the so-called "Monsoon Season"

Greetings from Cedar Crest, NM.  We are officially in the monsoon season…so “they” say.  The title “monsoon” gives the wrong impression…I think. I understand that the “monsoon” season is a time when an area receives most of it’s rain….but I think the word “monsoon” is a little dramatic.    Maybe the “not as dry” season is more appropriate.

Anyway….

Today’s post is a plug for our “FREE” video series on how to invest in commercial real estate.  There is no catch…just valuable information for the coming opportunities. If you ask me…they are already here.

So….

Many of our recent posts have emphasized research. Whether it is spending time at networking groups to research the who’s who of your market, researching comparable properties to maximize your investments, or researching new financial products that could help you acquire your next property.

While there is a plethora of information available both online and in print, it can be hard to tell what data is “good” data. In other words, will you gain anything useful from reading the material? Is the author an expert, or merely someone who was lucky? Does the author really understand the subject matter?

Getting Good Data Quickly
An easy place to start getting reliable, useful data is to sign up to receive our videos. The principals at the Real Wealth Company took the time to carefully craft accurate and informative videos about several useful aspects of commercial real estate investing. The videos are sent via a link along with a short description of the subject matter.

What Kind of Information Do We Cover?
The videos focus on highlighting tricks and tips that “real estate gurus” don’t want you to know, including:
• How to find deals.
• Working with alternative and creative financing.
• Looking at multiple types of properties.
• Using real estate analysis software.
• Evaluating your current investment plans.
• Understanding funding and acquiring it.
• Knowing the value of a business plan.

What’s the catch?
There is no catch. Just like the rest of the information on this website, it’s there to help you. Yes, you can buy this kind of information from different real estate seminars. Or, you can just sign up to receive our videos and get the same or better information, only you don’t have to pay for the fancy marketing campaign.

If you have any questions, please contact the experts at the Real Wealth Company.

Until next time…..rob

the people of Sucre, Bolivia - Horno Ckasa'B

Greetings from Southwest flight 1398 to Phoenix, AZ.

I am on my way to meet with the team from Food for the Hungry Bolivia. I am looking forward to connecting with the Food for the Hungry Boliva staff. I sure miss the community of Horno Ckasa ‘B.

Anyway…..

When I first started investing in real estate, what attracted me most was the ability to build “asset” wealth quickly. I felt as long as I focused on building assets the cash flow would come. Well….like most “newbie” real estate investors, the harsh reality is ….it is not that easy. Especially, when you are leveraging yourself into assets and especially with residential real estate.

I discovered the hard way that leverage is good…but a lot of it can hurt you. I don’t believe in having personal debt (other than a reasonable mortgage). I do believe in having business debt. But business debt can get out of hand went you are leveraging everything you can….but I digress. I will share that thought in another post.

When I entered into commercial real estate, cash flow was a little easier….obviously with “cash flow” properties. It was when I leveraged myself into distressed properties or land where it got tricky.

Today’s post is how “smart” real estate investing can build residual income. From my experience, I have not always been a “smart” investor. To this day, I am paying for mistakes. So I hope as go through this “investing” adventure together,  you can learn from my mistakes.

So…..

Building Residual Income Using Real Estate

There are endless ways to make money in this world, but if you are looking for the kind of investment that can not only help you in building residual income but also freeing yourself from the daily grind then real estate investing may be your “vehicle”. With the recent crash in the equities markets and 401Ks being cut in half many people are looking for more stable, secure and hands off investments. Smart real estate investing fits that bill and can set you free. The key pharse here is “smart investing.”

Every working stiff knows how to collect a paycheck. You dust off the ol’ resume, put on your best interview clothes and start to pucker up. Working for someone else, forty hours a week can make you well off but it will never make you truly wealthy. You’ll never control the means of production so you’ll never be truly rich, or independent for that matter. The tidal wave of layoffs going through the country is reason enough why many people need to work on building residual income.

Residual income is money made from an investment or business that pays you dividends over time for work done up front. Many people create these kinds of businesses through the Internet or through traditional means and turn them over to talented managers. Yet a great way to make some extra money, maybe even enough to quit the daily grind, is to build up real estate investments over time.

Imagine this scenario. You take 10% of your annual income and put it aside. This amount is then used as down payment on a piece of real estate. You rent that real estate out for more than the monthly expenses and keep the profits. The tenant covers your costs and you make extra money. This is one of the best tactics when it comes to building residual income because you will continue to make this money as long as you own the house. You can even pass it down to your children!

While many people think about real estate as a traditional single family home rental, the options are endless. Commercial real estate like office buildings, retail shopping centers and apartment complexes all offer the same help in building residual income yet spread the risk out amongst many tenants.

While at first you may only be looking at an extra couple of hundred dollars a month in residual income if you continue to repeat this process and roll your profits into new properties you will soon have a burgeoning real estate empire. Best yet, the longer you hold the properties the more equity you build up. If you ever need a large infusion of cash to cover a new car, college tuition for junior or your spouse’s new found addiction to slot machines you have money just sitting in your houses.

Sticking to the fundamentals, having an experience mentor at your side,  staying humble, and continuing your education will give you the results your want…..a big residual check.  Going your own way….or feeling invincible are sure signs of failure.  Sounds like I am speaking from experience does it not?

