Income for Life

Bloody enough for a billion

"Buy when there's blood in the streets."

It's a phrase we've all heard, an old Wall Street adage attributed to Baron de Rothschild, quoted often by other expert investor types and mentioned before on this blog. It refers to buying during market lows, when fear has scared off others and huge discounts are to be had. It's a phrase that fits the current real estate markets in many parts of the United States.

And while the recent data suggests that falling prices are finally starting to boost home sales, it's probably safe to say that the "blood" left on the streets - and everywhere elese, it seems - by the real estate bubble's burst and the subprime mortgage meltdown has scared off some would-be buyers.

But savvy investors aren't queasy about blood. And the latest news of a huge real estate play by a group of investors comes to us from one of the bloodiest of the bloody states: Florida.

The news? According to one Florida newspaper, a London real estate group is raising $1 billion to purchase luxury homes in Florida. The asset management group's plan is to buy bank-owned homes and hold them for as long as 10 years. A billion dollars worth of homes. The name for the project is the Florida Prime Residentail Opportunity Fund.

Did you catch that? They put the word "opportunity" in the name. And they are committing a billion dollars to this opportunity. I know $1 billion isn't going to buy as much property in Florida as it would here in Cleveland, but it's still a lot of homes. It's a substantial investment. And it's going to have a substantial payoff.

Yes, there are "experts" guessing that home prices in some areas of the biggest run-ups during the real estate boom might see declines for two or more years. So the initial investment of $1 billion could drop in value before recovering.

But the plan is not to flip these properties, as other buyers of distressed homes are trying to do. The FPROF strategy is buy and hold for maybe a decade. It's an investment, not speculation. And it's an investment in an asset - ocean-front land in a sunny coastal state - that is scarce. It's an investment into an asset that has always been in demand and always appreciated at a high rate (before the bubble burst) relative to the rest of the country. In the two years prior to the real estate market crashing there, prices in the Miami area increased 50 percent. In two years! Do you think this group cares if the market has hit bottom yet? With a 10-year plan, does it matter?

And if it doesn't matter to investors with a billion dollars in the game, why does the "bottom" seem to matter to so many others?

People with $1 billion to invest know what they're doing. And this group of Brits are teaching us a lesson: A bargain is a bargain, and the biggest bargains are apparently found where it's bloodiest.

Mike Sivula - Income for Life Cleveland

Real Estate Investing is Often "MythUnderstood"

The wealth building power of real estate investing is a time-proven fact. Seems simple, right? So, why don’t more people invest in real estate?

The answer lies in the myths and misunderstandings surrounding investing. In his best-selling book, The Millionaire Real Estate Investor, Gary Keller talks about five “mythunderstandings” that can derail investors. These beliefs are often used as justification for failure, and many are repeated widely as cautionary tales.

Investing Myth 1: Investing is Complicated

Truth: Investing is Only as Complicated as You Make It

Almost anything taken as a whole can appear more complex than it really is. However, you don’t need to know everything in order to do something. Seek the knowledge you need to get in the game. 

Gary Voss, Income For Life member started out like most investors, basically drinking from a fire hose of information. “I was taking in lots of different information for lots of sources regarding investing. At times it was hard to stay focused or get anything done. When I joined Income for Life Matt and his team helped me focus on income producing activities and actions when investing.”

Always be on the hunt for new information but remember information with out action does not amount to money in the bank. Find knowledgeable investors with proven track records. Look for a proven system as well as experienced mentors to “coach” you though the process. 

   

Investing Myth 2: The Best Investments Require Knowledge Most People Don’t Have

Truth: Your Best Investments Will Always Be in Areas You Can or Already Do Understand

Investing in something you don’t understand isn’t investing—it’s speculation. In fact, the reason so many people use real estate investing as an investment vehicle is precisely because it is something they have a basic understanding of. Real estate provides investors with a tangible asset. Nobody can take your investment property from you on a whim. But stocks can plummet to zero.

Seek the specialized knowledge you may lack. Keep it simple and build your knowledge base as you progress. Again, look for mentors or partners who can cut down on the learning curve.

Investing Myth 3: Investing is Risky—I’ll Lose My Money

Truth: Investing, by Definition, Is Not Risky

Investors don’t ignore risk; we mitigate risk by following sound principles and models. This is what Income for Life is all about, mitigating risk by the use and implementation of proven systems.

