Catcleugh House - is a late Victorian mansion built in 1893 located in Catcleugh, Rochester. The house was built by the then Newcastle and Gateshead Water Company for Charles Hawksley, son of renowned reservoir and waterworks architect and engineer Thomas Hawksley. The T and C Hawksley company had been commissioned by the Newcastle and Gateshead Water Company (now referred to as Northumbrian) to build a reservoir in Catcleugh that would supplement Newcastle-upon-Tynes dwindling fresh water supply.
The mansion has been maintained and owned by Northumbrian Water for most of its life and had been used primarily as a recreational site and for visitors and guests before being sold during 2006. It is now the main residence of private equity, who notably becomes the second formal resident of the property in over a hundred years.
Horstead Hall' - was a country house in Norfolk that was demolished in the 1950s.
The village of Horstead in the county of Norfolk is not short of country houses. Towards Norwich lie Horstead House and Heggatt Hall, while towards Buxton lies the Horstead Hall estate. The house lay in the middle of substantial park. A seventeenth-century house stood here until 1835, when it was rebuilt in the Tudor style.
Owners included the Batcheler family (18th century), the Suffields and latterly the Birkbecks. Sir Edward Birkbeck entertained Prime Minister Lord Salisbury there in 1887. During World War II the house was requisitioned by the War Office and used by a cipher unit, who put up numerous huts in the grounds.
The estate was sold in 1947 and the house came down soon after. Today part of the estate is used for quarrying. Substantial estate buildings survive, and part of the house remains, albeit in derelict condition. A pipe organ from the house is in the church at Ashby St. Mary.
Bronwydd, Cardiganshire - was a country house in Wales.
'Bronwydd, Cardiganshire', home to the Lloyd Family, Bronwydd replaced Cilrhiwe as the main family home in the 1850s, at which time it was rebuilt in the fashionable gothic revival style by Sir Thomas Lloyd, 1st Baronet. The architect was R.K.Penson, who skillfully adapted an existing eighteenth century house to create an elaborate Victorian gothic 'castle' suitable for the 'Marcher Lord' of Cemais. The eighteenth-century house contained a private chapel, the Lloyds of that era having been converts to Methodism, while the reconstructed Bronwydd included a baronial hall, containing the family muniments and serving as entrance hall. The exterior of the building included a tall, slim round tower and a square tower with bell-turret. Part of the house is supposed to have been modelled on the cathedral transept and tower of the Rock of Cashel, Ireland, although Thomas Lloyd described the whole as 'a romantic Rhineland castle with patterned roof-tiling.' The stables and service block were rendered in mock half-timber, similar to the streets of Chester. The house was sited on a bluff overlooking a river.
The interiors were splendid, with painted mottoes above the doors, a profusion of carved stone, stained glass and mural paintings. The expense of such medieval fantasies rested heavy on the estate, which was in debt to the tune of £100,000 when Sir Thomas' son, Sir Marteine Lloyd inherited the estate in 1877. Prudent management and the sale of outlying lands restored some solvency to the estate in the years prior to the First World War. The death of Sir Marteine's son, Arundel Keymes Lloyd in the Great War doomed the estate, however. The Inland Revenue demanded death duties on the estate, which had been made over to Arundel Lloyd in order to avoid those same duties. For much of the post-war period, Sir Marteine and Lady Lloyd lived away from Bronwydd, although they celebrated their Golden Wedding in 1928 in some style.
Sir Marteine Lloyd died in 1933, and Lady Lloyd attempted to let the house, which ended up housing refugees. On Lady Lloyd's death in 1937, the house and grounds were sold. The sale of land close to the mansion for forestry work doomed the house. After housing a Jewish boarding school, Aryeh House School, in the Second World War, and refugees thereafter, the house, then known as Bronwydd Castle, was stripped. Substantial parts of the house remained roofed into the 1980s. The round tower fell in the early years of the twenty-first century, and much of the house has disappeared.
Ardgillan - is a large country house with castellated embellishments built by the Rev. Robert Taylor in 1738. It stands on the elevated coastline commanding magnificent views of the Irish Sea. The house consists of two storeys over basement, which extend under the south lawns.
The name Ardgillan is derived from the Irish "Árd Choill" meaning "High Wood".
Robert Taylor was a grandson of the Thomas Taylor who worked with William Petty on the mid 17th century Down Survey of Ireland. The house remained in the Taylor family until 1962 when the estate to Heinrich Potts of Westphalia. In 1982 the estate was sold to the County Council.
The ground floor rooms and kitchen are open to the Public. Upstairs there is a permanent exhibition of the Down Survey colour maps and text and the Hutton Coachbuilders drawings and text.
The Castle is managed jointly with the Skerries Development and Community Association Limited.
Saturday, January 5, 2008
ABOUT FARM HOUSE
A farmhouse is a type of building or house which serves a residential purpose in a rural or agricultural setting. Most often, the surrounding environment will be a farm. These buildings are usually 2 stories, but early buildings were single story.
These buildings tend to be more pragmatic than aesthetic, but often well-stocked or well-furnished in terms of food, insulation or in other aspects dealing with daily necessities. The supply of agricultural products from its environment tends to be a factor for this, as well as stressing the need for productivity and pragmatism in the survival of the farm. The farmhouse allows the farmers, workers and often their families to reside in proximity to their workplace - namely the farm in question. This allows the farmers and workers to arrive at the workplace earlier, increasing the productivity of the farm.
Style
Sometimes it may refer to a building design style, or a building's former purpose. This may occur when the farming area has been developed for other purposes, but the building itself still stands. Styles vary from region to region, but more often the style is simplistic so to serve the needs (and the budget) of the owners.
Canadian Farmhouse
Canadian farmhouses were influenced by European settlers. In Quebec, the style varied from Gothic to Swiss. In Ontario, the farmhouses of the late 19th Century was of Victoria influence. Earlier ones used clapboard and later variations had brick. Many had porches out front. A dirt road would lead to the nearest concession road. As for out west, dwellings varied from single story wooden homesteads to straw huts. Wooden houses were built later as railroads allowed wood to be shipped from the Rockies (Alberta, BC, Montana) by 1915 they could be purchased as kits from the Eaton's catalog. Canadian homes often differ from their American counterparts in that the porch is enclosed.
