Friday, September 25, 2009
It's no secret, to those close to me, that I am a huge fan of real estate investing. The book of the week was The Wall Street Journal Complete Real-Estate Investing Guidebook by David Crook. I liked this book because it was very informative on a very "real" level. It didn't boast unreal expectations like many real estate books. The methods outlined within this book can take someone with somewhat little knowledge in the field and help them really start making money with investment properties.
There was one particularly helpful chart within this book that I would like to tell you about. The chart outlined how to prepare for your starter property. It is broken into 4 categories: 1-3 months, 4-6 months, 7-9 months and 10-12 months. Each time period has tasks to be completed within it... let me show you.
1-3 months- Educate yourself (read up on real estate investing), Network, Clean up personal finances (pay off your debts and correct credit reports)
4-6 months- Get the business going (interview banks, work on getting a corporate entity established), Walk the streets (know the areas where you will be doing your search), Check out properties (get a feel for the market and crunch numbers)
7-9 months- Get liquid (make funds available for when you need them), Go shopping (make some lowball offers and get a feeling for negotiating), Get preapproved from your bank or financial source
10-12 months- Go for it, do your due diligence, get your money
I think laying out a plan is especially helpful for anyone just getting off the ground. I love to make plans. I actually have plans for myself that range from month to month and even 10 years in the future. It really helps a person get things in perspective... "what do I have to do here to get there?"
Crook also does a great job of directing a portion of his book to novice investors. In his 6th chapter, There's No Place Like Home: Smaller Residential Investment Properties, he explains how to get your cashflow generated with smaller properties. I am a big fan of starting off with a nice duplex. It helps you get a feel for the management environment on a smaller level. I feel that if you are going to have expectations of a property management company, you should understand the field. Additionally, with a duplex you can get a cheap rent (a lot of people think you'll live for free if you have the other side rented, however, when you take in to account the taxes, maintenance, utilities, and insurance you will probably just end up with a much cheaper version of rent.) You will most likely start having a positive cashflow on the second property and then from there... the sky is the limit!
Real Estate is a great investment for several reasons, but I want to clear up a misconception that a lot of people have about real estate investing. A lot of people see their personal home as a investment... however it's not. Several of my authors have explained this concept and Crook does and especially great job of making the point clear with an illustration of a the same house on two pages, one being used as a home and one being rented out. The house being used as a home has expenses just like one being rented out, however, when you use the house as your home your expenses (taxes, utilities, interest paid on mortgage, maintenance, upgrades etc.) in the long run outweigh your financial benefits from the sale down the road. People don't include the expenses of running a home into the "investment" of their home. The myth of having a home as an investment has been passed along for years, but when you see the reality you have an opportunity to change that mind set. Put more of your savings into solid investments and riches will be awaiting you.
I think this book is a really great read for anyone thinking about getting into their first few real estate deals. The Wall Street Journal books are always very well written and they come with little side modules with helpful little tidbits, which I think is a nice way to break up the book and make it more interesting. I think this book is a great, easy read for anybody, but would be especially helpful for anyone that is or aspires to manage people. I particularly love talking about real estate, so don't hesitate to ask me questions if you have any! I would be more than happy to help anyone that wants it.
Amazon Link to buy Complete Real-Estate Investing Guidebook
Tuesday, September 15, 2009
The book of the week was Fish! by Stephen Lundin, Harry Paul, and John Christensen. It was brought to my attention by my Mom and I'm glad she told me about it. The book was a inspirational story with 4 very simple ideas that make worlds of a difference in the workplace!
The book is based around the story of a lady named Mary Jane. Mary Jane and her husband move to Seattle together with their two kids. Some time after moving to Seattle her husband passes away unexpectedly. This puts a lot of pressure on her personal life, as she is now a single mother and all financial burdens have been placed on her. She works at a First Guarantee and had developed the reputation as the "can-do" supervisor. Mary Jane was offered a promotion, but she was hesitant to take it because it was to supervise the third floor. The third floor of First Guarantee was a "toxic energy dump"- meaning that everyone there was a drain on moral, enthusiasm, and overall energy. Mary Jane took the position even with her hesitance because ultimately she needed the money to support her family now. Mary Jane struggled for a little while at this new position, she knew she needed to change the mentality of this department, but didn't know how. One day she took a different route on her lunch break and ended up at Pike's Fish Market. She couldn't believe how much energy was created at this fish market and how everyone seemed happy about what they were doing. She needed to create an atmosphere like that on the third floor at First Guarantee. She was noticed by one of the employees at Pike's named Lonnie. Lonnie helped talk her through her problem department and gave several suggestions on how to improve it. After field trips and many meetings the department was changed with these four ideas:
"Choose Your Attitude"- Everyone should realize that they can choose their mood every second of every day. When you go into work in the morning you can choose to be mad, sad, and upset, or you can choose to be happy, excited, and enthusiastic. When you choose one of the latter emotions, you become contagious and those emotions spread about the office or where ever you are like wild fire.
