Record Home Price Drop in January 2009 Good News for Investors

Record Home Price Drop in January 2009 Good News for Investors

It’s no secret that the key to investing success is to buy low and sell high. Whether you are investing in stocks, gold, silver, real estate, or coffee beans a weak market is an investors dream.

The Standard & Poor’s/Case-Shiller 20 city housing index released on Tuesday, March 31, 2009 dropped by a record 19% in from January 2008. This is the largest decline since the index started in 2000. Their 10 city index also dropped by a record 19.4%. All twenty cities indexed showed both monthly an annual declines.

While this news is dismal for homeowners already inverted or nearly inverted in their mortgages, its great news for investors of real estate. Historically speaking we can expect to see housing prices climb to nearly their heyday of 2006, from where prices have fallen 30%. In 2003 we saw similar lows which reversed in only three years.

Some economists are now saying that March 9^th was the bottoming out of the current recession, and home sales are up. This could be the hot time for investors to pick up properties and flip them in a relatively short period of time.

Even though no one can predict exactly when the best time to buy will be, we can learn from past events what the best time to buy was. It looks like right now will be the time investors will wish they had picked up properties.

As always, keeping you abreast of exciting market news to coach you to ultimate buying and selling machine success,

Larry Goins

Setting Goals in Real Estate Investing

How to Set and Achieve Your Goals in Real Estate

By Larry Goins

I want to ask you two questions. One, do you have a Will? And two, do you have written goals for the next one, three, five and ten years? If you answered yes to the first question but no to the second, you are planning more for your death than you are while you are here. Think about it. I want to challenge you to start setting some goals, but remember if a goal is not in writing, it is simply a conversation. It must be in writing and it must have a deadline. Here are a few guidelines for setting goals. Oh, by the way... you need a will also.

Goals Must be Specific

I want you to be specific and include details but start rough. When you start rough for example, you want a Mercedes. You do not have to get into the details about what color, what options, that sort of thing, just write it down. Make your list huge, what kind of home do you want, what you want for your family, college education, spend more time, travel, anything you can think of. You can come back later and prioritize them and set them up as to what you want in one month, three months, six months, twelve months, then three, five, ten, twenty, thirty year goals. The more goals you have, the happier you will be, the longer you will live, and the more prosperous you will be.

Goals Must be Believable

Remember this, your goals must be believable, by you, or you will not pay the price. They must be believable, they must be just out of your reach, but you must know you can reach them, if you really strive to do it.

Goals Must be Measurable

You cannot set a goal to be financially independent. There is no way you can measure that. You need to set a goal for the amount of income you want per month, per year, the amount of equity that you want in properties – one, three, five, ten and twenty years. It must be measurable. That way you can break it down to what I call “reduce it to the ridiculous”. If you know you want to earn $100,000 a year, you know that is $8,333 per month. That’s just one deal a month where I live. One of the things I have learned is, successful people set their goals quickly and they make adjustments as they go along. Just like successful people make decisions quickly, they do not vacillate in indecision or what I call sometimes; get mixed up in a funk of negativity.

Goals Must be Congruent

Your goals must also be congruent with your actions. You cannot set a goal to work harder, longer hours AND a goal to spend more time with your family. Those are not congruent. They must be congruent with your actions.

Visualize What You Want

Another good thing that will help you with your goals is to visualize what you want. If you see yourself as already having achieved the goal, you will fake out your mind and your mind sees the goal as already having been achieved. It’s called “fake it till you make it”. I used to do this all of the time. Just take a minute or two each day and think about life as it is with your goals already accomplished. It’s really easy when you get used to it.

Work Your Goals

The next thing you want to do is work your goals, work on the priority that moves you closer to your goals every day.

Number Your Goals

Number your goals in the order of importance. Not only is the goal important but so is the reason. Sure your want a car, but why do you want the car? Sure your want more money, but why do you want money? You want to be able to spend more time with your family, you want to be able to travel, you want to buy a Hummer, and you want to have an ocean front condo or send your children to the best college. Whatever it is, the reason must be there. The reason is more important than the goal itself.