Norwegian Farmhouse
Norwegian farmhouses used timber or logs and built in the Scandinavian Vernacular style. The first examples are traced back to the 1200s to the 1900s.
Farmhouses as country estates
An English rural farmhouse
Lately, "farmhouse" has come to be used to mean an expensive housing estate in the countryside, away from the city. In this modern extended use of the term, the farmhouse may or may not be related to an actual farm - frequently, in fact, "farmhouses" are not based around any actual farm. While farm produce sustained the traditional farmhouses, sustenance for the modern farmhouse is provided by outside resources. These modern farmhouses are often a rural retreat for wealthy people who come to these places for vacation and rest, or to escape the atmosphere of the city. While many of these farmhouses have been handed down through generations, where originally farm produce could have been the main revenue source, other such farmhouses are being built new.
These buildings tend to be more pragmatic than aesthetic, but often well-stocked or well-furnished in terms of food, insulation or in other aspects dealing with daily necessities. The supply of agricultural products from its environment tends to be a factor for this, as well as stressing the need for productivity and pragmatism in the survival of the farm. The farmhouse allows the farmers, workers and often their families to reside in proximity to their workplace - namely the farm in question. This allows the farmers and workers to arrive at the workplace earlier, increasing the productivity of the farm.
Style
Sometimes it may refer to a building design style, or a building's former purpose. This may occur when the farming area has been developed for other purposes, but the building itself still stands. Styles vary from region to region, but more often the style is simplistic so to serve the needs (and the budget) of the owners.
Canadian Farmhouse
Canadian farmhouses were influenced by European settlers. In Quebec, the style varied from Gothic to Swiss. In Ontario, the farmhouses of the late 19th Century was of Victoria influence. Earlier ones used clapboard and later variations had brick. Many had porches out front. A dirt road would lead to the nearest concession road. As for out west, dwellings varied from single story wooden homesteads to straw huts. Wooden houses were built later as railroads allowed wood to be shipped from the Rockies (Alberta, BC, Montana) by 1915 they could be purchased as kits from the Eaton's catalog. Canadian homes often differ from their American counterparts in that the porch is enclosed.
Norwegian Farmhouse
Norwegian farmhouses used timber or logs and built in the Scandinavian Vernacular style. The first examples are traced back to the 1200s to the 1900s.
Farmhouses as country estates
An English rural farmhouse
Lately, "farmhouse" has come to be used to mean an expensive housing estate in the countryside, away from the city. In this modern extended use of the term, the farmhouse may or may not be related to an actual farm - frequently, in fact, "farmhouses" are not based around any actual farm. While farm produce sustained the traditional farmhouses, sustenance for the modern farmhouse is provided by outside resources. These modern farmhouses are often a rural retreat for wealthy people who come to these places for vacation and rest, or to escape the atmosphere of the city. While many of these farmhouses have been handed down through generations, where originally farm produce could have been the main revenue source, other such farmhouses are being built new.
Dealing with Real Estate Agents
The real estate agents have a valuable source of potential deals for the real estate investor - the Multiple Listing Service. Unfortunately, real estate agents have a monopoly on this information, so they may be a necessary part of an investor’s game plan.
Dealing with real estate agents can be difficult as an investor. -Agents prefer home buyers with cash to put down, good credit and conventional buying power. Their interest is getting a commission with as little hassle as possible. Most agents have never done a creative real estate transaction with an investor, so they are not often receptive to unusual offers. Most agents equate a “nothing down” offer with a buyer who is not serious.
Offer a Reasonable Earnest Money. - You cannot present an offer with a $50 earnest money and expect an agent to take you seriously. You can expect to pay at least $500 as earnest money to get their attention. If you are presenting a solid cash offer, you should put up more money. If you are concerned with losing your earnest money, consider using a promissory note.
Offer a Short Closing Date. - Another way to get an agent to take you seriously is to offer a fast closing. Nothing makes an agent salivate more than the thought of a commission check in ten days. If the agent has another offer presented to him, he will usually advise his client to take the offer with a larger earnest money and faster close than an offer which is higher in price.
Insist on Presenting Creative Offers in Person. - If you present a creative offer to an agent, it will not be represented to the owner in the same enthusiastic fashion. As stated above, agents do not like creative offers - they like conventional offers from solid buyers. If you want the owner to hear all of the great benefits of your offer, insist on presenting the offer in person.
Appeal to the Agent’s Greed Factor. - Let’s face it . . . real estate agents are in the game to make money, just like anyone else in any other business. If you can offer the agent an incentive to make money out of the transaction, you will get his cooperation. If you present an offer which does not permit enough cash to come out of the deal to pay the agent, why would he cooperate with you? If you present a lease/option offer on a listed property, how will the agent receive a commission? You need to find a way for the agent to get paid, even if you pay him out of your own pocket.
Do Your Own Comps. - Sometimes you will get the opposite of an uncooperative agent - an overzealous agent. Be suspicious of an agent who tells you what a deal you are getting on a property. If it is such a good deal, why didn’t he buy it? Don’t take his word as to the value. Ask for a printout of comparable sales (not listed properties). Be aware that information contained in the MLS computer was entered by the listing broker and may be exaggerated. If a comparable sale shows the same square footage as the house you are looking at, take a drive by and see if it is accurate. Do your own assessment of value.
Fax Preliminary Offers First. - Don’t waste your time filling out a contract offer until you have preliminary approval. Most agents are not this formal and will take any offer in writing to the seller. Simply summarize your offer in writing and fax it to the listing agent. Once you have an oral approval, then take the time to fill out a contract and an earnest money check. NEVER put up earnest money until the offer is accepted!
Don't be Bullied by Uncooperative Agents. - If you cannot finesse an agent, don’t be afraid to stand up to him. Some agents are unethical and will refuse to present your offer. Many times the agent will lie and tell you that your offer was rejected when, in fact, it was never presented. If this is the case, do not be afraid to go over his head to the listing broker. If the listing broker is uncooperative, deal directly with the seller (unless, of course, you are also an agent).
