MYTH #5 - You Have To Be a Seasoned Negotiator
This simply isn't true. If you have to "hard-sell" a deal, then it probably isn't a deal. When you walk into a meeting or a boardroom full of investors - your position of strength is the deal itself, not your ability to sweet talk or negotiate it.
Once you have done your homework on a property, supplied a list of comparables, and furnished a solid set of financials to show what a phenomenal deal this is, you won't have to do any convincing; the numbers will speak for themselves.
Also keep in mind that what you would probably consider a negotiation meeting, is simply just a meeting to present the deal. Remember, you've already done the homework. You have the numbers all figured out, and you are confident what the value of the property is and why it's worth what it is.
Now, there may be times, when your deal isn't someone else's deal. But that's okay. There are many other individuals for whom the deal will work. If you have to beg someone to see your deal, then you probably don't want them as an investor. Investors who can see a deal, will want to participate. There is no real trick to this other than applying knowledge and being diligent in research. No matter what your personality or background, you have the ability to put together a great deal (this is where I can help), and you can attract the investors that you need.
If you are the type of person looking to find that great deal (and possibly find investors), then please feel free to contact me directly (email@example.com). Let's talk and see what we can do to help you on the road to financial independence.
MYTH #4 - It's Who you know, not what you know
There is a saying, we've all heard from time to time. It goes something like this, "It's not about what you know, it's about who you know." That may be true in business, but its not true in investing. You don't need to know anyone important to be connected with real estate investing - in order to get started. In investing, it's all about what you know, not who you know. Once you have found a good deal, you will be able to attract investors. But in order to find a good deal, you need to know how to spot one. That's the first step. Let me explain.
When looking to purchase property, perhaps you may be looking at markets - you've never visited before (Belize may be one of those markets). Spend some time reading about the various markets you want to invest in. Is their economy on the upswing? Do they have affordable properties to invest in? Can good deals be found, which offer potential profit margins? From the comfort of your own home/office, you can read about these various markets. Once you've done that, you may feel fairly certain you've found a market you want to invest in. Now you need to start looking for that awesome deal.
The first person to contact in a market area, is your local real estate professional. One that is skilled in that market area and knows the ins and outs of investing. Through this person, you will be able to obtain additional names of local experts, as well as more up to date financial information for the properties you are interested in.
Before many of my clients come to Belize, we typically have been in contact with each for months through emails. We've had numerous telephone conversations, swapping information back and forth. I have been able to do alot of the leg work and research for my clients, prior to their ever stepping off a plane. If you would like know more information about investing in Belize, please feel free to contact me at: firstname.lastname@example.org
MYTH #3 - The Perfect Touch
What is the perfect touch? It seems some people have it and others don't. The perfect touch, is those people who seem or appear to succeed at everything they put their hand to.
Those who appear to have the perfect touch, are individuals who have educated themselves and know the tricks of the trade when it comes to real estate investing. They have spent hours studying various markets, and know how to spot a good deal when they see one. They also know what it will take to purchase a solid deal, operate it successfully and profitably.
For many of you, you simply do not have the time to spend hours studying the market. This is where I come in. I can assist you in this process, guide you through the do's and don'ts of investing. Investing requires common sense. Equipped with knowledge and the insider tips, you will be able to use your skills and knowledge to evaluate any deal.
Myth #2 - You Have to Start Small
Many people think that they have to start with a small property and work up to a big property. While this may not be a bad strategy, many people become successful investors by doing just that.
Many people feel that they cannot qualify for a loan when it comes to larger properties. It is actually much harder to purchase a smaller property, that it is a larger property. Let me explain why. A smaller property (like a single-family house or a condominium), is often secured by your personal assets. Because the property is smaller, the banks will often look for liquid cash assets, so it doesn't matter how many real estate assets or properties you own. With larger investment properties, banks often look to the property itself and the revenue it generates as the asset. The lesson here is that larger investment properties, are secured by the asset itself because their values are based on performance, and everyone is primarily looking to the property to pay them back through its operations.
