people have taken money out of mutual funds and stock market investments to invest in real estate.
Real estate seminars are big business. People go to the seminars with their credit cards in their hands and hope in their hearts. They hear that this is the way to make huge amounts of money. People will spend thousands of dollars for real estate courses, mentoring, coaching, and tapes.
I know that because I’ve done it.
My experience with most of these real estate seminars—not all, but most—is that they don’t tell you this important fact. In order to succeed as a real estate investor, you need to change the way you understand money.
Most of the real seminars I’ve attended don’t tell students that you have to understand money differently if you’re going to invest than if you’re going to buy real estate as a consumer.
We’ve all been taught certain rules of money as consumers.
When you want to become a real estate investor, you will find that those consumer money rules not only don’t work, but they get in the way. They hinder you from making money in real estate.
As an investor, you need to know a whole new set of money rules.
Investors live in a world that is different than the world of consumers. Even though we’re all living here on the same planet together, investors think differently. They know that there are different rules of money.
My biggest complaint with real estate seminars, and the gurus who will take thousands and thousands of dollars from people who want to learn how to invest in real estate is that they don’t start with the investor money rules.
They don’t tell you that you really need to think differently about money. They don’t tell what successful investors know about money.
It’s not only that they don’t make it clear that there are consumer rules and investor rules.
The worst part is that they tell you can make all this money in real estate as an investor, but the actions they tell you to take are more appropriate for consumers than investors.
They mix apples and oranges, and you end up with lemons. You don’t end up with what you want. You just end up deeper in debt.
The most important point is that money rules are very different for investors than they are for consumers.
For the No Money Limits Mentor, “Money Strategies For Real Estate Investors.”
Go to: http://www.NoMoneyLimits.com/mentoring
Sphere: Related ContentNo tags for this post.
Syndicate
Subscribe to this site's RSS feed.
-
