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April 30, 2008

What's your best rehab tip?

Investing in real estate rehabs will always be a popular option for investors who know how and are willing to either do the work or get it done. But many new investors are intimidated by the idea of buying a distressed property that no one else wants and fixing it up.

If you're a rehab investor, what are some of the things you do to get your rehabs fixed up and on the market quickly and economically? Do you have some quick fixes for cabinets and countertops? For carpets and flooring? Landscaping? Maybe a great way to eliminate odors or brighten up dull fixtures?

Please use the comment feature to share some of the techniques you use that work.

April 18, 2008

Get Rich by Getting Smarter About Money

Book Review

Get Rich by Getting Smarter About Money

Increase Your Financial IQ: Get Smarter with Your Money by Robert T. Kiyosaki (Business Plus, 2008)

In what may be his best book to date, Robert Kiyosaki challenges his readers to wise up about their own financial situation and what they need to know to become financially intelligent because, he says, if you can increase your financial IQ, you can become richer.

Increase Your Financial IQ: Get Smarter with Your Money is classic Kiyosaki: part story-telling and part textbook with plenty of motivation and no tolerance for excuses. Kiyosaki doesn’t tell you what to do; he tells you how to find out what you need to know so you can make good decisions for yourself. He writes: “It is not real estate, stocks, mutual funds, businesses, or money that makes a person rich. It is information, knowledge, wisdom, and know-how, a.k.a. financial intelligence, that makes one wealthy.”

Kiyosaki details the five financial IQs: Making more money, protecting your money, budgeting your money, leveraging your money, and improving your financial information. The book closes with practical applications for developing your financial IQ.

In Increase Your Financial IQ, Kiyosaki challenges the reader to develop a true understanding of money and the rules of the money game—as well as of the fact that the rules change over time. This isn’t a feel-good, “do as I tell you and all will be fine” book. It’s a book about empowerment. Kiyosaki clearly intends to provoke the reader into taking action—something he does well. It’s a must-read for anyone interested in improving their financial circumstances.

Reviewed by Jacquelyn Lynn, author of The Entrepreneur’s Almanac

14 Great Ways to Stay Motivated

Ever feel like you’re swimming upstream? Try these…

14 Great Ways to Stay Motivated

By Jordan Taylor

One of the most challenging aspects of real estate investing is staying motivated in the face of adversity. Sure, it’s easy to keep going when things are going great, but what about when you can’t find deals, or when the deals you find are falling through, or when your friends and family are telling you you’re crazy to think you can do this? Because staying motivated is often easier said than done, we put together a list of 14 things you can do to lift yourself up when circumstances start dragging you down.

1. Associate with other successful, positive people. “Success breeds success,” says Hugh Griffith, a real estate investor in Franklin, Wisconsin. “It may seem simple, but to keep motivated, one needs to associate oneself with people who are also motivated to be successful, regardless of their current situation.” Rick Lopez, an investor in McAllen, Texas, agrees. He says, “I associate with people who are investors and they motivate me.”

2. Set goals and review them often. Visualize your goals to make them real, write them down, and make a contract with yourself to achieve them. When things get tough, think about how good life will be when you have reached your goals. If reviewing your goals does not motivate you, you have the wrong goals.

3. Use adversity to your benefit. German philosopher Friedrich Nietzsche once said, “That which does not kill us makes us stronger.” Don’t try to avoid adversity; face it head-on, stay focused, and let it shape you into a better person. Learn to see adversity as an opportunity for growth.

4. Avoid negative people. Misery may love company—but not yours! When people start moaning about how bad things are, politely excuse yourself and find positive people to be around or something productive to do. Don’t argue with a negative person; it’s a waste of time.

5. Remember that you are in control of yourself. You may not be able to control what happens, but you can control how you react.

