Master Real Estate Course

Lesson #5 Deal With The Best

Objective:

• Identify the super agents in your specific investment area. Find one interested in helping you buy and sell multiple properties.

1. Buy six properties. 2. Love your tenants. You buy a property and you pay off the mortgage. Then you enjoy the income. Then your children enjoy the income. Then your grandchildren enjoy the income. Your great-grandchildren will enjoy the income. When does this end? Now, you know why real estate investing is so great because it never ends. In a hundred years, your offspring will be saying, "Thank you great-great-great-great grandpa or grandma!" Start your family dynasty. This is beyond the comprehension of average people. You can do this. You deserve this.

Background:

The purchase of real estate is the largest financial transaction most people ever make. It's interesting, then, to see how naïve people act with tens of thousands of dollars, hundreds of thousands of dollars, at stake. They don't prepare. They don't study. They see an ad or a sign and blindly put themselves in the hands of an agent who answers the phone. This agent decides what type of housing they can afford and chooses the properties they will inspect.

The standard real estate commission is five percent. If you purchase a $200,000 property, the commission is $10,000. The seller pays the commission, but, of course, it's really the buyer who pays through a higher price. Are you going to pay someone $10,000 for a cab ride between their office and a house?

Unfortunately, this is the extent of service many people receive!

A professional real estate agent who understands your financial situation and is enthusiastic about helping you attain your investment goals is a very valuable asset. Remember, unless you are dealing with a Buyer's Agent, you are dealing with a Seller's Agent. This means that in theory, the agent is working for the seller's best interest and not yours. Be sure to clarify your relationship with any agent. Is the agent working for your best interest or the seller's best interest? Cynically, you might add or is the agent working for his or her own best interest! In other words, do you get the impression that this agent will say anything to anyone to close the deal and grab a check?

Don't relinquish control of your real estate future to just any real estate agent. You want a knowledgeable adviser with a long list of contacts. You don't want a high-pressure, desperate salesperson or a salesperson playing dress-up.

All real estate agents and brokers are not created equal. Laws vary from state to state regarding the education and experience a person must have to become licensed. In many states, the laws regarding who can sell real estate are very lax.

Unless you are a disciplined person, real estate brokerage can be a challenging occupation. The time wasting temptations are everywhere. As an agent, you can start work at nine or ten or twelve. You can leave at three or five or six. You can send out a hundred post cards or a thousand permission e-mails to solicit new business, or you can do a crossword puzzle or read a magazine or surf the Internet. You can go to lunch with an important client or with your girlfriend. You can get a haircut. You can take a nice long walk. You can gossip and complain about the economy. When your job is being a real estate agent, you have the freedom to waste a lot of time and most real estate agents waste a tremendous amount of time.

The best agents are highly disciplined and organized, borne of self-discipline and self-organization. The best agents are optimistic, as well as pragmatic. Like us, they possess a warrior style and attitude.

Stop and think of yourself as a real estate agent. In fact, at some point, you may decide to become licensed. As an agent or broker, you are working every day in the real estate business. You see investors and builders and developers buying properties. You see lots of people making money. If being alert and aware to the business, you don't realize that the BIG money in real estate is made by people who buy real estate and not by agents, how smart are you? The best reason to be a real estate agent is to have first crack at the new listings.

The Good, The Bad and The Ugly

If you deal with a poorer agent, your buying options may become more limited than necessary. Poorer agents tend to pigeonhole clients. They typically try to dominate the agent/client relationship, even though their personal knowledge of real estate may be very limited. Poor agents often make absolute statements such as, "You have to put 20% down". Or, "You can't get a fixed rate mortgage". They tell you. They tell you because they may be unfamiliar themselves with the options that may be available to you. In contrast, the better agents will listen to you and then do their best to bring you and the seller together and to make the deal happen.

   The better agents find a way.
   The poorer agents insist that there is no way.
   The better agents find what you want.
   The poorer agents can't see beyond what they want.
   The better agents know that some clients will buy and some won't.
   The poorer agents need money, and get angry with clients who don't buy.

The poorer agents act as if the deal is done when an offer is accepted. In their mind, they have that commission spent already. So, when any glitches develop, as they usually do, the poorer agents get angry and often hostile to all parties, since to them it seems that someone is trying to take back something that they, the poorer agents, have already earned. The poorer agent gets angry at you, "The bank says that they need four years of back taxes from you and that they need it in two hours. You'd better leave work right now and get those papers or you'll be screwing up this whole deal." The better agent doesn't act like the deal is done until papers are passed. The passing of papers refers to when the deal is closed and title is passed.

