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Our newspaper had originally been focused on the active "deal-finding" investor. Those that seek to spend time searching for the best deals and negotiating with homeowners on a daily basis as part of their main job description. Today, we are launching our first foray into educating those investors with good credit, good income and resources to invest. In short, the bulk of the long-term investors in real estate. As noted in our William Nickerson review, investors can build a fortune investing, smartly and with little risk. A further review of his book shows his theory in practice, or if you have read Rich Dad, Poor Dad you know: buying a rental house on bank money and letting someone else pay it off for you will make you very wealthy.The key to owning rental properties is to deal with your fears directly - we do not recommend nor even condone "fool-proof" systems. We recommend dealing with your most pressing concerns here, in the Basic Education section, and only then moving to the Advanced Lesson on Passive Income. Nothing we write is intended to make an investor think they cannot lose money. Only that they can mitigate their risk. Further, let us add that we are not Tony Robbins nor George Foreman (two speakers at a well-known national Real Estate Training Seminar). We are real estate investors, with advanced education and considerable corporate success in our backgrounds who work everyday to earn positive financial returns in real estate. MOST COMMON REAL ESTATE OWNERSHIP HEADACHES Late-Night Tenant Phone Calls First step, don't answer. Anything that you could help with at 2 A.M. is surely something that could have bee provided ahead of time or can be dealt with at 7 A.M. State law is pretty detailed on landlord's responsibilities, but we know of no state that requires you to be awoken during the night, and certainly not where we work. A decent property management firm can solve this issue easily at some cost. Otherwise, develop a tenant management system. Our company recently adopted a procedure that follows the state property code to the letter and also has reduced management of tenant complaints to the bare minimum. Multiple gurus teach them. Bad Tenants Tear Up the Place Don't rent to bad tenants. Glib for sure, but true. Tenant screening is not difficult. Once again, the gurus are best for teaching down and dirty of all the tenant-screening tricks. The simple rules to remember are don't rent to liars, blamers or criminals. Consistent people behave consistently. Once again, a tenant screening service is not expensive. Who Will Pay the Note? We like this question. You will, from the rents you earn from your tenants. And, after many years, the home will be paid off and there will be no note. A FUNNY STORY We recently attended the Asian American Real Estate Association luncheon and heard a Commercial Real Estate Insider speaking about how he first learned of the magic of real estate investing. Before the days of spreadsheets and even personal computers, he was performing analyses on a local real estate investor on behalf of the business credit bureau for whom he worked. He ran through the numbers and could not believe the investment returns the investor was earning. More importantly, the analyst realized that the tenants of the all of the properties were paying off the debt and earning the investor cash flow at the same time. He scratched his head and made note of the name and gave the investor a very glowing credit review. The analyst, some 40 years later, has done quite well in commercial real estate, since his epiphany. The real estate investor under analysis has done, shall we say, considerably better. It was Gerald Hines. Other articles in Passive Income Investing: BASIC: Passive Investing For Beginners ADVANCED: Passive Income for Long-Term Wealth ADVANCED: Cash Flow Vs. Appreciation and Housing Affordability ADVANCED: Tax Benefits of Real Estate Investing Related Articles -BASIC EDUCATION OVERVIEW - Basic Investing ARV - After Repair Value Birddogging Contract for Deed Dealing with Contractors Estimating Profits Evictions - A Primer Executory Contract Foreclosure Overview Foreclosure Types Overview Hard Money Loans - a/k/a Asset Based Lending* Lease Options Leverage MAO - Maximum Allowable Offer Multi-Family Investing Basics as Presented by David Lindahl on March 4, 2006 No-Money Down Real Estate Investing Options Part-Time v Full-time Passive Investing For Beginners Pre-Foreclosure Profit Calculation Remodeling for Beginners Rent vs Buy Is Really Rent vs Sell Seller Financing as Investor Buying Tool Skiptracing Subject To Wholesaling Return to Listing Return to Investor Education |
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