6. Practice mindfeed. Just as you feed your body, feed your mind with nourishing information. Lopez reads books by Russ Whitney (who mentions mindfeed in all of his books), Robert Kiyosaki, and Donald Trump. Triquinta Thomas of Landover, Maryland, listens to audio books and other motivational materials on CD while she’s driving. She suggests forming a discussion group to talk about your mindfeed materials.

7. Form a support group that will hold you accountable. Nannette Barrie of Oakland, California, advises putting together a group of investors with whom you can check in once a week to see how you’re doing. “Hold each other accountable with such things as the number of properties you look at each week, the contacts made, offers written, offers accepted, and properties sold,” she says.

8. Join and be active in local real estate investing organizations. The real estate investing community is extremely supportive and most experienced investors are usually willing to mentor newcomers. “Always seek help from the investment community,” Barrie says. “Ask the veterans questions at every step of a challenging deal.”

9. Turn off the TV. Watching just one show can stretch into an entire evening in front of the television—wasted hours you can never recover. Spend that time doing something that will help you grow as an investor and see how motivating that is.

10. Look for the bright spot. No matter how dark things may seem, there is always something positive in every situation. Find it and focus on it.

11. Stay spiritually connected. Regardless of your particular faith, do not neglect your spiritual health. Pray. Mediate. Study. Vichelle Nelson, a real estate investor in the Graham/Spanaway area of Washington, says, “The best way for me to overcome adversity is to meditate on scriptures from the Bible, pray, and make positive confessions that are in the Bible and that I find in other great books.”

12. Take action. Don’t wait for just the right moment or until something else happens. Get up and do something today and let the momentum take you forward. You can make corrections later if you need to.

13. Reward yourself. Savor your achievements by rewarding yourself when you reach them.

14. Believe that you are a winner. Have faith in yourself and persevere. Remember that losers give up, but winners keep going.

Sharpen Your Negotiating Skills

Being a good negotiator will help you in all aspects of your life, not just in business

By Jacquelyn Lynn

When you think about it, life is a series of negotiations. The American Heritage Dictionary defines negotiate as conferring with another or others in order to come to terms or reach an agreement. You negotiate with others far more often than you may realize—negotiations that include interactions with family and friends, getting the best deal on a consumer purchase, and a wide variety of business activities.

Though effective negotiating does come more easily to some than others, it’s a skill that anyone can learn and everyone should. Though the consumer culture in the United States doesn’t leave much room for negotiation—you’re not, for example, likely to be able to dicker over price in a major department store—there are still plenty of opportunities for negotiating. The clerk at Bloomingdale’s might not have the authority to give you a discount, but the owner of a small store certainly could.

Real estate investors typically negotiate multiple points on every transaction. As the buyer or seller, you negotiate the price and terms. When you’re buying, you also negotiate financing, fees for services such as appraisals and other items necessary for closing. When you’re a landlord, you’ll negotiate with your tenants, as well as the contractors and other workers you hire to take care of your properties. And while price is certainly a key negotiating point, it isn’t the only issue you need to discuss.

Fundamentals of negotiating

There are three fundamental components of negotiating: listening, obtaining information, and overcoming objections, and they occur simultaneously. To be a good negotiator, you don’t need to be pushy or overbearing, you don’t need to be the loudest or most forceful speaker, and most importantly, you don’t need to be offensive. Successful negotiations come from understanding these three components and using them in a way that results in a win-win transaction.

Good listeners place as much or more emphasis on what others are saying than on what they themselves are saying or planning to say. You can develop your own listening skills by changing your attitude from one that is self-centered to one that focuses on the other person. When you are truly focused on what the person you are negotiating with has to say, the information gathering process is enhanced. And that brings us to the second component of negotiating: obtaining information.

In order to propose an acceptable agreement, you need to understand what both parties need. You already know, of course, what will work for you; asking good questions and then listening carefully to the answers is a very direct and quite effective way to find out what will work for the other person. For example, let’s say you are negotiating to purchase a distressed property that is owned free and clear. You have some cash and access to hard money, but you really want the seller to hold all or part of the mortgage. To find out if the seller will accept such a deal, you can ask a series of questions that will tell you how much cash the seller needs and whether he understands the benefits of owner financing.