We have had many investors who have joined out program because we help minimize their risk. Many members have had strong interest to invest but were unable to take the first step out of fear. With us by their side they were able to move forward and enjoy success with their investments. 

Investing is about having sound criteria, solid proven models, the patience to find the right opportunity, and a willingness to take action. You can minimize risk while maximizing return.

Investing Myth 4: Successful Investors Are Able to Time the Market

Truth: In Successful Investing, the Timing Finds You

Timing is one of the most misunderstood concepts in investing. Many inexperienced people think investors are poised on the sidelines waiting for opportunities.

The truth is that timing is about being active. The best deals come from the best opportunities, and the best opportunities go fast. You must be constantly searching for opportunities that meet your criteria. When you find one, you must be prepared to act. Quickly.

The reality is if you are waiting on the sideline for the right opportunity to fall in you lap do you know here you are? You are NOT in the game! If you are not in the game the best deals will pass you by. Investing is all about racking up base hits on a consistent basis. When you do that every day the home runs or even the grand slam deals will find you.

Investing Myth 5: All the Good Investments Are Taken

Truth: Every Market, in Every Time, Has Its Share of Good Investments

Two market forces create opportunities: economic and personal. They are always present and influencing the market.

Economic forces include job growth, interest rates, population shifts and area revitalization. Personal forces include opportunities from positive circumstances, such as relocation, marriage and family growth. Others arise from negative conditions such as divorce, debt and foreclosures.

Right now, at least here in

St. Louis

, the problem is not that all the best deals are take. In fact, it is quite the opposite. There are more killer deals than there are investors to buy them.  My advices in this case, sharpen your pencil and seek out the best opportunities that fit your investment goals. Do not buy a property just because it is a “good deal”.

Almost all investors face the same fear or doubts when starting out investing in Real Estate. The difference between the ones who enjoy success and those that wait on the sideline is their ability to overcome the fear of the unknown in real estate investing. I hope these common “mythunderstandings” can clear the path between you and true financial wealth.

To your success,

Matt Shreves

President,

St. Louis

Income for Life

www.QuitWorkSomeday.com 

Time of the Season

I don't know how many of you are going to remember this song by The Zombies, Time Of The Season but it has shuffled its way into my life quite a bit lately.  Every time I hear this song it reminds me to be thankful for the current market conditions.  Times like these are to be seized.  It truly is the time of the season for real estate investors. 

Are you a real estate investor?  Or are you just 'really interested in real estate'?  This is the question I ask new investors when they come into my office. 

Why? 

Because real real estate investors make things happen. They don't hesitate. They don't kick tires. They assess deals quickly and they take action. Massive action.

Learn something about yourself by stepping up and being willing to take the swing.  There hasn't been a better time in very a long time.

Don't know where to get started?  Well this is a pretty common problem.  "I just didn't know where to start.  I have been looking for something like this for a long time", said one beginning investor.  I
gave him the same advice that was given to me sometime ago.  Seek out and secure a mentor.  Someone with a proven track record of success. Someone that will advise and steer you as needed.  Do not delay in implementing this strategy in every part of your life.  If there is
something that you want to achieve, hire a mentor with experience in the desired field and you will cut your timeline to success in half.

It is a proven model.

If you call yourself a real estate investor and you are not actively buying property right now seek out a Mentor.  You must take action. It is the Time Of The Season.

Travis M Dyer
Income For Life

Are you stuck in a rut?

Do you ever find yourself struggling to complete a task you know must get done but hate doing so? Have you every thought you could be accomplishing so much more in your Real Estate Investing business but seem to have hit a ceiling?

We’ll your not the only one! Like many others I too have continually bumped my head against this ceiling and struggle at certain tasks for no particular reason.  Over the years I have searched for every remedy possible usually looking how to improve myself for the solution.

Not sure if you’ve delved into the self improvement section at your local book store but let me tell you its massive! Not only that but the one common theme throughout these books is how to fix or improve upon your weaknesses.  Obviously, this makes perfect sense, or does it?