"Play"- Don't think about work being "work." Everything is what you make it and along with choosing your attitude, you can choose to be playful at work. Just have fun with what you are doing. Think of it as a playful challenge, you can create a challenge for yourself... become faster, more efficient, all around better. And don't think that you can't be playful and also be professional. Whoever said the two are mutually exclusive is completely wrong.
"Make Their Day"- This is a very important one! This is about making your customer's day. This is what will drive your customers to the next level and create an epidemic of a company. Compliment them, include them in jokes, and remember their names if you can. All of these things are what make people come back for more and also tell their friends. Several companies have created an empire by focusing on customer service... see what you can do!
"Be Present"- This means not just showing up, but really being there. If you are present then you are there to play with the customers, scan what is going on around you, and really interact with everyone around you. What happens too often is day-dreaming, boredom, just keeping the status quo. Being present is what gets you noticed... by recruiters, your boss, your professors... whatever the case might be... be present and get ahead!
The four tips in this book are relatively simple all you have to do is be conscious of them. It is very important not to let any environment you work in to become a "toxic energy dump." If you lead the people around you and make the changes outlined in this book, you'll make a name for yourself and really make people's lives better! I think this book is a great, easy read for anybody, but would be especially helpful for anyone that is or aspires to manage people. If you have any questions on the book don't hesitate to ask. I would be more than happy to help anyone that wants it.
Amazon link to buy Fish!
Wednesday, September 9, 2009
The blog post can be found at the following link: How to read 300% faster in 20 minutes
If you have any questions on this subject I would be more than happy to help.
Saturday, September 5, 2009
The book of the week was another from the Rich Dad Series, Own Your Own Corporation by Garrett Sutton. This book has a simple purpose, to inform the reader the differences between the most popular forms of corporations and how to get them off the ground. If you read my blog about the book Rich Dad, Poor Dad by Robert Kiyosaki, you would understand the benefits of starting your own corporation. I suggest you read it if you haven’t already.
Sutton makes it very clear not to start a sole proprietorship and general partnership. These two entities offer no personal protection. The good types of corporations are C corporations, S corporations, Limited Liability Companies, and Limited Partnerships. Each of the "good types" offer great asset protection, which means, if your company gets sued your personal assets are safe. You will only be risking the assets that are in the corporation’s name.
The book also shows the benefits of starting a corporation in Nevada. In Nevada, you will save money on taxes, maintain privacy, and maximize asset protection strategies. Sutton does a great job of sorting through the details of each portion of the book. From the start-up process to coming up with money, he does a great job of explaining the ins and outs. However, he does make it very clear that this book is not to be a substitution for legal advice and that if you are to go through the process you need to get a lawyer. He even suggests interviewing a few lawyers and picking the one that seems to have you and your company’s best interests in mind. This lawyer is going to be on your “team” and as Robert Kiyosaki says “Business and Investing are team sports.”
I think this book was really good for someone that has intentions of starting up a company. If you don’t have this goal in mind, I wouldn’t worry about picking it up. Read Rich Dad, Poor Dad first, and see if starting your own corporation is really for you. This gives you the jump start you need if you want to live like the "rich" do i.e. not pay taxes and having self sustaining cash machines in your life. I think that having this in your life is the best way to retire truly wealthy.
Sutton’s book is very detailed and it’s a lot of information to take it, which is good if you are going to keep up with all the legalese your lawyer may throw at you. I am a big advocate of having background information on any subject I might need help with. Whether it is law or accounting, you’ll spend a lot less money on your advisers if you go strapped with knowledge. If you have any questions on the book don't hesitate to ask. I would be more than happy to help anyone that wants it.