How to Be a Real Estate Investor

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Freedom Mentor, Jun 11, 2012 - Business & Economics - 200 pages
America's most trusted real estate investing mentor and coach, Phil Pustejovsky, shows you step by step, how to be a real estate investor, regardless of how much money you have, your credit rating or your experience level. This book was created for anyone looking for a simple to read, easy to follow guide on real estate investment in today's market.
 

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Contents


After pouring through a large number of callers who didnt fit that description I finally discovered someone who said they had 20000 to put down A ...
15
We arrived at the entrance to the driveway On one side of the road was an old half full completely dilapidated garbage truck The neighbor across the...
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I was speechless It worked This actually worked Right before my very eyes this couple wrote out a 20000 check to me personally I said to myself W...
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Right before the closing there was another twist The title company had noticed a very odd detail in the recorded loan paperwork The legal descriptio...
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Think of all the different parts of my first deal with my mentor that most people would never have imagined would have worked First that a seller w...
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Each time I would be in an airplane I would see thousands of homes scattered in all directions On one particular flight this thought popped into my ...
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As always great ideas include great challenges Being a successful real estate investor is much different from being a great real estate mentor Its one thi...
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I so appreciate all those students in the beginning who endured the kinks and glitches first hand Thankfully despite those initial growing pains my stu...
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Although I havent read EVERY published real estate investing book I can safely say that most of the ones I have read dont tell the whole story For so...
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Why Be a Real Estate Investor?
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This term is used for tax purposes and is of great value to real estate investors To illustrate the concept of depreciation think of the life span of a tshirt...
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With all the tax increases and unfair taxing rules why would the government continue to allow this deduction for real estate investors? The governme...
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When you borrow money to buy real estate you are using leverage The people and companies of this world that control the majority of the money s...
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Real estate investing doesnt discriminate based on your age background or ethnicity Youre not too old or too young although you must be 18 years ...
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Real estate is everywhere including where you live A common misconception beginners have is Real estate investing doesnt work in my area Nonsen...
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Investing in real estate doesnt have to be a full time activity You can invest on the side in your spare time Overtime you may come to enjoy it so muc...
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Investing in real estate requires patience We live in a world obsessed with instant gratification Real estate is not instant gratification Usually the efforts...
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How to Think Like an Investor
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When I first got started I wanted to work from anywhere have control over my time be my own boss call my own shots earn what I was worth make ...
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Youre looking for what you really want for your life that you dont already have It can be positive or negative Maybe you want to live everyday in a ...
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Without a Why chances are you wont take the actions necessary to becoming a successful real estate investor Its that important When someone is co...
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Rather than eliminate fear why not use it as a motivator? Instead of worrying What do I say to this homeowner? use fear as your motivation and thin...
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Have you ever known someone that knew what to do but simply wasnt doing it? Has that person ever been you maybe at times? If so why did you fa...
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To take the above example one step further the one action that was most outofthispersons comfort zone was talking on the phone to the property ow...
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Extremely successful real estate investors have a unique attitude on life They view every experience as a test and then every result as a learning lesson...
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A very common behavior amongst new investors is analysis paralysis Rather than take action the person analyzes analyzes and then analyzes some m...
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Sam Walton the founder of WalMart the largest retailer in the world was quoted as saying Like every overnight success its usually 20 years in the ma...
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Successful investors know that there are typically several reasons why a deal wont work and the real big money is made when they are able to discov...
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Repetition is the mother of skill In order to get good at anything you have to do it over and over again Regardless of how well you think you learn o...
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Humility also allows you to learn from your mistakes and to open your mind to new ideas It can be very difficult for someone who thinks they alrea...
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Ironically sometimes the people most willing to advise new investors on the business of real estate are those who have failed miserably at it Such as a ...
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Therefore as you begin this journey make sure you verify the credentials of whoever is trying to advise you on real estate investing If that person is n...
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Thats how we built our apprentice program on mutually aligned interests My students split their profits with us 5050 When they win we win This ens...
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wwwFreedomMentorcombonus
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Youll need at least one mentor and the time to begin searching for that person is sooner rather than later
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Second you should partner with someone who is providing tremendous value The conflict that can most likely plague a partnership is when one part...
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Real Estate Investing 101
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Fast cash or making money now provides you with cash in your pocket For many people extra money is very important to them right now Wealth ac...
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The purpose of real estate investing is to create financial returns plain and simple Can your investing actions help people? Certainly In fact the way w...
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Although there are numerous terms or ways to describe this action the concept is quite simple When you flip or wholesale or buy and resell a propert...