Review, Monitor and Make Adjustments

Another thing you need to do is review, monitor and make adjustments on your goals. You have to be flexible. Some things are not going to happen, you have to face that; but you need to continuously strive to get better every day. If you will work harder on yourself than you do on your job then you will always be growing. Remember that last sentence and write it down as it is worth repeating.

The Goals Must Have a Deadline

As I mentioned first, your goals must have a deadline. A goal without a deadline is just a conversation. When beginning to set your goals, I want you to set your goals in four basic areas:

Financial

You will set goals based on income, equity or net worth and cash flow. All of these are financial goals.

Fitness

This is your health. If you don’t feel good, chances are that you are not working at your maximum capacity. So, I want you to set some fitness goals to stay healthy. Remember “an apple a day”? What if this is right and you are not doing it? Start small though, you don’t try to tackle all of these at once; but you need to be healthy not only for you but for your family as well.

Family

Set family goals. What is an example of a family goal? Maybe you want to take four vacations a year. Maybe you want to visit a new state, three times a year or five times a year. Maybe you want to go see the Grandparents two or three times a year; but maybe not. Anyway, you get the point.

Faith

You need to set some spiritual goals, some faith goals. I am not going to get into a lot of detail about that but that will help you along your way. Remember, if you slip in one area of your goals, you are probably slipping in some other areas. Another thing I want you to think about is the people you associate with. Take a minute and think about this. If you think about your ten closes friends annual salary and divide it by ten, then that is pretty close to what you make. I’m not telling you to get rid of your friends, all I’m saying is whom you associate with, is who you are like, so please keep that in mind. Don’t get rid of your friends, just get some more that are where YOU want to be financially. Most of the people I hang out with now, we all make over $500,000.00 a year. That just blows me away. I never imagined I could make that kind of money…. Well I guess I could, as we are talking about goal setting and visualization aren’t we?

I hope you have enjoyed this article taken from my course called the Ultimate Buying and Selling Machine! that teaches how we buy and sell 5-10 properties a month, never look at them and have them sold in less than 2 hours. For many more articles and a 10 part ecourse on how to create your own Ultimate Buying and Selling Machine! as well as over 50 training audio recordings you can listen to online, download and collect, simply go to www.LarryGoinsFreeOffer.com where you will gain instant access to all of this and 51 Exclusive Editable real estate investing Forms and Documents all FREE! You will also get two FREE real estate investing eBooks, A free Personal Coaching Profile to help you jump start your real estate Investing, FREE Nationwide Wholesale Property Listing Notification, FREE Weekly Training Teleconferences with Different Topic Each Week, FREE subscription to Larry Goins “Almost” Weekly Investing Newsletter, FREE Admission for Two to Investor Palooza 3 Day Training Event, FREE Admission for Two to Larry Goins 3 Day Boot Camp, Plus over 31 Exclusive Articles on real estate Investing and Much More! Just go to www.LarryGoinsFreeOffer.com. Thanks and I look forward to working with you, Larry Goins

