Buying real estate with little or none of your own money is as simple as “Can You Spot An Opportunity?”  That’s it, plain and simple so here is some thing to think about today.

I read an article yesterday and it reminded me of some the things you need to think about as your growing, building or starting your investing business.

• Forget about flipping and rent

Unless you’re buying real estate at basement prices or your selling on terms, you should plan on keeping it as a rental property.

• The purchase price is just the beginning

Don’t forget about the closing cost, fix up costs, holding cost, cost over runs etc.  If you don’t factor in all the other cost, your going to have issues

• You’d better have cash

One of the things I have been preaching is that fact that investment money is hard to get.  If you want to survive and thrive in this market, plan on being a master at creating your own loans.

• Know your market

Know the trends of your market and be careful of a Micro and Mini Market.  These are smaller markets inside a bigger market.  If you’ve seen houses on one block for 200K and then houses two blocks away at 60K, these are Micro and Mini Markets and they can burn you if your not aware of whats going on inside your market.

• Know your tenants

The current economy is producing tough economic situations.  Don’t think that you have to put the first Tom, Dick or Harry into your place, qualify them and make sure your happy with what you see.

• Investing brings responsibility as well as rewards

At the end of the day, real estate investing is a business.  If you’ll treat it like one and make sound business decisions in this market.  You will have a tremendous increase in personal wealth in the long run.

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My journey back to my real estate roots has reminded me that “Real Estate Paper” is the key to succeeding in Real Estate and here is the proof.

I want to show you a letter from GMAC

$75,000 Reduced To $6,000

The owner took out a $75,000 2nd mortgage on the property.  I know how to manipulate the financing and because I understand the “paper principles” I was able to get the debt settled for .08 cents on the dollar.  The best part is that GMAC will accept the $6,000 as “complete satisfaction.” which made my seller extremely happy.

In the comments below, guess what it cost me to control this deal?

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Yesterday I mention how investors have been pitched and sold on the concept of the “overpriced analysis software that removes creativity” Some of the big name Guru’s have been selling these systems for years. I admit to being one of those who stood in front of crowds and said “this is what you need to take your business to the next level.”

I was wrong.

Those systems have their good points but it’s a system you never own. You pay a hefty upfront fee and a monthly fee and “you own it as long as you pay the monthly fee.”

The days of “pushing a button and getting rich” are over. You’re going to have to look at your deal from a purchase perspective and two or three selling perspectives in order to survive. Calculating the transaction downside went out the window when the market exploded and every Tom, Dick and Harry decided they wanted to be a flipper. Today watching your downside is the most critical piece to your investment survival.

The instrument needed to calculate your downside is a $35.00 calculator. I have used the HP 10B, 10BII, 12C, 17B and the 19B. I prefer the 19B but the investment is north of $150.00.

If you really want to learn how to find the fun in real estate investing and if you want to learn the correlation between real estate and real estate paper; your going to need a calculator to do it. Not some fancy software but a calculator; the HP 10BII works just fine.

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The summer of 2009 has been the hardest in my business career both inside the real estate world and out.

My real estate business has found some incredible opportunities. I have been able to get some fantastic discounts because of the current economy. My problem is the same problem you and ever other investor are having; finding affordable long-term money. I have been successful in arranging short term financing but making my investors whole and cashing them out with long term financing has been a tremendous challenge.

If I had to describe my emotion they have ranged from pissed off to angry, frustrated to rage. I even said those words I would never say; “my real estate business isn’t fun anymore.”

I sat down about a week ago and decided I would review some of my past deals. I went all the way back to my beginning and started reading my notes on properties I had sold.

Here’s what I found; my deals were easier, they were more fun and most of them never involved a bank. I also saw how I took my short-term investors and made them long term funding sources.  My definition of a long-term funding source is loan lengths of no less than 36 months.

Because long term financing was easy to get and banks had programs that fit my long-term solutions, I failed to remember the one thing that created the core of my business in the beginning and that is this.

“If your in Real Estate your in Real Estate Paper and if your in Real Estate Paper your in Real estate.”

Over the years I have learned how to manipulate the financing in a real estate deal.  This manipulation has produced easier deals, better relationships with my investors, a bigger and broader buyers list and more control.  No more fancy overpriced analysis software that removes creativity

The format of this blog going forward will be about

The Correlation Between Real Estate and Real Estate Paper.

Stay tuned

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