Recently I read a book called Strengths Finder 2.0 by Tom Rath and my outlook on self improvement has completely changed. I used to believe I had to turn my weaknesses into my strengths. This I have found by trial and error is complete folly. Have I been able through hard work and dedication to improve upon those weaknesses, Yes! Are they now my strengths and do I enjoy doing them, absolutely not!

So what is the difference with this book? Simple, the whole goals is to identify your strengths and improve upon those. The simple fact is we are a whole lot happier and productive when we spend our time doing the things were are good at and those we enjoy! This does not mean you can ignore those things you are not good at but if you can properly identify your strengths you can outsource your weaknesses!

So if your head hurts like mine from repeated bumps against an all to low ceiling, you need to jump over to Amazon.com and get Strengths Finder 2.0 by Tom Rath.

Bill Ross

Income For Life Phoenix

www.TheRealEstatePilot.com

The Last Lecture

A month or so ago, my wife's father called to tell us to watch the video of "The Last Lecture." The Last Lecture is a presentation given by Randy Pausch. He is a 47 year old college professor at Carnegie Mellon in Pennsylvania. He is also dying of pancreatic cancer. Randy's presentation is very thought provoking.

Randy just recently released his new book titled, "The Last Lecture."

I encourage you to watch his lecture and think about your life. We all get down from time to time because of problems or challenges. When we step back to see the big picture, we usually realize how small our problems are. Imagine being diagnosed with a terminal illness. What would you do? Would your priorities change?

In Randy's presentation, see how he has chosen to handle his terminal illness. I have included Randy's Last Lecture for you below. If you're receiving this blog post via email, you may have to visit the blog to watch the video. Here it is:

Rob Minton

The ants, the ants, the ants...

This is a picture of an ant hill from my drive way. My kids must have dropped some food or something because we had several small ant hills pop up one night. As my kids were playing outside, I watched the ants for a few minutes. These little buggers were working like crazy. They were all in motion doing something. I'm not sure what they were doing, but they were definitely hustling. It was amazing to watch.

Have you ever watched ants at work?

I know this activity is at the top of your "To Do" list, right? It sounds about as fun as building your own ant farm! Before we write off the ants, I think there might be something to learn from them.

Later that night after telling my kids to put their toys away for the 8th time, I got the broom out and swept away all of the ant hills. Basically, I devastated their little ant village. I wonder if my broom storm was reported on their nightly ant news?

I finally got my kids in for the night and was happy to have fixed our ant problem. The next morning when I opened my garage, I noticed all of the ant hills were back. These ants worked all night long and rebuilt what I had taken away. This happened all within 12 hours.

Maybe ants know how to handle adversity. They just get to work rebuilding what was lost.

• They don't sit around complaining to each other.
• They don't blame all of the other ants for their problems.
• They don't ask their ant government to bail them out.
• And finally, they don't give up on life.

They simply get back to work. The next day, I got my broom out again. I swept away the ant hills for second time. I also grabbed my ant spray and sprayed all around the ant hill village. Guess what happened?

They built another ant hill. Talk about persistence...

We all face adversity in our lives. What we do when adversity hits is extremely important for success in our lives. We should remember the ant strategy and copy it for ourselves. Simply get to work rebuilding and recreate what was lost.

By the way, have you ever seen an ant relax? I haven't. I wonder if this is something we can learn from, too?

Rob Minton

"You Are Definitely On Drugs!"

Have you ever known anyone with a serious drug problem?  Or seen a bad addiction on a movie?

Well, have noticed that as soon as the "druggie" runs out of their supply they'll do almost anything to get more.  They'll do anything to get another "hit".  They will do what ever it is that they know to get more.

Well, last week I was reading Robert Kiyosaki's book, The Cashflow Quadrant, for a second time and I stumbled across this idea that came to life for me last week.

Ready for it?

Are you sure?

Here it is...

You are on drugs too.

Yeah, and you know what your drug is?

Come on, guess!

Your drug is MONEY.  You are addicted to it. 

Yeah, it's true.  Money is your drug.

Think about it.  When you need more of it what do you do?

You'll do what ever it is that you know to get more.

Hmmm...read that last sentence again, sound familiar (if it doesn't...then read about the druggie mentioned earlier!).

If you make your money by trading your time for money then you'll ask for more time at your place of employment.

If you make your money by getting commission checks then you you'll work for more commission.

If you are self-employed you'll work longer and harder for more revenue.