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The foundation for successfully applying this investing approach is being able to find properties that can be put under contract at an amount substant...
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Third the retail store sold you the exact same items they bought from the wholesaler for more than what they paid The retail store made their profit b...
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That is where the word flipping got paired with illegal It was originated from dishonest people selling real estate to a buyer for far more than its true ...
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Discouraged this seller gave up and prepared for the worst possible outcome foreclosure Meanwhile our student was marketing for motivated sellers ...
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This deal exemplified how to do a winwinwin flipwholesalebuy and resell transaction Everyone in the deal benefited even though our student got the...
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A very common example of this technique is that of a builder The typical builder purchases a lot from a developer and then builds a property on that...
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But in some cases with much risk comes much reward For example many builders make less than 10 profit on any one property In isolation that wo...
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When in comes to deciding whether to make some money now or far more money later my philosophy is that a quick nickel beats a slow dime
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An example of asking the barber if you need a haircut When attempting to resell a property to an investor buyer it is common for the prospective bu...
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Some may assume that simply having a good contractor will bridge the knowledge gap necessary to improve real estate Experience has taught us tha...
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Heres an example of where an investor can earn extra money from a commission or fee One of our students had been investing for sometime and m...
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So you may be asking yourself should I go get my license? The answer is it depends For most people the plan should be to go make some money in ...
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However the marketing expertise required to find highly motivated sellers is oftentimes more difficult than negotiating a deal and getting a property ...
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Real estate is not only a fabulous vehicle for putting money in your pocket now It can also create long term financial security In fact this is what real ...
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A noted Yale economist conducted a study of real estate in America from 1900 to 2000 and discovered that adjusted for inflation residential real estat...
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The other issue investors have voiced as it pertains to buying and holding real estate is in being a landlord Some even associate unclogging toilets at ...
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Enlisting a property management firm can be a wise decision They usually have a very good leasing system already in place on how to manage prop...
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How does a property management company have the ability to move a bad tenant into a property? Most property managers send rental applications ...
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Buying and holding real estate differs greatly between different types of properties as well Single family homes can be very easy to resell if a tenant ...
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But the potential downside to putting all of your eggs into one basket is if that basket fails the results can be devastating Using 1031 exchanges an am...
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There is another set of expenses that must be calculated when evaluating any buy and hold deal whether it be a single family home or a large apartme...
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Some experts have said that even if you buy real estate wrong given enough time even a bad investment can correct itself As you learned from the Y...
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The government can actually be a landlords best friend in certain situations too Section 8 is a program that is linked to welfare whereby the governm...
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Real estate investors have strived to minimize the risks associated with traditional buy and hold investing while still sharing in the benefits In other wo...
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There are many ways in which this concept is executed Some investors actually sell the property to the tenant buyer and the investor actually becom...
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With all of these benefits though there must be some drawbacks right? For die hard buy and hold investors they will argue that if you sell a property...
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It has been said that sometimes it is a whole lot easier to get into a real estate deal than it is to get out of one The way to minimize your exposure to pr...
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Advanced Investing Techniques
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Why? First newer built homes for the most part lack enough equity to allow for a wholesaler to pick up a deal at 65 cents on the dollar because most ...
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Fifth as a gross generalization higher priced and nicer area property owners tend to have access to more information and resources and typically have...
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In addition to the ethical issues there are practical issues that can be argued on both sides as well The drawback of not educating the seller of all of the...
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Always do the right thing in business and operate in such a manner that if your actions were ever recorded on the front page of the newspaper you w...
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One of our students received a call from a property owner who needed some quick cash He had a small vacant lot situated in a nice neighborhood th...
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The retail wholesale is a phrase coined by our team to describe when you flip or wholesale a property to a retail buyer The traditional wholesale typic...
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Both traditional wholesale and retail wholesale deals can be true no cash no credit investing transactions Most purported no cash no credit investing st...
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A homeowner that had just relocated approached one of our students with a request to purchase his home for 90000 The home needed a little work i...
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Aristotle Onassis one of the worlds greatest entrepreneurs once said The secret to business is to know something that nobody else knows Heres an ex...
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A pre foreclosure can be defined as a property that has a loan in default and is headed toward foreclosure The length of the pre foreclosure phase ca...
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Pre foreclosures can offer tremendous investing opportunities Borrowers who are days away from a foreclosure date are typically left with very few ...
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Some investors strictly focus on pre foreclosures and can make an absolute fortune while helping people at the same time
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It was a no brainer for our student as well because the total out of pocket was only 5000 and he became the owner of a 140000 property with a loan ...
