During last night’s CashFlowDepot Coaching Call, 5 experienced investors talked about their best and worst deals and the lessons learned from each.
No matter how successful of a real estate investor you are, you will most likely have at least one deal that does not work out or one that is not profitable. You can minimize the risks by (1) learning as much as you can about creative real estate investing, and (2) using options or leases to control properties vs actually buying them.
You need to realize that real estate markets change constantly so you will need to learn how to change with them. You should have a good exit strategy in place. But also have a Plan “B” just in case the market changes quickly and your Plan “A” does not work out. A good example from the call last night was Simone Stephens discussing how she bought some high end houses to rehab then sell. But the housing crash or 2007-2008 made it impossible to sell so she rented out the houses as resort rentals instead.
Markets sometimes change to make it possible to profit even more. Sometimes real estate markets are so HOT that it makes sense to use a Highest Bidder Sale to sell properties vs. just going with the first person to make an offer. That’s what Patti McGregor does in Houston Texas and she makes a lot more money because she uses the Highest Bidder Sale method to sell houses.
Several of the other speakers talked about the dangers of working with a partner. Prentiss Yates discussed how most people spend no time vetting a real estate partner. John Alexander’s advice is don’t be the deep pockets in a partnership. The consensus was that most partnerships do not work out. But if you do take on a partner for your business make sure that everyone has “skin in the game” equally. That is often the only way you will get the results you are looking for. Have clearly defined goals, time lines, and exit strategies.
During the Q & A someone asked, “What’s the advantage in getting involved in real estate investing if you know there is a possibility that you will have a “bad” deal? “
The answers were:
1. Leverage! With creative real estate investing it is possible to use very little of your own money to control a property which will product both cash flow and CASH. With as little as $10 you can get an Option on a property then sell it to make $5,000 or more in just a few weeks. You can use a Master Lease to control the cash flow on a property you don’t even own. Several of our guests use a master lease to control 90 – 100 houses which each product $150 – $200 per month in cash flow.
2. Financial Freedom! Starting with as little as $500, and with no bank financing, in 3-5 years you can produce enough cash flow and cash to completely support your lifestyle WITHOUT working at a job. No college degree is necessary. You can accomplish true financial freedom and security with real estate investing.
As a real estate entrepreneur you might hit a bump in the road once in a while. The experienced investors on the call last night all have. But, with the right training you will have many more good deals than bad.
The sooner you get started down the part to financial freedom, the sooner you will get to the finish line.
Best of Success… and Freedom,
Jackie
P.S. The complete 2 hour replay of the War Stories Coaching Call is available in the Member's Coaching Call section at www.CashFlowDepot.com