Here is an easy test. The better agents are listeners. They are listening to you. You are doing most of the talking. Better agents, whether they know it or not, are following the Military Action Principles^™. They are focused on your needs. The poorer agents are more interested in talking about themselves and their day care problems, their car problems, the bad economy and just about every other mundane aspect of their own lives. The poorer agents want you to listen to them and to sympathize with their concerns. Do you really want to spend hours in a car with this person?

Do you know everything that we say about "average" people? Most real estate agents would be lucky to be considered average.

Here's how a typical real estate office works. A principal owns the business and pays the rent, office expenses and the advertising bills. In exchange for no overhead expenses, the agent works on a strict commission basis, usually 50/50. In other words, that $12,000 commission is split with $6,000 to the principal and $6,000 to the agent or agents involved. It follows that the more agents a principal has on staff, the more money the principal stands to make. The principal only has to pay an agent who is producing. This is why almost anyone with a real estate license and a car can get a job in real estate brokerage. As you study your newspaper's real estate section, you'll invariably find ads stating AGENTS WANTED.

NEVER call a real estate office cold. Always try to have a specific name or a specific address before speaking to anyone. To find out who the best agents are, ask. You want someone who understands your plans and is willing to work with you. Later, you may get your own license, and this issue of agency will be not be a concern. Even if you get your own license, will you still want to hear from and cooperate you're your chosen Super Agent? Of course, you want to hear from anyone bearing moneymaking opportunities!

If you just pick up the phone or walk into an office cold turkey, you could end up with a turkey as your agent. Real estate offices work on a rotating up system. One agent will be up for the next call or up for the next walk-in. As far as the office is concerned, you become the client, the property, of that up agent. If the up agent happens to be someone who knows nothing about real estate, well, that's your problem. Enjoy your twelve thousand dollar cab ride and many hours of frustration, cross your fingers and put a rabbit's foot in your pocket.

When you are a real estate agent, you don't get a paycheck every Friday. Your money comes in large, sporadic chunks. An agent making $28,000 a year probably only sells six houses a year and makes the extra money from listing fees or rentals. This agent may sell two houses one month and then spend four months waiting for the next sale.

This is worth repeating. Agents have a lot of free time on their hands. Many spend that time shuffling client cards, surfing the net, reading newspapers, doing crossword puzzles and running personal errands. Without adherence to a strict personal regime, real estate can be a tedious and depressing profession. You've got to be tough and disciplined to make a six-figure income in this business. It can be done. It can even be done in forty hours per week but, because commissioned sales are based on self-discipline, few excel at brokerage. Also, few agents last very long in the business.

Take an average real estate office with a sales staff of eight people. Four agents are making little or nothing. Three agents are making a decent living of $28,000 to $50,000 a year. One agent is making over $200,000 a year. What separates the six-figure income salesperson from the people making nothing? The answer is not longer hours. The answer is spending quality time. The characteristics of a winner are: preparation, specialization, organization, intellect and effort. If you want to be a winner, you must associate with winners.

Did you know that most peoples' salaries fall within a range of 10% - 20% of their closest friends' salaries? The answer is to have ambitious successful friends, because you'll be just like them!

Agents who are making $200,000 are selling twenty or thirty houses a year. Since they're selling property all the time, they're on top of the current financing situation. They know their buyers. They know their sellers. They know their listings. They know how to negotiate. They know how to be creative and imaginative. They know their job, which is to bring buyer and seller together and make the transaction work. These are the agents you associate with, the winners.

Winning agents know how to structure no money down deals because they've actually sold property with no money down. They know from experience about wrap-around, variable rate, and rollover mortgages. They understand the use of bridge loans. They've dealt with tax-free exchanges and installment sales. They know the investors, the builders, the developers, the remodeling contractors, the bankers, the lawyers and the accountants in your specific area.

Dealing with the best isn't going to cost you more money.

How hard is it going to be to find the best agent? Ask around. Do your research. Often, you have to find these agents. You may have to pursue and solicit them. Find out who is the top agent in your specific area and take him or her to breakfast or lunch. It will be a few dollars well spent. Even if you aren't a perfect fit at this time, their recommendations will be worth hearing.

After looking at the real estate section in your local paper, the free real estate magazines or your personal observation, you have the names of the larger real estate offices in your area. Let's say one office is called Fred Jones Real Estate. You want to talk to Fred Jones. If the principal's name is not in the firm's title, for instance, Horizon Realty, you have to ask for the principal or owner's name when you call. You call the office and ask to speak with Mr. Fred Jones. If Jones isn't in, leave a message on his voice mail or call again. This call has a single purpose: to arrange a sit down meeting with Fred Jones to outline your plans.