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As stated numerous times already in this book you should always operate legally morally and ethically Further in some cases what may be legal may ...
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And this investor had based his numbers on what the property would bring as a residential property
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During this PreList phase it has been the desire of many real estate investors to negotiate with the bank and attempt to buy the property before the ba...
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The second way to find a pre list foreclosure is through top producing REO agents that are hired by large institutional investors or hedge funds to sell...
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1 year
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The main drawback is that only a select few states have laws enacted making it advantageous for investors to focus their attention on right of redempt...
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Rather than contact sellers in pre foreclosure one student in a right of redemption state chose to target the owners whose properties had just been fore...
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One bonus that this type of auction has over the foreclosure auction is that the auction company can usually arrange financing for the buyer provide...
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As the number of competitors increase youre chances of getting a great deal decrease Plus when a property goes on the MLS you are now in direct c...
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How do you take advantage of these inconsistencies? Network with the top producing REO agents in your area These types of real estate agents may...
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Many listed foreclosures have a requirement that can be quite frustrating to investors The listing agent will require that anyone looking to make an o...
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Also during states of emergency HUD homes can be used to house emergency evacuees After Katrina all HUD homes in the Southeast were pulled o...
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A very successful investor who owns nearly 150 single family homes has built his miniempire from the following formula As a licensed real estate ag...
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There are a few minor drawbacks though First the property is listed so there will be some competition Second there arent very many of these deals ou...
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A special type of local government seizure involves the selling of a tax lien certificate and the conducting of a tax deed sale With a tax lien certificat...
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While that may sound like a dream come true to pick up a property for 10 cents on the dollar or at the very least to generate guaranteed returns on y...
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The best tax sale deals involve an owner who simply procrastinates to the point where it is too late An example would be a property one of our stude...
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In some areas the city handles the foreclosure process and you can purchase the property at a tax deed auction With a tax deed sale the property own...
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Up to this point you have learned about many of the traditional ways to buy real estate wholesaling pre foreclosures short sales and the vast subject of...
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For many investors a subject to deal is a dream come true First it allows you to become the owner of real estate without cash or credit Second oftenti...
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The key to the subject to is whether or not the seller is motivated enough to allow you to become the owner while keeping the loan in their name To t...
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The reason why so few lenders enforce the due on sale clause is because banks are in the business of lending and collecting money and in most cases ...
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Some investors have circumvented the due on sale clause by deeding the property into a trust that the homeowner has a partial beneficial interest in T...
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Most people are familiar with the iconic building in downtown New York City the Empire State Building What most passers by would probably be bl...
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The one item the Empire State Building lease is missing is the option to purchase the property In fact ownership of the Empire State Building has cha...
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Another way to acquire real estate creatively is to have the owner of the property provide the financing for you This can take on many forms but the...
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Although buying a property through owner financing may provide you with very favorable loan terms as a seller you may want to think twice befor...
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To learn more about how the banking system works there are numerous books publications and resources that describe this fascinating and infuriatin...
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One of our students had renovated a property in a working class part of town and one particular buyer was willing to pay more than full price for the...
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The only problem with this otherwise brilliant plan was that from a tax perspective our student had to pay income taxes on the 10 note as well even t...
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Some investors have employed a solution whereby they put the deed in escrow and therefore if the homeowner stops paying even one payment on a ...
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As always you can buy real estate the old fashioned way by bringing your money or someone elses money to the closing and actually purchasing rea...
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Another solid deal finding technique that lends itself to the traditional purchase technique is sending out large numbers of automated offers to proper...
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Another other peoples money source for you includes hard money lenders which are private lenders that lend money based on the value of the prope...
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Although hard money lenders will allow some of their funds to be used to improve the property they usually do not allow you to borrow the money ...
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Other private money sources may include friends and family who have selfdirected IRAs or other liquid assets who are interested in what they consid...
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Purchasing real estate the traditional way involves only two major components the purchase price and the funding source The first component is fair...
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The only other major niche within the real estate investing world is the buying and selling of notes A note in this context is better known as a mortga...
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Your Real Estate Future
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The best way to approach real estate investing involves creating a plan based on who you are where you want to go and what you want to do Rather t...
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Most successful businesses had a plan before they began On the other hand those who fail to plan plan to fail In order for you to be successful you n...
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Your real estate investing plan should be deeply personal to you It is your plan and no one elses Just like you are different from everyone else your p...
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The most successful people envision what they want before they begin Oftentimes the main reason why someone feels like they are not reaching their...