Be An Ultimate Property Analyzer

Be An Ultimate Property Analyzer
By Larry Goins

Success in real estate is partially due to having the right tools and knowing how to use them. I teach my students to maximize their time with tricks and tactics that make buying and selling real estate in any market a snap.
One of the most popular tools that I have made available to my Ultimate Buying and Selling Machine students is the Ultimate Property Analyzer. Many property analyzers are big, slow and bulky. They are difficult to learn to use and even more difficult to use rapidly while you are on the phone doing the deal on a property. I wanted to find a simple program that we could use to quickly calculate how much we could afford to pay for a property. But there wasn’t anything available. So I had The Ultimate Property Analyzer created to help my students and I analyze a property quickly. Remember, we make our first offer during our first phone call and this little program lets us do it with maximum confidence.
With the Ultimate Property Analyzer all you have to do is enter the repaired value of the home, use your pre-calculated closing costs and other expenses, and the program gives you an offer automatically. You can even tweak the details around how much you want to make on the deal if you are wholesaling or retailing! It really doesn’t get any easier than that.
Let’s say for example that we have a property with an after repaired value of $70,000. 70% of that ($100,000 multiplied by .7) is $70,000. This is the dollar amount that my investor buyer would have in the property after all the costs are added back in.
I subtract out the hard money closing costs which average four points or $2,800. Now I’m down to $67,200. I also subtract out taxes, insurance, attorney fees, etc. and at an estimated $5050 that takes me down to $64,950. Now I assume that the estimated needed repairs of $15,000 are accurate, which leaves me with $49,950 to work with.
Don’t forget your profit. At this point you want to figure in how much money you want to make on the house. Let’s imagine that I’m looking for a $5,000 tax free income off this property. That means I cannot pay any more than $44,950 for the property. We know that most sellers won’t jump on the first offer, without at least dithering a little, so I’m going to offer a little lower than that. I always make an offer that is not a round, even number. Say for example, I can safely make an initial offer in my first phone call of $38,780.
Why the uneven number for the offer? It lets the seller know that I’ve done my homework on the property. They perceive that I’ve got what I can afford down to the dollar.
Also in The Ultimate Buying and Selling Machine course there is a DVD tutorial on The Ultimate Property Analyzer. Its designed to teach you EXACTLY how to use it so that you can get the most out of it. The tutorial is very short and sweet, and you should be up and running with The Ultimate Property Analyzer right away.
Remember in our office we buy ten to fifteen properties every month. And we don’t go look at any of them. I know you cannot do that just starting out in real estate investing, but once you get rocking and rolling in the business you will be able to do it too. Once you implement my UBM system and set up your own ultimate buying machine you will be able to buy ten to fifteen properties a month, too.
Once the system is implemented and the machine is in place, you can go into any city, anywhere in the United States, and buy and sell property. Anyone can do this. And I will teach you exactly how to do it in just a few hours a week. Imagine using The Ultimate Property Analyzer to make ten or fifteen offers a month. If you close 50% and do $5000 profit on each, that is an extra $50,000 in tax free money every month. I know this sounds like a lot of rah rah and you probably wonder if I didn’t just roll out of an Amway convention. But I cannot help but be excited about the system I’ve developed, the money I’ve made and continue to make, and the people that I’m teaching to do the exact same thing!
In our office we set up new markets every month. Often times in areas that we have never set foot in. For example, we just completed a transaction in Cleveland, OH (of Drew Carey fame). It was our first deal in Cleveland. We actually sold the property the same day that we closed on it and made $8000 without ever leaving sunny South Carolina. You can do this too!
When buying a property, as I mentioned earlier, you need to be able to get into the deal for no more than 70% ARV (after repair value) including purchase, rehab work, and closing costs. That is when you plan to rehab and sell to another investor. But, if I am looking at a property that is an “Instant Landlord” opportunity – already fixed up or already in good shape, I can go up to 80% of the ARV. I wouldn’t recommend going any higher than that. You don’t want to risk getting upside down in your financing or your real estate ownership. You want to leave a little bit of wiggle room in the event you ever need to sell quickly.
If you stick to the 70-80% rule, you will always be able to sell a property. Now remember these are percentages that hold pretty true in my area. Your location may be different. Talk to other investors near you and do some research to see what the market will bear. Also, if the property is already in good shape and doesn’t need any repairs, you can get into the deal without a rehab loan. Therefore you could probably even qualify for a traditional loan up to 100% of the ARV depending on what your credit would allow you to qualify for. Perhaps you could do this with no money down. But, if your goal is to buy, fix it up, then re-finance and rent out, in most markets you will need to stay within the 70% ARV range. Fix it up, then re-finance at 75-95% of the loan to value, and pull out your cash.
That cash is of course Tax Free as you don’t pay tax on borrowed money. Then you can rent the property out at positive ash flow and have Tax Free cash in your pocket.
I hope you have enjoyed this article taken from my course called the Ultimate Buying and Selling Machine! that teaches how we buy and sell 5-10 properties a month, never look at them and have them sold in less than 2 hours. For many more articles and a 10 part ecourse on how to create your own Ultimate Buying and Selling Machine! as well as over 50 training audio recordings you can listen to online, download and collect, simply go to www.LarryGoinsFreeOffer.com where you will gain instant access to all of this and 51 Exclusive Editable real estate investing Forms and Documents all FREE! You will also get two FREE real estate investing eBooks, A free Personal Coaching Profile to help you jump start your real estate Investing, FREE Nationwide Wholesale Property Listing Notification, FREE Weekly Training Teleconferences with Different Topic Each Week, FREE subscription to Larry Goins “Almost” Weekly Investing Newsletter, FREE Admission for Two to Investor Palooza 3 Day Training Event, FREE Admission for Two to Larry Goins 3 Day Boot Camp, Plus over 31 Exclusive Articles on real estate Investing and Much More! Just go to www.LarryGoinsFreeOffer.com. Thanks and I look forward to working with you, Larry Goins