Finally, as you negotiate, you will have to overcome objections. Many people fear objections, but a good negotiator welcomes them. Why? Because what is often perceived as an obstacle is really just a request for more information. When people seek more information, it usually means they are looking for reasons or ways to make the deal work.

Objections typically come in the form of questions but may be statements. So the seller in our example might ask, “What happens if you don’t make the mortgage payments on time?” Or he might say, “If you don’t make the mortgage payments on time, I’ll have a problem.” Either way, you now have the chance to demonstrate that you are reliable and can be trusted to pay on time and explain that the seller has recourse through foreclosure if you don’t.

If possible, find out what’s behind the objection before you respond to it. You may discover that it’s not really an objection at all. Our seller could say, “If I agree to 100 percent seller financing, I won’t get any money at closing.” You need to determine if that’s a problem for him or if he’s making a simple observation—and to do that, all you have to do is ask, “Do you need cash at closing?”

Good negotiators are not adversarial or challenging. They listen, gather data, and address concerns, then offer a proposal that will work for all parties. As you develop and refine your negotiating skills, your life in general as well as your path to real estate investing success will become much smoother and more rewarding.

Jacquelyn Lynn is the author of The Entrepreneur’s Almanac (Entrepreneur Press).

April 14, 2008

Internet Crime Report: The Top Scams Of 2007

In 2007, the Internet Crime Complaint Center (a joint venture of the FBI and the non-profit National White Collar Crime Center) received 206,884 complaints, leading to a reported dollar loss of nearly $240 million, an all-time high.

Pets, romance, and secret shoppers: They’re each among the top ruses used by Internet scam artists in 2007, according to a comprehensive report on online crime just issued by the Internet Crime Complaint Center, or IC3.

Here’s a rundown on how these scams generally work, along with other common frauds described in the report:

Pet Scams
• You see an online (or offline) ad selling a pet and send in your money, plus a little extra for delivery costs. But you never get the pet; the scam artist simply takes your money and runs.
• You’re selling a pet. You’re sent a check that’s actually more than your asking price. When you ask about the overpayment, you’re told it’s meant for someone else who will be caring for the pet temporarily. You’re asked to deposit the check and wire the difference to this other person. But the check bounces and you lose the money you sent to what turns out to be a fraudster.

Secret Shoppers and Funds Transfer Scams
• You’ve been hired via the web to rate your experiences while shopping or dining. You’re paid by check and asked to wire a percentage of the money to a third party. Like the pet scam, the check is bad and you’re out the money you sent. As part of the scam, the fraudsters often use (illegally) real logos from legitimate companies.
• While renting out a property, you’re sent a check that is more than your rental fee and asked to wire the difference to someone else (are you seeing a trend here?). Or you take a job that requires you to receive money from a company and redistribute funds to affiliates via wire.

Adoption and Charity Frauds
• You get a spam e-mail that tugs on your heartstrings, asking for a pressing donation to a charity and often using the subject header, “Urgent Assistance is Needed.” The name of a real charity is generally used, but the money is really going to a con artist. One set of scams in 2007, for example, used the name of a legitimate British adoption agency to ask for money for orphaned or abandoned children.

Romance Fraud• You encounter someone in an online dating or social networking site who lives far away or in another country. That person strikes up a relationship with you and then wants to meet, but needs money to cover travel expenses. Typically, that’s just the beginning—the person may end up in the hospital during the trip or get mugged and need more money, etc.

If you’ve been a victim of an internet crime, file a complaint with your local police department as well as with the Internet Crime Complaint Center.

April 09, 2008

A thought on the economy

What if they gave a recession and nobody came?

Some people may be going through difficult economic times, but you can choose not to be one of them.