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Next prioritize these goals based on which ones generate the most emotions inside of you The way you ensure you achieve your goals is to anchor p...
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A great example of this was expressed in the Charles Dickens classic involving Ebenezer Scrooge Scrooge was haunted by three ghosts the ghost of C...
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Why does goal setting work? Studies have shown that the same areas of the brain are activated when you envision and when you actually experience ...
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If you could have a day to do whatever you wanted nonwork related what would be your perfect day of play? Where would you be who would you ...
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Did your perfect day of work vision include real estate? Is real estate a means to an end or is it part of your end? Its OK either way you cant have a w...
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Where do you want to invest? In your own backyard halfway across the globe everywhere? Thinking big is a great attribute Thinking to broad when...
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Even if you arent flush with cash in a bank account right now do you have decent credit? Do you have a job that brings in steady W2 income? Do y...
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If you have tried to invest in the past and failed thats an asset too Discovering what didnt work can be of great value What real estate investing experi...
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Can produce fast and steady cash
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Takes significant time to get paid but sometimes the payoffs can be substantially larger
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For those who know people who have money they want to invest foreclosures can be accessible for them as well
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Not a people business at all Strictly numbers
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Several strategies involve the use of a traditional purchase include foreclosures rehabs and even sometimes short sales Typically a traditional purchase...
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Significant level of risk since a property could go down in value or a tenant could inflict substantial damage as well as legal hassles
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For those with tons of money but no time this can be a great way to invest in real estate Oftentimes people move some of their retirement funds to a s...
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Take your time with this process Allow yourself to reflect and ponder Abraham Lincoln is quoted as having said If I was given 8 hours to chop dow...
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Congratulations you made it to the end of the book That is a significant milestone You are a finisher in a world of starters
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As you can probably tell I put a tremendous amount of time effort and passion into writing this book Although I am a bit biased I sincerely believe t...
172
Appendix A Building Your Team
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If you feel yourself trying to train a team member on what to do you probably have the wrong team member on your hands Sure you may have to e...
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In this section youre going to discover who the most important team members are going to be for your real estate investing business In the beginning...
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The right closing company is the most important player on your team If you have a lousy closing company creative real estate investing can be a nig...
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Your closing company is the first place to start in finding the right real estate attorney In fact many closing companies either are owned by attorneys ...
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Thankfully there is a gigantic short cut to locating a dynamite eviction attorney for each county and here it is Call or go in person to the court clerks ...
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It may be extremely important that you build a relationship with at least one key real estate agent But it may not Because what you really need is not ...
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The MLS is controlled by the National Association of Realtors NAR In order for someone to get access to the MLS in most cases the NAR requires th...
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If you are a licensed real estate agent please dont take offense to what you are about to read The following is what we have experienced over a very l...
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Sadly you have probably learned more about making money with real estate by reading this book than most agents know How is that possible? Most ...
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A very tiny percentage of agents are actually nothing like the majority They are extremely successful There are agents out there that make over 1000...
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There are three types of mortgage people you will need for your team Although it is humanly possible that one mortgage person could fulfill all thre...
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Most portfolio lenders charge very few fees and offer extremely low interest rates This comes in handy when the buyers original mortgage person ca...
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Some of the deals that you will come across may require the use of money in order for you to profit You may not need to use your own money but i...
186
Hard money lenders can be found by networking with other investors in your area When communicating with them ask good questions such as what...
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Hard money lenders with a long track record of lending money to investors in your area are extremely knowledgeable You may find your hard mon...
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General contractors also know other sub contractors and therefore if you have a specific need that the GC isnt suited for heshe will probably know so...
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Finding a tax advisor that understands real estate investing can be challenging Most CPAs and other tax professionals have very little knowledge of th...
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Appendix B Recommended Reading
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Real estate can be a people business Knowing how to deal with people will make you a better investor Dale Carnegies classic after 70 years remains th...
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About the Author
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About the author (2012)

Phil Pustejovsky is a best selling author, national speaker, accomplished investor and has been recognized as the leading coach and mentor in real estate. His works have been featured in CBS MoneyWatch, Wall Street Journal's MarketWatch and Yahoo! Finance. He frequently shares the stage with other legendary wealth experts such as Robert Kiyosaki, Robert Shemin and Peter Conti. Having been a part of more than 1,000 real estate investments himself, Phil is considered one of the most experienced investors alive. And for nearly a decade, Phil has been guiding everyday people to financial freedom though his innovative real estate investing techniques and strategies.

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