|Become A Failure And Succeed In Real Estate!
Become a failure and SUCCEED past your wildest dreams in real estate investing.
Obviously this is not the bit of advisement that you would be expecting but once you get this
concept, success will be laid before you. You want to fail in the right ways limiting financial
and legal liabilities.
To give you a better idea of exactly what I am talking about you simply must know
where I'm coming from and possibly a bit of my personal story will help make sense. Why? That
is because over my 10 year real estate career my first five years were anything significant and
needless to say "fun".
I found myself with 25 properties after the first five years. Not bad right? WRONG!!!
I had 25 properties barely cashflowing AND I also had my corporate job still to keep everything
afloat. Definitely not what I had expected.
It all sounds so nice, right?.....become a landlord with no money down deals and you
can be taking vacations on the beach six weeks a year while tenants pay you to fire your boss and
live the life you've always wanted. Am I the only one here that bought into that? I didn't think
so but there is always a silver lining.
So after my first five years of real estate investing I had graduated with an MBA
from the school of "hard knocks". The only good side from those experiences was a sense
of, "well, I'll never do it that way again". Believe me its not the easy and profitable
way to learn in real estate.
Still determined and passionate about real estate beyond description I literally wrote
myself a note and which is the focus of principles I sorely want you to learn and burn
into your short & long-term memory. This is my motto that I still live by on a daily basis
"What is the absolute worst-case scenario that can happen on this deal...and if
it does, am I financially and legally prepared for the consequences?"
There is NEVER a no-risk scenario when it comes to real estate investing. Let me
quantify that before anyone starts talking about contingency clauses and the such. You will
always be risking at the very minimum your time that has value and not to mention even some
marketing dollars to find the deals.
Now that doesn't sound as bad now does it. This in summary is what I mean: limit
financial and liability issues as much as possible in real estate investing.
For example; if I know ALL there is about how to structure contracts to wholesale flip
for quick cash to other investors and limiting any possible negative liability consequences,
then what is my risk? Possibly only "risk" would be a couple hundred bucks mailing to
absentee owners. Even if not one deal is made, then that is a consequence I can live with.
Another example; if I finance this rehab project through a hard-money lender do I have
enough reserves to make the interest only payments? What happens if I come into some unexpected
repairs that are outside the LTV of what the lender will allow for repairs? If the house is still
on the market after six months and hasn't sold, what will I be prepared to do? A little bit more
serious risk that I need to look at in great consideration.
There is this guy "Murphy" that shows up a lot of times in real estate deals.
You know, "Murphy's Law"! It means whatever can happen sometimes does and it is most of
the time not to your advantage. Just be prepared and it would be prudent to have some vision in
working through all possible scenarios.
Recently I closed on a property making $7,000 as a quick flip. This property I secured
through my probate marketing simply gaining an option on the property with no legal liability to
perform if I didn't buy it or get someone else to buy it.
I knew there was a chunk of equity in the property but it was heading straight to
foreclosure. Not enough equity for investor offer, but GREAT deal for a retail buyer. So after
tieing up the property under contract I then advertised "handy-man" special.
Then I had §100 in advertising invested. I can live with that risk if I don't make any
profit on the property.
From there I found a buyer the next day with an 800 Beacon score! Never had that happen
and probably won't again. Went through the loan process controlling the whole approach. Loan went
through to underwriting and termite/inspection report revelealed some moisture damage as required
by my state to report. Loan wasn't going to close until repairs done even though was sold
The house then needed $725 worth of repairs in order for the loan to close. I paid
the repair bill and now I've got $825 in the situation. If the loan STILL doesn't close and I
lose my $825, I still can live with that risk. Funny things and not in a "ha-ha"
kind of way can happen at underwriting so nothing is still guaranteed.
After all the dust settled, I realized a $7,000 net profit after the repairs and
advertising expenses were paid. I had a total of $825 at risk in the entire situation and if the
deal never closed then that is an amount I could live with as a loss----definitely
NOT be happy with but I wouldn't lose sleep over it at night.
If you're concentrating on deals and real estate holdings that literally keep you
awake at night when you should be sleeping.... start asking yourself how you can limit those risks
to a bare minimum.
This whole business is about QUALITY of deals and not QUANTITY. Continue to invest in
the education of yourself and limiting your worst-case scenario downsides, then build up to a
quantity of quality deals! That is called putting your real estate business in overdrive for true
financial security that corporate America just can't provide for you like real estate can and
does for investors on a daily basis.
To your success and good hunting as luck has absolutely NOTHING to do with it!
Take a quick check of your marketing program and tune it up if needed so you too can,
"Find All The Motivated Sellers You
Scott Rister is an author and "real world" investor just like yourself.
Scott started investing in real estate over seven years ago for the sole reason so many do which
is to supplement income and eventually replace the corporate job. After learning first hand what
"down-sizing" in the corporate world means, Scott focused more intently on shifting from
emphasis from buying techniques to finding truly motivated sellers. In less than a year Scott has been
involved with over 60 real estate transactions that ended up with a check with his name on it. You can
learn more about his program at
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