Is Luxury Real Estate a Good Investment?

How to Analyze a Luxury Home

By Larry Goins

I want to talk about luxury homes for a minute as I get a lot of inquiries about investing in them. Now a luxury home by definition will vary depending on the area. In Orange county California where the median priced home is almost $800,000.00, a luxury home would have to be at least several million dollars to be classified as a luxury home in my opinion. Where as in my area the median priced home is in the $200,000.00 range then a luxury home would be anything around $1,000,000.00. Many investors, especially new investors, call me or email me with a luxury home that they have found and are real excited about because they think it is a real good deal. For example, I had someone recently email me a deal that was worth $1,000,000.00 and they could buy it for $800,000.00. Even though it looks like there is $200,000.00 in profit to be made I want you to realize that with luxury homes you must buy them at a larger discount simply because the values of a luxury home can change so much. I have seen the value from appraisal to appraisal change as much as 20%. In the example above… there goes ALL of your profit. My solution to this, which I actually learned from luxury home expert Frank McKinney, is that you need to be able to buy a luxury home at no more than 50% of its value to make a good profit on it. This is because there is less of a market for a luxury home making them harder to sell and because of this they can vary in price quite a bit. Please keep this in mind and don’t get too excited when you can get a luxury home at a 20% discount. That’s a good place to start but you need a better deal than that. Don’t think that you can’t buy a luxury home at 80% and retail it and make money on it. That’s not what I am saying at all because there are more things that also come into play here. If you are in a hot market and you know you can sell the property fast at retail and you are totally comfortable with the appraised value then you can make money on an 80% deal. Just remember luxury home values can change fast and there are fewer buyers for them.

If you would like to learn more about luxury home investing from Frank McKinney just go to www.brainpickapro.com and scroll down to find Frank and you can listen to me interview him.

I also interview a different speaker each and every Wednesday
night at 9:00 pm Eastern. The number to call into is 646-519-5800 and enter pin number 0011#. You can also listen to an interview I did with luxury home expert Marco Kozlowski where he shared how he buys and sells luxury homes with only $100 invested and sells them by auction. Once again just go to www.brainpickapro.com and scroll down to find Marco Kozlowski.


I hope you have enjoyed this article taken from my course called the Ultimate Buying and Selling Machine! which teaches how we buy and sell 5-10 properties a month, have them sold in less than 2 hours and never leave the office or look at them. For many more articles and a 10 part ecourse on how to create your own Ultimate Buying and Selling Machine! as well as over 50 training audio recordings you can listen to online, download and collect, simply go to www.LarryGoinsFreeOffer.com where you will gain instant access to all of this and 51 Exclusive Editable real estate investing Forms and Documents all FREE! You will also get two FREE real estate investing eBooks, A free Personal Coaching Profile to help you jump start your real estate Investing, FREE Nationwide Wholesale Property Listing Notification, FREE Weekly Training Teleconferences with Different Topic Each Week, FREE subscription to Larry Goins “Almost” Weekly Investing Newsletter, FREE Admission for Two to Investor Palooza 3 Day Training Event, FREE Admission for Two to Larry Goins 3 Day Boot Camp, Plus over 31 Exclusive Articles on real estate Investing and Much More! Just go to www.LarryGoinsFreeOffer.com. Thanks and I look forward to working with you, Larry Goins