Dealing with real estate agents can be difficult as an investor. -Agents prefer home buyers with cash to put down, good credit and conventional buying power. Their interest is getting a commission with as little hassle as possible. Most agents have never done a creative real estate transaction with an investor, so they are not often receptive to unusual offers. Most agents equate a “nothing down” offer with a buyer who is not serious.
Offer a Reasonable Earnest Money. - You cannot present an offer with a $50 earnest money and expect an agent to take you seriously. You can expect to pay at least $500 as earnest money to get their attention. If you are presenting a solid cash offer, you should put up more money. If you are concerned with losing your earnest money, consider using a promissory note.
Offer a Short Closing Date. - Another way to get an agent to take you seriously is to offer a fast closing. Nothing makes an agent salivate more than the thought of a commission check in ten days. If the agent has another offer presented to him, he will usually advise his client to take the offer with a larger earnest money and faster close than an offer which is higher in price.
Insist on Presenting Creative Offers in Person. - If you present a creative offer to an agent, it will not be represented to the owner in the same enthusiastic fashion. As stated above, agents do not like creative offers - they like conventional offers from solid buyers. If you want the owner to hear all of the great benefits of your offer, insist on presenting the offer in person.
Appeal to the Agent’s Greed Factor. - Let’s face it . . . real estate agents are in the game to make money, just like anyone else in any other business. If you can offer the agent an incentive to make money out of the transaction, you will get his cooperation. If you present an offer which does not permit enough cash to come out of the deal to pay the agent, why would he cooperate with you? If you present a lease/option offer on a listed property, how will the agent receive a commission? You need to find a way for the agent to get paid, even if you pay him out of your own pocket.
Do Your Own Comps. - Sometimes you will get the opposite of an uncooperative agent - an overzealous agent. Be suspicious of an agent who tells you what a deal you are getting on a property. If it is such a good deal, why didn’t he buy it? Don’t take his word as to the value. Ask for a printout of comparable sales (not listed properties). Be aware that information contained in the MLS computer was entered by the listing broker and may be exaggerated. If a comparable sale shows the same square footage as the house you are looking at, take a drive by and see if it is accurate. Do your own assessment of value.
Fax Preliminary Offers First. - Don’t waste your time filling out a contract offer until you have preliminary approval. Most agents are not this formal and will take any offer in writing to the seller. Simply summarize your offer in writing and fax it to the listing agent. Once you have an oral approval, then take the time to fill out a contract and an earnest money check. NEVER put up earnest money until the offer is accepted!
Don't be Bullied by Uncooperative Agents. - If you cannot finesse an agent, don’t be afraid to stand up to him. Some agents are unethical and will refuse to present your offer. Many times the agent will lie and tell you that your offer was rejected when, in fact, it was never presented. If this is the case, do not be afraid to go over his head to the listing broker. If the listing broker is uncooperative, deal directly with the seller (unless, of course, you are also an agent).
Real Estate Agents
With every burgeoning reak estate market comes a high number of real estate agents. Knowing which of these realtors to select is may just seem like yet another decision in the home buying process, but it is also one of the most critical ones you will make.
Every real estate market has good realtors representing their properties but we prefer great real estate agents who showcase only the properties that you really wish to see. Through our wide ranging search, we have selected the best real estate agents in each of the regions you will see. When you select one of the real estate agents on our site, you will be safe in the knowledge that your service will be one of absolute professionalism.
Our real estate agents pride themselves on many things; in-depth knowledge of their chosen region, proven track records in the competitive world of realty and a professional acumen which makes them stand out of the realtor crowd. Showcasing homes is the business of realtors the world over but, as with any business, there will be those who consider it a passion to be the best real estate agent in the region.
Homes for sale can often look the same, but one of the very best real estate agents will exhibit each and every property in a light that will make it look like a real home. Select from our long list of realtors and that is the kind of service you can expect. Real estate is a competitive business and realtors have to ensure the very highest standards of customer service to compliment the quality of the homes for sale.
After making the decision to buy or indeed sell a home, selecting a real estate agent is next. Making that easier for you is what we want and what we know we can deliver.
Every real estate market has good realtors representing their properties but we prefer great real estate agents who showcase only the properties that you really wish to see. Through our wide ranging search, we have selected the best real estate agents in each of the regions you will see. When you select one of the real estate agents on our site, you will be safe in the knowledge that your service will be one of absolute professionalism.
Our real estate agents pride themselves on many things; in-depth knowledge of their chosen region, proven track records in the competitive world of realty and a professional acumen which makes them stand out of the realtor crowd. Showcasing homes is the business of realtors the world over but, as with any business, there will be those who consider it a passion to be the best real estate agent in the region.
Homes for sale can often look the same, but one of the very best real estate agents will exhibit each and every property in a light that will make it look like a real home. Select from our long list of realtors and that is the kind of service you can expect. Real estate is a competitive business and realtors have to ensure the very highest standards of customer service to compliment the quality of the homes for sale.
After making the decision to buy or indeed sell a home, selecting a real estate agent is next. Making that easier for you is what we want and what we know we can deliver.
Why Most Real Estate Investors Fail
1. Concentration on Technique (Lease Option, Subject To, Foreclosure, etc.) Rather Than on Property
Most investors new to real estate get mesmerized by a technique for acquiring control of real property and or a technique for turning a quick profit. These "techniques", often taught by "gurus" at $5,000 - $10,000 for training, workshops and tapes, emphasize no need for extended time and financial commitment (lease option, subject to) or emphasize quick turn profitability (foreclosures, flips, over financing). These are analogous to the technical or chart reading aspect of stock market investing; it doesn’t matter what property you find, just apply the technique.
The truth is that any of these techniques can be successfully utilized given the right set of circumstances. However, they are applicable in only a very small percentage of cases, and usually after an extended negotiation or as an afterthought to the property acquisition process. Successful real estate investors concentrate on the property itself rather than on a specific technique. This not only allows the investor to concentrate directly on where most profitability resides, but also opens a much wider array of potential "deals" for the investor to consider. Further, the investor can concentrate on the much more reliable profitability formula of "adding value", rather than on the more suspect and ethically questionable formula of finding a naïve individual to work the other side of the real property transaction.
