Nov 25

My husband and I were eating breakfast at the Good Egg the other morning and couldn’t help but over hear a fellow talking to his elderly parents about their home. It was fairly obvious that his father had a hard time hearing and the louder he talked the more I was tuning in to what he was saying.

“Dad, the real estate market in Arizona is going crazy right now!” He said.

“Huh?” His father grunted

“THE HOMES ARE SELLING IN A MATTER OF HOURS.” He said louder.

“HOURS?” His father yelled almost in half a question, half disbelief.

“Yes,” He continued, “What you need to do is look for the signs in your neighborhood with the same real estate agent’s name on them. These agents are the neighborhood specialists. They sell all the homes in the neighborhood and they know what is going on in that particular neighborhood. That is what you should do. That is how you find the best agents.”

I nearly choked on my toast! I sort of heavy sighed and my ears were getting hot by this time. It was all I could do to compose myself. I continued listening, all the time in disagreement with much of what the well intentioned son said to his parents.

My husband leaned over and said, “Yeah right. Just because someone gets a bunch of listings in a neighborhood makes them a specialist. That poor guy is giving his parents the worst advice I have ever heard!”

“I know but it is probably what a lot of people think.” I said.

“I think it is a hit and miss method of finding the best agent. Those attorneys that are ambulance chasers have their signs all over the TV and on bus benches, just because they have a sign out doesn’t mean they are a specialist! Those guys are snakesjust like some real estate agents! You know, you have seen it. One crummy agent gets a listing and the next thing you know bamthey are listing homes all over the neighborhood. Doesn’t mean they are gooda lot of them hang a sign and walk away. Anyone can call themselves a neighborhood specialist. What he is telling his father is ridiculous!” He sneered at me.

I couldn’t believe this had hit a nerve with my quiet and well mannered husband. He was mad!

“Why are you so upset by this?” I asked.

“Its not a good way to select a professional. People should spend more time finding out what the agent does after the sale. I see you making deals happen. A lot of them would never close if you weren’t on the phone naggin lenders, title companies and other agents!” He nearly shouted at me.

“Nag? I don’t nag!” I said as I smiled at him.

“Well, you know what I mean.” He said in a calmer voice.

He continued. “With the market the way it is, you know there are more agents going through real estate school now than ever before. Think about it. What if the agent can’t negotiate strongly or they don’t get the paperwork in and follow timelines? Not everyone is as obsessive / compulsive as you are! A lot of them are discount agents because they have nothing else to offer a client. The homeowner wants to save money and they think all agents are the same so they go with the discount agents. You know some of those agents are either not the sharpest tool in the shed or they are simply greedy and list a bunch of homes and have no marketing skills at all. Some of them lie and are crummy at life, how could they specialize in anything?” He snorted in disgust.

“You are right, you don’t have to convince me.” I agreed. “But you know there are a lot of professionals out there too. I work with them every day. Our office is filled with them.” I repeated. “Filled with them.”

“Yeah, yeah, but your office gives extensive training and you fully train the agents you bring in under your wing. I don’t see a lot of brokerages doing that. Most of them show you the phone and say good luck. That is why so many people fail in the first 6 months.” He said. “You know most companies aren’t like that at all. Most of the agents I have seen don’t have a clue.”

“I know, I know. You are right. There ARE a lot of unprofessional agents that really don’t care how they treat their clients, they are just in it to collect a check. More people should shop around and find the right agent to sell their home. I agree with you so lighten up.” I said to him.

Of course I slipped over discreetly and passed this fellow and his parents my business card and introduced myself.

His mother quickly asked, “What neighborhoods do you work?”

I just smiled and said, “A lot of different neighborhoods, all in the East Valley.”

“Oh.” She responded coolly.

After what her son had just told her, suspected they wouldn’t call. The unfortunate thing is they have about a 50/50 chance of getting someone skillful. And in my opinion, skill is only a small piece of the pie.
I think it really takes five key ingredients to find a truly successful person in any industry, especially real estate because it is most people’s largest asset and they are paying you a lot of money to use great care and skill in selling their home.

Skill is only the first key ingredient.

Skill is completing all the necessary documents in a timely manner and providing the sellers with an education on the process of selling their home. Also, skill is very important in pricing a home correctly and marketing is huge. Getting maximum exposure is honestly what most of it is about. Are you wondering what the other four are?

Number two is character. Character is a person’s internal compass that guides their decisions. It is a guide to treating people honestly, respectfully and fairly.

Number three is philosophy. Philosophy is how deeply they ponder character, situations and people. Philosophy is sort of the purpose behind the character. How they see life in general I guess. My favorite philosophy is a simple one that most of us learned as a child. It is called the ant philosophy and defines the character qualities of work ethic, purpose and diligence.

Number four would be attitude. Attitude is how they respond to people and situations. When something goes wrong, are they negative or do they have an attitude of getting things done without anger, procrastination, and pettiness. Do they know how to motivate others to work with them or do they tick people off wherever they go?

Lastly, number five is goals. Goals are important because you have to have a plan in selling your home. How quickly do you need to sell? How much will you make on the sell of your home, what fees are you looking at? Without a goal or target, how do you know where to aim? Goals stem from both needs and wants. Strong goals push you toward results.