Until next time…….rob

So many lenders! But who is lending? Group picture from CIY in Southern, CA

Greetings from the metropolis of Cedar Crest, NM.  I am back from a fun-filled week in Southern California with my youth group.  Twenty three young adults and four adult leaders (including myself) attended a week-long CIY MOVE (www.ciy.com) event that was mind blowing.  Again, just like when I returned from Bolivia this summer, I am returning home a little more different then when I left. I am seeing things, myself, and everything for that matter….differently.

Anyway…..

Today’s topic is a continuation of financing commercial real estate investments.  We are trying to give you a very basic understanding of the “lending” side of things with regards to buying commercial real estate.

So…….

There are several aspects to obtaining financing for the acquisition of a commercial property. This post will focus on the duties of a servicer and outline this person’s crucial role in the commercial lending process.

What does a loan servicer do?

A commercial loan servicer is an entity that collects, monitors and reports loan payments, handles property taxes, forecloses on defaulted loans, handles late payments and manages insurance escrows. Many commercial lenders also service their own loans. However, some lenders only originate and fund loans and then sell the loans to a servicer to handle the maintenance issues of the loan until the entire debt obligation is fulfilled.

How are loan servicers paid?

Loan servicers make money from small fees attached to payments made on loans. The fees usually are .5% or less of the periodic interest payment. This means that if a mortgage balance is $200,000 and the servicing fee is .5%, the servicer can retain ((.005/12) x 200,000)=$83.33 of the next payment before passing the rest of the payment to the loan note holder.

Loan servicing is traded in the secondary market like mortgage-backed securities. Servicing strips, which are securities created from cash flows resulting from servicing fees, are the commodities traded. These strips are used for valuation of the security when traded on the market.

What can my servicer do for me?

It is important to know who will be servicing your loan when you are in the process of obtaining financing. By understanding your potential servicing partner’s policies, you can develop the right financial planning strategy. For example, if your lender does service the loans they make, they may have more lenient policies for prepayment or delinquencies because they will want to retain you as a client for future deals or refinancing. Lenders who do not service their own loans may not know the full servicing policies of the companies they sell their loans too. If you are obtaining a loan that may need to be refinanced in a few years, it is important to know what options you have.

I hope you are learning from our blog.  Please be sure to register to get our free video series on investing in commercial real estate.

Until next time……rob

Take action huh?

Greeting from the metropolis of Cedar Crest, NM.

Now that basketball camp is over for my boys, swim team for my oldest rolls right in.  My son Colt has his first swim meet tomorrow in the big town of Albuquerque.  This should be interesting since I have never been  to a swim competition before.

Anyway…..

Today’s topic is taking the first step in real estate investing.  When I first made the decision back in early 2000, it was due to a real estate investment book I bought at the local book store.  When I first read it….it clicked right away.  I knew real estate investing was where I wanted to be.  I read the book again and again…then went out on my own and quickly figured out…I needed to know more.  That was when I signed up for the bootcamp….yeah…it cost 5K or  7K….which, at the time, was a lot!  But it was the most important thing I did.  Little did I know how my life would change.  The decision to invest in real estate lead to Grassland Investments, Jaxon Texas Property management, Tumbleweed Row….etc…etc.  From that one decision, I became friends with Emily Cressey, Peter Conti, Diane Kennedy….and the list goes on and on.  So…If real estate is in your future or you are already deep into real estate investing but want to make the leap to commercial real esate investing….here are a few thoughts…….

Taking the next step….or jumping off a cliff?

If you have already figured out that you are ready to invest, you have taken the first step toward building your wealth. Your next best step toward smart investing is to do your research. Along with your research, you should find a mentor or seasoned investor that you can align yourself with. Mentors are invaluable assets when you are starting your investment career because they can steer you away from riskier decisions with low payouts and help you navigate the investment process. If you’re reading this, you’ve already found a great group of experts at TheRealWealthBlog.com who can mentor you as you begin your career.

Should I take a Course?
There have been several posts on whether real estate investment courses are worth the money. Real estate investment courses can provide participants with a wealth of knowledge and new tips and tricks for their portfolios. They also can be hundreds or thousands of dollars that would have been better spent on the riskiest of investment. Aligning yourself with a mentor and asking his or her opinion on the course is a great way to evaluate the merits of spending the money.

Should I Look For Properties?
Instead of diving straight into what looks like a great deal, it is better to spend the time arming yourself with the knowledge of what a great deal looks like. A beginner’s assessment of a great deal is going to be very different than an expert’s assessment. And, your first deal will be an emotional accomplishment as well. Having a mentor or relying on the advice of experts, like TheRealWealthBlog.com, can help you determine whether your first deal is the right one.

What Else Should I Do?

1) Educate yourself about your market

2) Find out who the “movers and shakers” are

3) Identify key commercial real estate brokers

4) Find people who are doing what you want to be doing (find those who are successful in commercial real estate investing)

5) Get familiar with comparable properties in your market. Examine how they have performed and determine what amount of work goes into managing them so you are prepared when the right opportunity presents itself.

6) Take action in the right direction…now is not the time to get A.D.D.

And, if you have questions, contact the experts at TheRealWealthBlog.com!