2. Plan on Doing Many Deals Each With a Small Amount of Profit Rather Than a Few Deals Each with Substantial Profit
Many investors both experienced as well as new are thrilled with a small (under $10,000) profit on each deal. Since unexpected expenses always seem to creep up when least expected in real estate investing, the actual profitability of these transactions range from half the expected profit to no profit. In order for the investor to earn enough income to warrant the time commitment, monetary commitment and risk involved, he would have to participate in a large number of deals annually. And since it always takes many negotiations to produce a single deal, and many property inspections to find a single property worth negotiating on, real estate investment will become a full time real estate business. To be sure, there are people who successfully play the low profit high numbers game; most Homevestor franchisees come to mind. But if working 70 plus hour weeks and buying, rehabbing and selling 50 plus properties per year sounds like a worse life than the corporate world you’re trying to leave, you probably want to find a different approach.
In my many years investing in real estate, financing real estate ventures, and observing successful real estate investors, I have come to the conclusion that participating in a small number of highly profitable transactions no only produces more monetary success but also leads to a much more leisurely, less stressful and more satisfying experience. I personally don’t believe any serious investor need look at any transaction with less than a $50,000 profit, with the goal of eventually only considering deals with a $100,000 plus profitability. If you don’t think these kind of deals are available, then read 3. Below.
3. Working in a Crowded Arena (Single Family Homes) Rather Than an Area with Less Competition and More Opportunity (Commercial)
From real estate investment seminars to real estate investment clubs to the proliferation of how to real estate books for sale, one would think that the single family home is the only property type available. And with the tens of thousands of new real estate investors as well as the invent and expansion of the franchised rehab businesses, the single family home as a real estate investment has become a very competitive and crowded field. Whereas just five years ago a homeowner needing to sell his home had very few and limited options if the home needed major repair, he now has a much larger market demand to sell into. The homeowner can sell to a much larger choice of investors interested in purchasing his home, he can obtain refinancing money to repair his home even with credit scores so low they would not have even been considered five years ago, or he can auction his property and probably receive a cash offer at fair market value. All this has made finding a below market priced single family home investment like finding the proverbial needle in a haystack.
Rather than competing in the crowded and overly competitive single family home residential market, with its limited profit potential and heavy time commitment, real estate investors would have geometrically increased chances for success if they spent the same time and energy learning about the various areas of commercial real estate. Not only is this field significantly less crowded and significantly less competitive, but the real estate investor is able to earn significant returns on far fewer transactions. To be sure, there are tens if not hundreds of types of commercial properties and transactions; the successful real estate investor will educate himself with a good overview and then decide on a area of concentration. Rather than waste time fighting for the left over scraps in the single family residential market, the investor can be breathing the rarefied of the commercial real estate market.
4. Having No Sustainable Plan
"I want to make a lot of money" is not a sustainable business plan. "I want to specialize in foreclosures, lease options, and subject to" is not a sustainable business plan. "I buy property for cash or terms" is not a sustainable business plan. Enough said. If you don’t know how to develop a workable plan for real estate investing buy a book on business plans, take a small business administration course, or better yet attend my seminars and workshops.
5. Trying to Do Deals with No Equity Contribution
Yes it’s possible to purchase real estate with no money. Yes it’s possible to flip properties for large profit with no investment. Yes it’s possible to option property for $100. That being said, it’s infinitely easier to successfully participate in real estate transactions when you as a real estate investor have an equity contribution in the deal. When you put some money in a deal three great things begin to happen. Conventional lenders become interested in financing your transaction and 20 % hard money or 30 % equity share becomes 6 % conventional financing. Sellers. Especially institutional sellers, take you seriously and are willing to sell their property at large discounts. And outside investors become attracted to your deal syndication and limited partnerships. Life becomes easier and much more profitable.
Most investors new to real estate get mesmerized by a technique for acquiring control of real property and or a technique for turning a quick profit. These "techniques", often taught by "gurus" at $5,000 - $10,000 for training, workshops and tapes, emphasize no need for extended time and financial commitment (lease option, subject to) or emphasize quick turn profitability (foreclosures, flips, over financing). These are analogous to the technical or chart reading aspect of stock market investing; it doesn’t matter what property you find, just apply the technique.
The truth is that any of these techniques can be successfully utilized given the right set of circumstances. However, they are applicable in only a very small percentage of cases, and usually after an extended negotiation or as an afterthought to the property acquisition process. Successful real estate investors concentrate on the property itself rather than on a specific technique. This not only allows the investor to concentrate directly on where most profitability resides, but also opens a much wider array of potential "deals" for the investor to consider. Further, the investor can concentrate on the much more reliable profitability formula of "adding value", rather than on the more suspect and ethically questionable formula of finding a naïve individual to work the other side of the real property transaction.
2. Plan on Doing Many Deals Each With a Small Amount of Profit Rather Than a Few Deals Each with Substantial Profit
Many investors both experienced as well as new are thrilled with a small (under $10,000) profit on each deal. Since unexpected expenses always seem to creep up when least expected in real estate investing, the actual profitability of these transactions range from half the expected profit to no profit. In order for the investor to earn enough income to warrant the time commitment, monetary commitment and risk involved, he would have to participate in a large number of deals annually. And since it always takes many negotiations to produce a single deal, and many property inspections to find a single property worth negotiating on, real estate investment will become a full time real estate business. To be sure, there are people who successfully play the low profit high numbers game; most Homevestor franchisees come to mind. But if working 70 plus hour weeks and buying, rehabbing and selling 50 plus properties per year sounds like a worse life than the corporate world you’re trying to leave, you probably want to find a different approach.
In my many years investing in real estate, financing real estate ventures, and observing successful real estate investors, I have come to the conclusion that participating in a small number of highly profitable transactions no only produces more monetary success but also leads to a much more leisurely, less stressful and more satisfying experience. I personally don’t believe any serious investor need look at any transaction with less than a $50,000 profit, with the goal of eventually only considering deals with a $100,000 plus profitability. If you don’t think these kind of deals are available, then read 3. Below.
