Greetings!  My blog just got hijacked.  I wonder how that happens…..well….I guess the bright side is that the “blog terrorist” felt this blog was getting enough traffic to hijack.  Well….for those of you that had to endure the nonsense….I apologize.  I wish I could tell you it would never happen again…but then…I am not sure how it happened in the first place.

Anyways….

One of the biggest lessons I have learned in my limited time in real estate investing is that the people to learn from are those with real experience.  As with many of you, I started with books and “boot camps”….and in some cases that works well with residential investing.  But with commercial real estate, the stakes are much bigger and the learning curve is much steeper.  But the “gurus” don’t tell you that.

My biggest mistake was I did not research the people I was learning from.  Learning how to invest from a “guru” that had limited experience with commercial real estate was a big mistake.  Even more of a mistake was learning from gurus who were using other people’s experiences and successes as their own to sell their program.  Yes…this happens a lot more than we think.

Luckily, I was so hardheaded and ignorant, that I took the information with confidence and pushed through.  Sometimes you can push so hard that you take down a wall.  Fortunately, at the time, it was the right wall.  But, with that said, there were a lot of mistakes that only guidance from experience professionals could have helped me avoid.

Now…what I am NOT saying is…”it takes years of experience to start investing in commercial real estate.”  That is not what I am saying at all.  But….what it does take is the correct education and guidance.  Honestly….this is the best way and your success can be realized much faster than you think or what others tell you.

So…you are probably expecting a sales pitch here….but on the contrary, here are some tips on how to get started on your own….that is right…. how to get started without a flashy package and a smooth talking guru….

Rob’s thoughts are ideas on getting started in commercial real estate:

1)  Keep your money for now. Thinking about spending 2K, 5K, 10K on a good looking”how to invest in ……” package where the marketing says “20K in value…but for a limited time….only $4,999.00 you can have the plan to wealth…and my personal phone number.”  When you hear that….tighten up…have a cup of joe….and remember my words here…KEEP YOUR MONEY.

2) Buy a good book on commercial real estate. Don’t buy a book from a “guru” where all the information in the book is to push you to a boot camp.  Now…there are good books out there that are trying to sell you something, but they give you a lot of value too.  One of my favorites is Investing in Commercial Real Estate for Dummies by Harris and Conti.  A great book in explaining the basics.  Another of my favorites but will bore you to tears is The Handbook of Commercial Real Estate Investing by John McHan.  The importance of reading up on commercial real estate is to see if you even have a true interest.  If the books above get you excited, you may have commercial real estate in your blood.

3) Take a Real Estate Licensing class. I recommend Kaplan based on my experience.  The licensing class does not mean you have to get a license.  It is a good course to get you familiar with the laws, codes, etc., in your area for not only real estate but property management as well.  I learned a lot in my licensing class.  More than I thought I would.  But I also learned that one of my instructors had no clue about commercial real estate….just residential 

4) Take the Certified Commercial Investment Member (CCIM) courses. This is the boot camp you want to attend.  Yes…it is somewhat expensive and time consuming.  There are four classes and each class lasts five days.  But, if commercial investing is where you want to be, this is the course you want to take.  This will help you analyze projects at depths you had no idea existed.  You will also learn how to do demographic studies, leases, etc.  Plus the networking at these courses are invaluable.  When you finish all the courses, you will have an opportunity to get certifed but you will have to meet some strict and demanding guidelines just to qualify to take the final test.   But…I digress.

5) Find a friend, make a friend. Find someone in your local area that is successful at doing what you want to be doing and follow their lead (also known as modeling).  This is by far the best advice I can give you.  If you have a great interest in commercial real estate, finding someone who is a success at it is the best thing you can do for yourself.  This may take some time and it is uncomfortable at first….but well worth it.  Chances are this person/mentor will be a real estate agent/broker/CCIM investor.

If you do all the above and still want to go to a smooth talking guru…..by all means….but I definitely went full circle starting out with gurus and ending up with the “right way.”  Real experience from real investor is by far the best way to find success in commercial real estate.

Until next time…..rob

How much did I pay for this CRAP?