Sound property management is the primary way to increase the value of an investment property. Get a property manager who knows what she's doing, and your asset will grow. Get a property manager who doesn't know what they're doing, and you will ultimately suffer the loss, not the manager.
With larger properties, this allows you the ability to increase property's value through operations. This is a huge advantage that larger properties have over smaller properties. With smaller investments, (like single-family houses, villas, and condominiums), the appreciation of the property is based solely on the appreciation of external forces around you (management, maintenance, landscaping). If you do your homework, the appreciation will generally be steady, but ultimately how much this property will appreciate is out of your control. With smaller investment properties (this fact remains), you are not in control of creating the value for the property, the market is.
With larger investment properties, this is just the opposite. You are in complete control of how well your property performs operationally, and thus how much it will appreciate. With larger properties, you can afford to hire a professional property management company to oversee the operations, whereas with smaller properties you often have to do much of the management yourself.
Whether you are looking to buy a smaller investment property or a larger one, this is where I come in. I can assist you in looking for those great deals, while you oversee the management and operations of your existing portfolio.
MYTH #1 - You Need Alot of Money
This is by far the most common excuse I hear people relate, when it comes to why they can't buy investment property. But it just simply is not true, and let me tell you why.
You don't need a lot of money. What you do need is a good deal. By a good deal, I mean an investment property that has profit potential and is based on solid financials.
With investment property, you may not be able to come up with the entire down payment. This is when you try to find partners, investors like yourself, who are looking to put their money down on a good deal. The concept is simple. You find a great investment property, raise the equity required to purchase it, and give the equity participants on your team - the majority of the ownership, keeping an interest for yourself.
Many people don't like the idea of partnerships. They think partners think to much of themselves, or perhaps I'm leaving too much money on the table. But nothing could be further from the truth. In a partnership investment, you have much more purchasing power than you would if doing this by yourself. That means you can purchase a building of higher quality, one that has more income producing potential.
For example: If you had $20,000.00 and wanted to invest it, you could only purchase a property worth $100,000.00. How many investment properties do you think are out there selling for only $100,000.00? Not many. Secondly, which would you rather have, a $100,000.00 building that cost you $20,000.00 (with your own cash), or a share in a partnership - on an investment worth $3,940,000.00? Which one has the potential to create more of an income stream?
When it came to finding investors, you first need a good deal. With a good deal, you don't have to do alot of selling. Most investors can see the potential of a good deal, when it comes across their desk. With good management and accounting in place, you will have nearly an inexhaustible supply of people who are looking to invest their money in a good deal.
All you need to do, is find the great deal, and the hardest part is done. This is where I come in. I can help you find that great deal.
Due diligence is one of the most essential parts of the purchasing process. This is your one shot to find out every little detail there is to know, about the property you want to buy. It's the process that will ultimately lead to your decision to either move forward with an offer of acquisition, or to pass on to the next deal. Let's briefly discuss the two areas that need to be evaluated before making an offer to purchase. During the due diligence period, there are two aspects of any property that need to be reviewed: (1) the financial records of operations, & (2) the physical property. Both are very important.
FINANCIAL BOOKS & RECORDS
Performing due diligence of the operations requires you to thoroughly review every aspect of the property's books and records. This is where a skilled real estate accountant can help. You will want to verify every aspect of the properties financial records before making a decision to purchase. Additionally, you will be using the information gathered during this due diligence process to start formulating your thoughts as to operations for a budget, by categorizing the property's income and expenses. Reviewing the books and records are a historical review of how your property has performed (good or bad).
Physical due diligence requires you to inspect every aspect of a property. This is probably the time you will want to make a property inspection with your maintenance expert, or pay to have an expert create a report for you. It is wise, that you walk every square inch of your property, so that you can observe both the exterior and interior of the building. You may also need to have your maintenance professional take a look for anything that might have to be repaired or replaced once you take over ownership of the property. This is your time to request that these items be either repaired before a change in ownership takes place, or to be discounted from the purchase price.