3. Working in a Crowded Arena (Single Family Homes) Rather Than an Area with Less Competition and More Opportunity (Commercial)
From real estate investment seminars to real estate investment clubs to the proliferation of how to real estate books for sale, one would think that the single family home is the only property type available. And with the tens of thousands of new real estate investors as well as the invent and expansion of the franchised rehab businesses, the single family home as a real estate investment has become a very competitive and crowded field. Whereas just five years ago a homeowner needing to sell his home had very few and limited options if the home needed major repair, he now has a much larger market demand to sell into. The homeowner can sell to a much larger choice of investors interested in purchasing his home, he can obtain refinancing money to repair his home even with credit scores so low they would not have even been considered five years ago, or he can auction his property and probably receive a cash offer at fair market value. All this has made finding a below market priced single family home investment like finding the proverbial needle in a haystack.
Rather than competing in the crowded and overly competitive single family home residential market, with its limited profit potential and heavy time commitment, real estate investors would have geometrically increased chances for success if they spent the same time and energy learning about the various areas of commercial real estate. Not only is this field significantly less crowded and significantly less competitive, but the real estate investor is able to earn significant returns on far fewer transactions. To be sure, there are tens if not hundreds of types of commercial properties and transactions; the successful real estate investor will educate himself with a good overview and then decide on a area of concentration. Rather than waste time fighting for the left over scraps in the single family residential market, the investor can be breathing the rarefied of the commercial real estate market.
4. Having No Sustainable Plan
"I want to make a lot of money" is not a sustainable business plan. "I want to specialize in foreclosures, lease options, and subject to" is not a sustainable business plan. "I buy property for cash or terms" is not a sustainable business plan. Enough said. If you don’t know how to develop a workable plan for real estate investing buy a book on business plans, take a small business administration course, or better yet attend my seminars and workshops.
5. Trying to Do Deals with No Equity Contribution
Yes it’s possible to purchase real estate with no money. Yes it’s possible to flip properties for large profit with no investment. Yes it’s possible to option property for $100. That being said, it’s infinitely easier to successfully participate in real estate transactions when you as a real estate investor have an equity contribution in the deal. When you put some money in a deal three great things begin to happen. Conventional lenders become interested in financing your transaction and 20 % hard money or 30 % equity share becomes 6 % conventional financing. Sellers. Especially institutional sellers, take you seriously and are willing to sell their property at large discounts. And outside investors become attracted to your deal syndication and limited partnerships. Life becomes easier and much more profitable.
The Wrong Way to Invest in Real Estate
"Real estate fever" . . . it's hit the Country like a plague. Zillions of "newbies" are hitting the bandwagon, trying to make a profit where they lost in the stock market. I meet them all the time, and many are making big mistakes!
1. Stock Market Mentality
You'd think after losing $7 trillion in the stock market people would have learned! Nope, they are making the same mistake, which is assuming what happened yesterday will happen tommorrow. Nine of ten new investors I meet say they are interested in real estate because they saw someone else make money from the rapid appreciation of the market over the last few years. But, buying real estate solely for short-term appreciation is often a big gamble! If you buy real estate to hold for 15 years or more, the chances are you will come out on top. If you buy a property and flip it in within a year, you probably are fine, too. And, despite the risk, many people can intelligently time the "boom" of a local market (or subdivision within a market) and make a profit. But, if you buy a rental property for full market price with break even or negative cash flow, you'd better have a backup plan if the market doesn't keep going up. Investing is a lot like surfing... if you don't know how to ride the wave, you will drown!
So, should you refrain from investing if you think the market has peaked? Absolutely not! You can find bargain-priced properties in every real estate market, even the hottest. You can find low-interest rate financing that will increase your cash flow so if values drop, you still are covered. You can plan short-term (six to 12 months), because real estate markets rise and fall slowly. And, if you keep a cash reserve for your business, you won't sweat when the market tanks, because you know that in the long run, real estate markets virtually always come back.
2. Investing Blind
You'd think after losing $7 trillion in the stock market people would have learned! Nope, they are making the same mistake, which is blindly buying real estate based on bogus advice or complete lack of education. Real estate is one of the few investments in which risk is directly proportional to knowledge. True, it has a higher learning curve than investing in the stock market, but there's no proof that having knowledge of the stock market reduces risk (just ask your mutual fund manager).
I read a comment on a real estate discussion group on the Internet. In response to an inquiry as to whether a particular seminar or training program was worth the money, someone answered, "Why waste your money on that stuff? Just use your money as a down payment and learn as you go." This is probably the worst advice you could ever give a beginner. Money for real estate deals is easy to find if you can find good deals. But, you won't know what a good deal is without having first invested in your education!
The more knowledge of real estate investing techniques, financing, acquisition, negotiating and, of course, your local marketplace, the less risky your investments will be. A bargain real estate purchase will generally always be a safe investment; a bargain stock purchase isn't - after all, who says the company you bought into will be in business next year?.
3. No Cash Reserves
Ask anyone in real estate long term (or any other business, for that matter) and they will tell you the two most important words for survival are: "cash flow." Heck, even K-Mart failed to learn that valuable lesson!
In order to stay in real estate long term, you need cash reserves. Buying real estate nothing down is easy; handling negative cash flow, repairs and other expenses in the meantime is the trick. In fact, if you can handle the bad times, real estate will always make you come out on top. Lack of cash reserves puts unnecessary pressure on you to do substandard repairs, accept less than qualified tenants and give into tenants' demands for fear of vacancy.
When you have a sufficient cash reserve, you act rationally. You hold out for a higher sales price. You hold out for a qualified tenant. You leave properties vacant rather than rent to low-lifes. You call a tenant's bluff when they threaten to leave. You take care of necessary repairs and improvements on your properties. It's a whole different ballgame than operating from a lack of cash. Like I said, buying properties with no money down isn't hard; it's handling the cash flow. In other words, you can buy real estate without money, you just can't survive in business without cash reserves. Thus, consider accumulating cash reserves before investing in rental properties.