If you make your money by having your assets produce extra cash flow then you'll find a way to get more assets or extract more from what you have.

So there you have it.

Why do what you do?  Because that's what you know.  Over the years you've slowly and unknowingly taught yourself to make money in a specific way.  And when you need more money you do more of what you've always done.

If you've been making money by going to work then you try to work more for more money.

If you know how to make money by extracting it from assets then that's what you do.

The difference is in what you know.  There's nothing wrong with how you make money but some ways are like hauling buckets back and forth from the "money well" every day and other ways are like building pipelines that produce money at will. 

How do you change the way you make money?  Education first.  But don't over do it.  Six months of reading about something should be more than enough.  Then you start down the new path with action.  Making money in new ways is definitely a process.

It doesn't happen overnight like you may want to.  You'll make mistakes, there will be pain and frustration but if you stick with it before you know it you'll be feeding your addiction much easier.  And something strange happens. 

Once you know how to make money in multiple ways you don't worry about it any more.  You've put yourself in the driver seat and the addiction becomes much less strong.

Last week two different friends were talking about making money. 

One has worked for a company his whole life and never bothered learning about anything new.  He's almost proud that he hasn't read a book since college.  So he's going off to make more money by working harder.

Another friend is an investor in single family homes.  He needs some money to buy a new car.  He also works for a company but a few years ago went through the process of learning how to invest in real estate. 

So he's decided to extract some money from a property by selling an option on it to a tenant.  That way he still owns the asset, didn't trade time for dollars, and now has the money for his new car. 

Neat huh?

How do you feed your addiction?

Tom Karadza
Income For Life Toronto
www.TheRealEstateRenegades.com

No more stories on the price of gas! We get it - the price of gas is high.

On Sunday, we had some friends over for a cookout. At some point during the cookout, we began to talk about the price of gas. We actually started to joke about it. Remember Y2K? Or how about the West Nile Virus? Or how about the scary weather? Now all we hear about is the price of gas...

Why does the media try to scare us every single day? Because it's great for ratings. The media doesn't care about the price of gas. They only care about getting you to watch their newscast or read their newspaper. They need the advertising revenue. More viewers means more advertising revenue. Fear sells.

The same goes with the real estate market. Oh, the market is terrible. Foreclosures have spiked in the States. Yadda, yadda, yadda...

Within all of this doom and gloom, I collect a series of checks and a $20 bill from one of my rental homes. Here they are:

These checks were made out to one of my LLC entities.They total $2,230. Add in the $20 bill and you can see that I collected $2,250. My profit after making my payment is around $500. I sure do love my little houses.

Want to know why?

Because people always need a place to live. Gas prices can hit $10 a gallon and people might begin to cut back on some of their spending. They might stop eating out. They might stop going to the mall. They might even cancel a vacation, but they can't stop living. They need a place to sleep at night. It's virtually impossible for anyone to eliminate a place to sleep. The point I'm trying to make is that a monthly rent payment is NOT discretionary. Each month, I receive check after check on my properties irregardless of what's happening in the economy.

• This hasn't changed because of the price of gas.
• This hasn't changed because of the soaring foreclosure rate in the States
• This hasn't changed because of drop in real estate values
• This hasn't changed because of the sub-prime mortgage crises

The point being that I still collect checks each and every month. My tenants go to work each day to send me a check. Why? Because they need a place to sleep. I'm getting wealthier month after month.

Are you?

Now, if your feeling the pinch from the high cost of gas, what are you doing about it? Are you working to create extra income streams? Are people going to work today to send you a check? 

POP QUIZ:

How many tanks of gas can I buy with the profit I collected above? Around 7 or 8. Who is paying for my gasoline? Me or someone else? You got it! Someone else - my tenants.

How would you like to have 7 or 8 free tanks of gas each month? Would the price of gas be such a big deal to you? Probably not! The problem is that media keeps scaring you to death. Stop watching the news. Stop reading the newspaper. You'll be happier. I promise. Take the time saved and start to learn how to create income streams. Start investing in real estate. Start collecting monthly rent checks. Be proactive, not reactive.

Instead of conserving gasoline and living within your budget, create more income.

Rob Minton

P.S. Yesterday, the stock market sunk with sharp losses. Did this impact my rent checks in anyway? Nope.