Product and Seminar Product Review: Diamonds in the Rough by Wright Thurston

First of all, if anyone wants to buy this course from me, make me an offer. I paid about $800 for it at one of those hype filled pitch-fests they like to call real estate investment seminars that I have been known to spend a lot of money at. (Some well-spent, and some not – depending on if the real estate investing info was any good.)

Somehow, I think that even on eBay I’d have trouble unloading it for half that amount now.

Diamonds in the Rough, by Wright Thurston – What Do You Get?

This real estate investment course was focused on building passive cash flow through acquiring rental property – primarily with a focus on multi-unit and commercial investment property. Wright did this back in the 1970′s or 80′s while working as an IBM salesman in Alaska. In addition to the 3 tape sets (10 tapes each with accompanying manual) mentioned below, this also came with a forms disk and an invitation to a Millionaire real estate investing seminar which I did not attend.

Wright Thurston seems like a nice 60-something guy, and I’m sure he’s bright and great at sales. He’s probably even a heck of a good real estate investor, I don’t know, but I’ll give him the benefit of the doubt.

However, this course, including “Diamonds in the Rough,” “Property Management Magic,” and “Making it Happen” all seem pretty out of date. I should have known when I saw that the product was sold as casette tapes and the forms and contracts came on a 3.5″ inch floppy disc. But I figured, hey, if the information is good, it probably won’t matter.

Is the Real Estate Investment Information Any Good?

Unfortunately the information consisted of mostly entertianing vignettes (like the time a pimp moved into his rental house, or a tenant pulled a gun on him when he tried to raise the rent) but not a lot of meat-and-potatoes “how to” information.

Rather than including letter sets to send out or complicated strategis for negotiating or structuring deals, the advice consists of what Wright probably used back in the day (early 80′s) when he was acquiring these properties… call up real estate agents and ask them about deals, and network with your real estate agent. You probably could have figured that out yourself, huh?

There is not a whisper of anything related to the Internet or any new age marketing…

I have to say that the course is pretty hype-free, but it’s also inspriation-free and relevance-free.

Save your money on this one, unless you enjoy listening to Grandpa tell about how things were back when he got started in investing and everything in Alaska was so expensive, even milk was $5/gallon.

If you’re really serious about getting started with commercial real estate investing, I would advise you to stick right here at our blog, subscribe and write us some comments from time to time. We’ll write back and help you keep on the straight and narrow…avoiding hype and missteps as often as possible.

Real Estate Gurus Revealed: Real Estate Investor Info Product Review – Mr. Preforeclosure, Jeff Kaller

Known as Mr. Preforeclosure, Jeff Kaller, Short sales expert has been on the real estate investing seminar circuit for a number of years. I must have first seen him in 2005 or so.

His claim is that with the incredible Jeff Kaller Short Sale system, you will be able to find, negotiate, buy and sell short sale deals and “Quit Your Job in 90 Days.”

First a few points…

• I do think that it is possible for “any investor” to do short sale deals, but it is often misrepresented as a silver bullet solution to any real estate investment property that is behind on payments. When it comes time to evaluate a house for short sale potential, not all homes are created equal.
• I think doing short sales with banks is harder than it is often made out to be although it is possible and there are many that are successful… Banks want to deal with someone who is professional and likely to close, and someone who has been around the block before, and they want to feel like they’re selling the price for full market value… a steep order in any market. The bank wants to have their cake and eat it, too. A skilled investor will know how to deal with that.
• Experienced nvestors know that not every short sale attempt will go through. You may have to work on SEVERAL deals before you get one where the bank will close at a price you are willing to pay.
• If you don’t want to close on the property yourself, you have to have somebody lined up who can buy the home quickly and who is not getting an FHA loan (because of title seasoning requirements.
• Whether or not you plan to close yourself, you will need to have proof of funds.
• Most but not all short sales take time -sometimes months to close in some instances. Thinking that you can get one done in 90 days is possible but very optimistic in my opinon.  It is possible, don’t get me wrong…but it is NOT the normal result… some will some won’t. Likely yours won’t if you have never done one before…
• If the deals don’t close, it can be frustrating to feel like you’ve wasted a lot of time. If you have a real estate agent’s license, you can list the ones that the bank approves at a price higher than you’re willing to pay, but still below “market” level and try to capture the commission.
• Short sales are sufficiently complicated that I think this is a BIG opportunity for you to do better with a coach to help you. For more information on the guy that I’m working with on short sales, click on the Short Sales Step By Step button on the right…or click here.