4. Being Greedy
Many investors get started flipping properties to other investors, which is a good idea to generate cash reserves. However, you must be realistic about how much profit is in a deal. If there is a potential for a $20,000 profit in a rehab project, you can't expect to make $10,000 flipping that property to a rehabber. A rehabber has a huge risk in embarking in such a project and wants a large enough profit to justify the risk.
For example, if a house needs $10,000 in repairs, the rehabber investor wants to make at least a $20,000 profit. If you find a deal with $20,000 in profit potential, how could you expect to get $10,000 for flipping the property if the rehab investor you flip it to is only going to make $10,000? You should be happy making $2,500 and moving on to the next deal. If you want to make more than $2,500 on such a deal, then you must find and negotiate a better bargain that has more profit potential.
5. Treating Real Estate as Anything Other Than a Business
People are lured to real estate because of the quick buck that it promises. Don't hold your breath, you won't get rich quick. An "overnight sensation" usually takes about five years. More than ninety percent of the people who take a real estate seminar quit after three months.
Why the high fallout rate? Lack of action and unrealistic expectations. Real estate investing should be treated with the seriousness of a career. It takes months, even years for a business to cultivate customers and have a life of its own. You need to treat real estate like any other business. Give yourself at least six months to see if real estate works for you. It may even take a year before you buy your first property. Maybe in the second year you will buy three or four properties. If you work hard at it and keep your eyes and ears open, you may even find your first deal in 30 days. Certainly, you will not make money by talking or thinking about it; you must go out and take action.
1. Stock Market Mentality
You'd think after losing $7 trillion in the stock market people would have learned! Nope, they are making the same mistake, which is assuming what happened yesterday will happen tommorrow. Nine of ten new investors I meet say they are interested in real estate because they saw someone else make money from the rapid appreciation of the market over the last few years. But, buying real estate solely for short-term appreciation is often a big gamble! If you buy real estate to hold for 15 years or more, the chances are you will come out on top. If you buy a property and flip it in within a year, you probably are fine, too. And, despite the risk, many people can intelligently time the "boom" of a local market (or subdivision within a market) and make a profit. But, if you buy a rental property for full market price with break even or negative cash flow, you'd better have a backup plan if the market doesn't keep going up. Investing is a lot like surfing... if you don't know how to ride the wave, you will drown!
So, should you refrain from investing if you think the market has peaked? Absolutely not! You can find bargain-priced properties in every real estate market, even the hottest. You can find low-interest rate financing that will increase your cash flow so if values drop, you still are covered. You can plan short-term (six to 12 months), because real estate markets rise and fall slowly. And, if you keep a cash reserve for your business, you won't sweat when the market tanks, because you know that in the long run, real estate markets virtually always come back.
2. Investing Blind
You'd think after losing $7 trillion in the stock market people would have learned! Nope, they are making the same mistake, which is blindly buying real estate based on bogus advice or complete lack of education. Real estate is one of the few investments in which risk is directly proportional to knowledge. True, it has a higher learning curve than investing in the stock market, but there's no proof that having knowledge of the stock market reduces risk (just ask your mutual fund manager).
I read a comment on a real estate discussion group on the Internet. In response to an inquiry as to whether a particular seminar or training program was worth the money, someone answered, "Why waste your money on that stuff? Just use your money as a down payment and learn as you go." This is probably the worst advice you could ever give a beginner. Money for real estate deals is easy to find if you can find good deals. But, you won't know what a good deal is without having first invested in your education!
The more knowledge of real estate investing techniques, financing, acquisition, negotiating and, of course, your local marketplace, the less risky your investments will be. A bargain real estate purchase will generally always be a safe investment; a bargain stock purchase isn't - after all, who says the company you bought into will be in business next year?.
3. No Cash Reserves
Ask anyone in real estate long term (or any other business, for that matter) and they will tell you the two most important words for survival are: "cash flow." Heck, even K-Mart failed to learn that valuable lesson!
In order to stay in real estate long term, you need cash reserves. Buying real estate nothing down is easy; handling negative cash flow, repairs and other expenses in the meantime is the trick. In fact, if you can handle the bad times, real estate will always make you come out on top. Lack of cash reserves puts unnecessary pressure on you to do substandard repairs, accept less than qualified tenants and give into tenants' demands for fear of vacancy.
When you have a sufficient cash reserve, you act rationally. You hold out for a higher sales price. You hold out for a qualified tenant. You leave properties vacant rather than rent to low-lifes. You call a tenant's bluff when they threaten to leave. You take care of necessary repairs and improvements on your properties. It's a whole different ballgame than operating from a lack of cash. Like I said, buying properties with no money down isn't hard; it's handling the cash flow. In other words, you can buy real estate without money, you just can't survive in business without cash reserves. Thus, consider accumulating cash reserves before investing in rental properties.
4. Being Greedy
Many investors get started flipping properties to other investors, which is a good idea to generate cash reserves. However, you must be realistic about how much profit is in a deal. If there is a potential for a $20,000 profit in a rehab project, you can't expect to make $10,000 flipping that property to a rehabber. A rehabber has a huge risk in embarking in such a project and wants a large enough profit to justify the risk.
For example, if a house needs $10,000 in repairs, the rehabber investor wants to make at least a $20,000 profit. If you find a deal with $20,000 in profit potential, how could you expect to get $10,000 for flipping the property if the rehab investor you flip it to is only going to make $10,000? You should be happy making $2,500 and moving on to the next deal. If you want to make more than $2,500 on such a deal, then you must find and negotiate a better bargain that has more profit potential.
5. Treating Real Estate as Anything Other Than a Business
People are lured to real estate because of the quick buck that it promises. Don't hold your breath, you won't get rich quick. An "overnight sensation" usually takes about five years. More than ninety percent of the people who take a real estate seminar quit after three months.
Why the high fallout rate? Lack of action and unrealistic expectations. Real estate investing should be treated with the seriousness of a career. It takes months, even years for a business to cultivate customers and have a life of its own. You need to treat real estate like any other business. Give yourself at least six months to see if real estate works for you. It may even take a year before you buy your first property. Maybe in the second year you will buy three or four properties. If you work hard at it and keep your eyes and ears open, you may even find your first deal in 30 days. Certainly, you will not make money by talking or thinking about it; you must go out and take action.