To make the picture a little clearer in your mind, let me ask you, have you ever worked with someone that had a high level of skill, character, goals, and philosophy about their job, yet displayed a crummy, negative attitude? Or perhaps their attitude was good, yet they just didn’t have any direction or goals in life and you suspected they would never get very far in their career, let alone their life. Or worse still is maybe they had a great attitude, strong skills, strong philosophies, and they achieved their goals but they stole, lied and cheated to get what they wanted.

When selecting an agent to help you with buying or selling a home, it is in your best interest to find someone that works on all five key ingredients that will make them a success, isn’t it? Of course it is! When they are truly a success in every sense of the definition, you will enjoy success too, right?

Michelle Shelton lives in Gilbert, Arizona on horse property with her husband Paul and their five children. Michelle is an author, educator, recruiter and licensed Arizona REALTOR

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Nov 08

We all are thinking about it and some of us are actually taking action and getting their hands on real estate investment properties. The longer the NY Stock Exchanges doesn’t produce desirable returns the more people are starting with real estate investments.

For most of us the obvious choice of properties are single family homes. Although you can invest in real estate without owning a home, most people follow the experience they made while purchasing their own home. This is familiar ground and the learning curve for doing a real estate deal of this type is pretty slim.

Of course there’s a drawback with this approach. The competition is fierce and there are markets where investors are artificially driving up the cost of the properties while completely discouraging first time home buyers. If this is the case, the burst of the real estate bubble is just a matter of time.

How do you avoid these situations and still successfully invest in real estate? How do you get ahead of the competition and be prepared for bad times in real estate investments as well? The only answer I have is commercial real estate.

Why commercial real estate you might ask? Commercial real estate is a solid investment in good and bad times of the local real estate market. The commercial real estate I’m referring to are multi unit apartment buildings.

Yes you will become a landlord and No you don’t have to do the work by yourself. You are the owner and not the manager of the apartment building. The cost of owning and managing the building is part of your expenses and will be covered by the rent income.

Apartment buildings are considered commercial real estate if there are 5 or more units. To make the numbers work you should consider to either own multiple small apartment buildings or you should opt for bigger buildings. This will keep the expense to income ratio at a positive cash flow. Owning rental properties is all about positive cash flow.

With investing in single family homes it is easy to achieve positive cash flow. Even if your rent income doesn’t cover your expenses 100%, the appreciation of the house will contribute to the positive cash flow. With commercial real estate the rules are different.

While single family homes are appraised by the value of recent sales of similar homes in your neighborhood, commercial real estate doesn’t care about the value appreciation of other buildings. The value of the property is solely based on the rent income. To increase the value of a commercial real estate you need to find a way to increase the rent income. The formula on how this is calculated would be too much for this short article. I listed a few very helpful books where you can find all the details.

What’s another advantage to invest in commercial real estate? Commercial real estate financing is completely different than financing a single family home. While financing a single family home you are at the mercy of lenders who want to make sure that you are in the position to pay for the house with your personal income. Commercial real estate financing is based in the properties ability to produce positive cash flow and to cover the financing cost.

After reading all these information about commercial real estate you want to go out there and dive into the deals. Not so fast. First, you need to learn as much about real estate as possible. In commercial real estate you’re dealing with professionals. If you come across too much as a newbie you will waste these guys’s time and your commercial real estate career ended before it actually started. Second, no commercial real estate lender will lend you any money if you can’t show at least a little bit of real estate investment experience.

What’s the solution to this? Go out there and do one or two single family home deals yourself. It doesn’t matter if you make huge profits to start off with. Most newbie investors are loosing money on their first deal anyway. If you can manage to show positive cash flow with your single family home deals you are ahead of the pack.

My advice, buy a small single family home in a decent neighborhood and rent it immediately. This will keep your out of the pocket expenses at a minimum and you will have rent income to cover for your monthly expenses. Bonus, you gain experience as an investor and as a landlord.

Here’s another observation I made during my real estate investment career. Most people like to analyze, learn, discuss and analyze some more. They never actually got to do a real estate deal. They love to talk about real estate investments, but never did it themselves.

My approach to real estate investment was simple.

- I bought some books about real estate investment.

- I read every single one of them.

- I put together a simple plan on how I want to get started.

- I started looking for properties.

- I bought my first investment property 30 days after I started reading my first book.

- I made positive cash flow with all of my properties so far.

What is my point? You have to go out there and practice what you’ve learned. The only valid credential in the real estate business is practical experience. Having a couple of deals under your belt, you can go out there and start looking at commercial real estate and even impress seasoned investors with your knowledge. Because you made this experience by yourself and you know what you’re talking about.

Book reference for commercial real estate investments:

Gary W. Eldred, PhD: “Make Money with Small Income Properties”

Jack Cummings: “Real Estate Financing and Investment Manual”

You will find these books and many more on my real estate investment website at http://www.suncoastrenttoown.com/author_directory.htm

Sincerely,
Peter Dobler

Peter Dobler is a 20+ year veteran in the IT business. He is an active Real Estate Investor and a successful Internet business owner.
Learn more about real estate investments at http://www.doblerproperties.com or send a blank email to mailto:suncoastrenttoown@getresponse.com

[tags]real estate investment, commercial real estate, rental income, real estate[/tags]

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