Okay… all that Negative Nelly stuff is behind us.

Short sales are not as easy as Jeff Kaller wants you to believe when he’s selling you his course.

But they are do-able and they are one of the best ways to make “fast” cash in this market. “Fast” meaning faster than waiting for a rental to appreciate, and less work than a rehab.

What did I think of Jeff Kaller’s Short Sales Course?

I actually think there were a number of good things to be said about the version of the Jeff Kaller short sale course I bought.

First, he had some great interviews, especially the “$80K per day” man from Seattle. (Seattle is a high-priced market, but with a lot of competition from real estate investors).

Second, he had some good strategy ideas in terms of looking to “double dip” with your short sale prospects by gaining their trust and attention by not just “going for the throat” and offering to buy their house. If you offer to try to help them refinance or pursue other strategies you may be interested in, you can get your foot in the door as a trusted advisor and you can get referral fees if you put the client in touch with mortgage brokers and other vendors whose services they may also need.

The Downside To Jeff Kaller’s Short Sale Program

Unfortunately for me, I felt that a lot of Jeff Kaller’s success was due to his personal style, which I would describe as bull headed and aggressive. Pretty much the opposite of me. On the program, he came across as very disorganized and bad at details. It is clear that he runs his business by trail blazing through the forest and then surrounding himself by people who can pick up the pieces he’s left and put them together in a way that makes sense. I can tell how he might be very “convincing” and “passionate” when he’s talking to the bank about why they should discount a property.

I think there’s a lot to be learned in this program, but if you are a really detail oriented person who needs to be held by the hand and stepped through the process, Jeff’s personal style will probably leave you feeling that you don’t have everything you need in order to move forward.

He sells a coaching program, but that’s in addition to the $800 course I had already bought, and I didn’t feel like Jeff was really the person I wanted to coach me through the short sale process.

I actually found another short sale success story, named Phil, who I really like. He probably does more short sales than anyone else in his state and he’s just started coaching people across the country to expand his reach (he splits deals with his students).

The nice thing about Phil, as compared to other guru’s is that he actually CARES about his STUDENTS and they are actually closing deals.

There are a lot of “gurus” selling real estate investing courses out there who are just WOLVES who want the upfront sale (where they gouge you) and they don’t care if you ever actually get a deal or not.

I’m not saying whether Jeff Kaller is that way, because I don’t know.

All I’m saying is that I know PHIL is not that way, and the students he’s working with seem to be much more successful than the average person who buys a real estate investing course.

He’s not slick and polished and shiny… he’s very real, and so are his results.

If you’ve been looking at Jeff Kaller’s Short Sale system, I would strongly encourage you to check out Short Sales Step-by-Step with Phil before you make a decision…

What the HECK did I just buy from that fast talking clown?

Will This Real Estate Investing Course Work For Me?

Emily Cressey Real Estate Investor and Coach

When you’re just getting started in real estate investing, it’s easy to get caught up chasing big dreams and money. Especially if you  have been to a real estate seminar or class with a real estate guru selling a course about getting rich investing in real estate.

Many “front of the room salesmen” (I understand why they do this, so don’t get me wrong here… I don’t bear a grudge… I’m just laying out my perceptions) are very focused on encouraging you to make a quick decision to buy their product. They use all sorts of persuasive techniques that involve getting you excited about their investment program and the lure of “easy” money so that you will “invest” in their program as a first step toward reaping the riches that lie just beyond, in implementing their systems.

I love these seminars, they are very motivational. However, as a new investor, I found them frustrating, too. Frustrating because I would buy the program, do my best to implement it, and then fall short. You’ve probably been there yourself.