Advice For New Investors
I have some advice to offer new investors.
1. Quality Over Quantity
In the past, I set goals to complete a certain number of deals and as a result, found myself at times pursuing volume over quality. This sometimes put me into bad situations, costing me both time and money. For example, I might have paid too much to buy a home just so I could say I did a deal and hit my target. While I did experience many situations that other investors never encounter, this is not the way to do business.
Today, I realize that I didn’t need to do as many deals as I’ve done. Now I pass over a ton of opportunities that I would have taken years ago. Rather, I sit back and cherry-pick, waiting for the “home runs” to come along.
That’s not to say that beginning investors should wait for the big deals. Most don’t have the resources to compete with the experienced investors, including myself, who don’t need the smaller deals to survive but can afford to be patient. We can bide our time until the best deals present themselves and still have enough resources to take advantage of them when they do.
What I am saying is that beginning investors should do what they need to do to survive, keeping in mind that it is better to do one quality deal than a multitude of average deals. As a beginner, you must get into the game, but do it carefully with good deals. Then go from first to second to third to home, taking it one step at a time. Crawl before you walk and walk before you run. Otherwise, by rushing into things, you run the risk of making mistakes that will set you back months or even years.
2. Set Goals And Put Them On Paper
I did not have concrete goals when I began, so two years after getting started, I was in about the same place as when I started. I ran around in circles and covered a lot of ground, but didn’t get too far from my starting point. Only then did I develop a plan (smart, huh? Only took a few dozen “seminars” and a few more whacks upside my head).
So I teach my students to put together a plan sooner rather than later, preferably before they even start investing. Anyone who drafts a realistic plan and sticks to it can achieve as much in one year as I did in three.
Not that creating a plan is easy, especially when you don’t know what to expect. Accurate goal setting is actually very difficult, and not many people teach you what you need to set REAL goals. Most teach goals that get people excited, good in the sense that it usually prompts people to take action, but bad in that it develops unrealistic expectations and sets people up for disappointment.
To set realistic goals, speak with experienced investors in your chosen field (wholesaling, rehabbing, lease-options, “subject to”) and get their honest opinions regarding profits per deal and the average time required to complete a deal. Then, based on this and your current resources of cash and credit, set your long-term cash, cash flow and equity goals for one year, three years and five years. Once you have these long-term goals, fill in your short-term goals of three, six and nine months by outlining the steps you need to take to accomplish your long-term goals. Unless you draft a plan similar to this and truly commit to it, you are going nowhere.
3. If Possible, Keep Your Best Deals
Looking back, I have owned a lot of homes that I wish I would have kept. I don’t regret having sold them since every sale contributed to my success, but I did have some gems that have more than doubled in value since I sold them.
When I sold, I just didn’t believe that the areas would take off like Realtors and others were telling me. So I cashed out and used the profits for other things. If I had held the 50 best deals that I have sold to others and done nothing else, my net worth would probably be three times higher than what it is today.
Not that I’m complaining. My net worth used to be negative, and today it is pretty respectable. I’m just advising you to hold onto your best deals if you can. Sometimes, though, it is necessary and understandable to sell a property for cash profits even though it would be nice to keep it. Use your best judgment.
4. Don’t Limit Your Profits
When you purchase a great deal, don’t feel obligated to pass all of the savings on to your buyer. I could have generated more profits than I did from many of the properties that I wholesaled. Often, when I purchased a SUPER deal, I passed along the SUPER savings to my buyer with the attitude that I should only make $2k-$4k per transaction.
Well, this was a mistake. My advice to you is to take what you can get. Don’t inflate your prices above the market and gouge people. Give them a good value. However, don’t think it’s necessary to limit your profits just so a buyer can benefit. After all, this is business. Let the market set your price. There will be plenty of times when your profit isn’t as large as you expected. Take advantage of the big hits when they come.
5. Separate Business And Charity
Sometimes, I used my business as a charity when I shouldn’t have. My recommendation for you is never to do the same. Don’t let someone live rent free or give someone else more for a service than what it makes good business sense to give.
I’ve learned that I need to run my business for a profit, and that I need to do all I can to keep it profitable. I’ve also learned that it’s OK for me to be charitable with my profits, but that I can’t be charitable with my business. Giving your business away before you make profits cuts your wellspring off at its source. It’s not prudent, and your business will suffer greatly as a result if you choose to do so.
6. Tip Number Six: Hold On To The J.O.B. As Long As You Can
I know it’s hard to hear this, especially for those of you disgusted with your current position, but I recommend that beginners with good jobs hold onto them for a while. They provide a safety net while you are learning and particularly allow you to establish yourself with banks and credit card companies. Convincing these organizations to work with you as a self-employed person is tough.
7. Start As Early As You Can
I first became interested in investing at the age of 18, and I wish I had pursued it from that age. Instead, I waited 10 more years to get started. As of this writing, I’ve only been investing for 5 years and it’s hard for me to imagine, based on my current position, where I would be if I had started when I was 18 years old. It’s never too late, but you need to start NOW!
8. Use Partners Wisely
Use a partner only when you need them. In other words, choose someone with time, money, knowledge or skills that you don’t have. They should bring to the table something that you need. All too often, two people with a dream and nothing else decide to be partners. Not good. Partners need to complement each other, not have the same qualities.
Today, I teach others to use partners strictly on a deal-by-deal basis. The form of partnership I teach most often is one where one person puts up all of the money and the other is responsible for everything else.
In retrospect, I would not have taken on the one partner I had. In time, I didn’t need a partner anymore, yet I still had one and felt as though I was giving half of everything away. He probably felt the same way.
9. Dare To Dream
Finally, I’d like to stress that if you can dream it, you can do it through effort and perseverance. Having money, a decent job, and good credit make investing easier, but are not necessary.