It wasn’t until I bought a (very expensive, in my mind!) coaching program that held me accountable that I was able to acquire my first real estate investments and begin to make some money.

Why Most Beginning Real Estate Investors Fail – Even With Great Training Materials

As I see it, a lot of people enter into real estate investing because they think they’re going to make a lot of money fairly quickly. They know it’s not “get rich quick” and they’ve been told they’ll have to put a lot of work in, but somehow, when that real estate investing guru is waving big checks under their nose and flashing smiling photos of successful students, all that hard work just doesn’t seem as real.

The truth is, most likely – the big checks and the testimonials are real, the system does work, and YOU can do it to.

The challenge is in recognizing what it really takes to arrive at the big-check-cashing moment. What is this business system or plan that you are buying into? What are you going to have to implement to make it work? Is that something you have time to do? Is it the type of work that you will enjoy doing?

Most people think, “Heck, if I can make that kind of money, I’ll do anything!”

It may be commercial real estate investing, owning a franchise, creating a profitable blog, or any number of other “business opportunities.”

Because, when you think about it, buying an investing course you plan to follow is like buying a business plan and starting a business. In addition to the upfront costs of the program, you’ll have ongoing costs for marketing, potentially outsourcing labor, and of course – your time.

Ask Yourself This The Next Time You’re Tempted To Whip Out Your Wallet

What would you judge the prospective level of success to be for a business owner who made a decision to start his business during a 90-minute sales pitch at a seminar or over the phone?

It’s easy to get caught up in the moment, especially if you know you’d like to get started in commercial real estate investing, but you just don’t know how. You’re already a warm and willing prospect. By asking yourself a few key questions in advance, you may be able to save yourself a lot of time and frustration in pursuing a real estate training program that’s not a fit for you.

How To Choose A Real Estate Mentor Who Will Help You Succeed

First you must realize that “real estate education” is an industry, a very big and profitable one in the last few years… there are a lot of folks making much more money selling “how to” information than actually investing.

That’s not necessarily bad, since a lot of successful businessmen and investors are “cowboys” who don’t know what they’re doing differently and can’t replicate it… they’re not teachers at all… and you can get very high quality information from real estate gurus.

The challenge comes in our lack of ability to evaluate the efficacy of the program we’re buying before we make a buying decision. We’re not encouraged to question, we’re just encouraged to rush to the back table before the bonuses run out.

I would encourage you to take the Caveat Emptor warning to heart and start to look closely at any buying decisions you make, especially when it comes to acquiring high quality real estate investing training or information.

1. How much investing has this teacher done and how much does he continue to do?
2. What resources (time, money, contacts, credit, etc.) are realistically needed to implement this program, and do you have access to them?
3. Is this person’s primary business investing, selling information, or something else?
4. Does the implementation of the program involve things that you enjoy or could do well? (Cold calling, door knocking, mailing, etc.)
5. How many people have graduated from this program and gone on to be successful (raw numbers and/or percentage of aspirants)? Can you talk to people who did and DID NOT enjoy the program?
6. Is there ongoing coaching/support to encourage you after the rush of adrenaline and excitement has left and you’re having second thoughts? What if you get stuck along the way?

I think there is a culture of “don’t ask because you don’t want to know” thinking out there when it comes to evaluating business opportunities.

The fact is, that most people who buy a real estate investing program will fail to implement it properly. Months and hundreds of dollars later, they’ll be on to the next best thing. Some of that is due to the nature of us opportunity seekers chasing big easy money. Some of it is due to the nature of the real estate gurus who won’t give you a straight answer, “We don’t track that information,” because they don’t want you to know.

In the wake of the Bernie Madoff ponzi scheme scandal, I think our days of being able to complacently assume success where it is implied are over.

I encourage you to become a discerning consumer of real estate information products.

Don’t look for a magic bullet because it doesn’t exist. Look for a system taught by a leader with a proven track record (who’s students are successful, not just someone who can close on a big percentage of the room) and whose system you will enjoy implementing.

More on this topic and which real estate gurus I like and don’t like coming up!

Post your questions or share your experience below!

Thanks,

Emily