When I began my career as a real estate investor, I had no money, no job and poor credit. In the past five years, through the grace of God, I have come a long way. So set your goals and start taking the steps necessary to achieve them. Reevaluate and adjust every so often, but don’t quit and don’t let anything stop you.
1. Quality Over Quantity
In the past, I set goals to complete a certain number of deals and as a result, found myself at times pursuing volume over quality. This sometimes put me into bad situations, costing me both time and money. For example, I might have paid too much to buy a home just so I could say I did a deal and hit my target. While I did experience many situations that other investors never encounter, this is not the way to do business.
Today, I realize that I didn’t need to do as many deals as I’ve done. Now I pass over a ton of opportunities that I would have taken years ago. Rather, I sit back and cherry-pick, waiting for the “home runs” to come along.
That’s not to say that beginning investors should wait for the big deals. Most don’t have the resources to compete with the experienced investors, including myself, who don’t need the smaller deals to survive but can afford to be patient. We can bide our time until the best deals present themselves and still have enough resources to take advantage of them when they do.
What I am saying is that beginning investors should do what they need to do to survive, keeping in mind that it is better to do one quality deal than a multitude of average deals. As a beginner, you must get into the game, but do it carefully with good deals. Then go from first to second to third to home, taking it one step at a time. Crawl before you walk and walk before you run. Otherwise, by rushing into things, you run the risk of making mistakes that will set you back months or even years.
2. Set Goals And Put Them On Paper
I did not have concrete goals when I began, so two years after getting started, I was in about the same place as when I started. I ran around in circles and covered a lot of ground, but didn’t get too far from my starting point. Only then did I develop a plan (smart, huh? Only took a few dozen “seminars” and a few more whacks upside my head).
So I teach my students to put together a plan sooner rather than later, preferably before they even start investing. Anyone who drafts a realistic plan and sticks to it can achieve as much in one year as I did in three.
Not that creating a plan is easy, especially when you don’t know what to expect. Accurate goal setting is actually very difficult, and not many people teach you what you need to set REAL goals. Most teach goals that get people excited, good in the sense that it usually prompts people to take action, but bad in that it develops unrealistic expectations and sets people up for disappointment.
To set realistic goals, speak with experienced investors in your chosen field (wholesaling, rehabbing, lease-options, “subject to”) and get their honest opinions regarding profits per deal and the average time required to complete a deal. Then, based on this and your current resources of cash and credit, set your long-term cash, cash flow and equity goals for one year, three years and five years. Once you have these long-term goals, fill in your short-term goals of three, six and nine months by outlining the steps you need to take to accomplish your long-term goals. Unless you draft a plan similar to this and truly commit to it, you are going nowhere.
3. If Possible, Keep Your Best Deals
Looking back, I have owned a lot of homes that I wish I would have kept. I don’t regret having sold them since every sale contributed to my success, but I did have some gems that have more than doubled in value since I sold them.
When I sold, I just didn’t believe that the areas would take off like Realtors and others were telling me. So I cashed out and used the profits for other things. If I had held the 50 best deals that I have sold to others and done nothing else, my net worth would probably be three times higher than what it is today.
Not that I’m complaining. My net worth used to be negative, and today it is pretty respectable. I’m just advising you to hold onto your best deals if you can. Sometimes, though, it is necessary and understandable to sell a property for cash profits even though it would be nice to keep it. Use your best judgment.
4. Don’t Limit Your Profits
When you purchase a great deal, don’t feel obligated to pass all of the savings on to your buyer. I could have generated more profits than I did from many of the properties that I wholesaled. Often, when I purchased a SUPER deal, I passed along the SUPER savings to my buyer with the attitude that I should only make $2k-$4k per transaction.
Well, this was a mistake. My advice to you is to take what you can get. Don’t inflate your prices above the market and gouge people. Give them a good value. However, don’t think it’s necessary to limit your profits just so a buyer can benefit. After all, this is business. Let the market set your price. There will be plenty of times when your profit isn’t as large as you expected. Take advantage of the big hits when they come.
5. Separate Business And Charity
Sometimes, I used my business as a charity when I shouldn’t have. My recommendation for you is never to do the same. Don’t let someone live rent free or give someone else more for a service than what it makes good business sense to give.
I’ve learned that I need to run my business for a profit, and that I need to do all I can to keep it profitable. I’ve also learned that it’s OK for me to be charitable with my profits, but that I can’t be charitable with my business. Giving your business away before you make profits cuts your wellspring off at its source. It’s not prudent, and your business will suffer greatly as a result if you choose to do so.
6. Tip Number Six: Hold On To The J.O.B. As Long As You Can
I know it’s hard to hear this, especially for those of you disgusted with your current position, but I recommend that beginners with good jobs hold onto them for a while. They provide a safety net while you are learning and particularly allow you to establish yourself with banks and credit card companies. Convincing these organizations to work with you as a self-employed person is tough.
7. Start As Early As You Can
I first became interested in investing at the age of 18, and I wish I had pursued it from that age. Instead, I waited 10 more years to get started. As of this writing, I’ve only been investing for 5 years and it’s hard for me to imagine, based on my current position, where I would be if I had started when I was 18 years old. It’s never too late, but you need to start NOW!
8. Use Partners Wisely
Use a partner only when you need them. In other words, choose someone with time, money, knowledge or skills that you don’t have. They should bring to the table something that you need. All too often, two people with a dream and nothing else decide to be partners. Not good. Partners need to complement each other, not have the same qualities.
Today, I teach others to use partners strictly on a deal-by-deal basis. The form of partnership I teach most often is one where one person puts up all of the money and the other is responsible for everything else.
In retrospect, I would not have taken on the one partner I had. In time, I didn’t need a partner anymore, yet I still had one and felt as though I was giving half of everything away. He probably felt the same way.
9. Dare To Dream
Finally, I’d like to stress that if you can dream it, you can do it through effort and perseverance. Having money, a decent job, and good credit make investing easier, but are not necessary.
When I began my career as a real estate investor, I had no money, no job and poor credit. In the past five years, through the grace of God, I have come a long way. So set your goals and start taking the steps necessary to achieve them. Reevaluate and adjust every so often, but don’t quit and don’t let anything stop you.
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