Be prepared for this fact of life. This is what Gandhi said about revolutionaries, "First, they ignore you. Then, they laugh at you. Then, they argue with you. Then, you win." Be prepared. When you begin your investment career, you will be dismissed. Very simply, people, even agents, who are not investors, do not understand investors. How can you do what they aren't doing? As you acquire properties, your profile will rise. In the end, when you own your six plus properties, they'll all be falling over themselves to, "Yes, Sir and Yes, Ma'am" you.

Before your appointment with Jones, organize all your notes and downloads and printouts into a folder. When you sit down with Jones, open the folder and spread the contents around a little. Jones doesn't have to see anything. He just has to be given an impression. The impression is that you are neither a random call from an ad, nor a Sunday browser. You are a prepared, organized investor. Be confident. You are on a short path to prosperity. Any agent who wins your confidence and your business should feel very fortunate. This is a win-win-win situation for you and Jones and Nardo. They get your business. You get their experience, expertise and contacts.

Explain to Jones that you have investigated the real estate investment possibilities in your specific area and are planning over the next few years to purchase several properties. You want to deal with a professional agent who can help you implement your investment program. "Mr. Jones, who is the number one salesperson in your organization?" You ask a direct question and you'll get a direct answer. Jones replies, "Don Nardo works for me, and he's about the best in the business". Let Jones sell you on the virtues of Don Nardo. "Don Nardo sells more property than anyone else in this area. Don Nardo knows everyone. Don Nardo is a past president of the Agent's Institute. Don Nardo is this and Don Nardo is that."

You will be visiting many Open Houses as you learn your specific investment area. This is a good place to meet Super Agents. Remember that most Super Agents are not at their desks. Super Agents are on their cell phones. They are out in the field working.

Of course, even at this point, from your research and talking with other investors, you may already know that Nardo is a top agent. One of two things will happen. Either Fred Jones is going to accept you as his personal client or he will introduce you to Don Nardo. Congratulations, you have taken a major step toward your goal. You're dealing with the best.

At this point, Fred Jones is going make you his personal client and being the principal of one of the largest real estate offices in the area, he normally only deals with large investors on significant transactions or he personally introduces you, with a nice build-up, to Don Nardo. You have taken a major step toward your goal. You're dealing with the best.

Meet other area investors. Find out which agents they work with and whose services they can recommend. If there isn't an agent who stands out, there is certainly an opportunity for you or someone else. You may find that there are a hundred agents chasing the same few single-family homebuyers while the investors are being ignored.

Reading your Action Principle^® every day is going to give you substance and confidence while you work with Jones and Nardo. You're going to know what's happening with local real estate, the techniques, the ideas, the financing, all of it. Jones and Nardo are salespeople. They like to talk. They'll like to talk to you, exchanging information, advice and criticism. Maybe it's going to take you three months or six months while you educate yourself before you buy that first home or piece of income property. It doesn't matter because Jones and Nardo realize you're serious and they're not looking for that one commission, but for the many commissions you may generate in the future.

You meet Nardo. You, Nardo and Jones have something in common. Jones knows real estate is great. He's making money. Nardo knows real estate is great. He's making money. You know real estate is great. You will be making money. You get enthusiastic with Nardo. The $75,000 condo appreciating at 10% for ten years is going to be worth $194,530. Right. Nardo knows this. He agrees. You show him your folder and all the research you've done. You tell Nardo you're still at the education stage. Will he help you find the best property, at the best price, get the best financing, etc.? Of course he will. Will Nardo share his expertise and connections with you? Of course he will. Nardo is the best and now you've got the best working for and with you. Nardo becomes one of your principal mentors.

Think about sharing your same grand investment future with unsophisticated agents. They can't make big dollars from real estate and they're licensed agents! How much faith will they show in your enthusiasm? Find your Jones and your Nardo. You get a feeling from people. Feel comfortable. If the above scenario doesn't fit, try it again with the next largest office. This system works. Make it work by finding the experts you feel comfortable with and then, stick with them. You'll rarely have to deal with anyone else after you've found Nardo. Nardo will know you and your objectives. If you see an ad or a sign for real estate from a different office, you can still call Nardo. Nardo will get the particulars for you, represent you, and it won't cost you any more money to put this personal contact to work.

Having an excellent agent on your side is having a big advantage in the real estate investment business. An excellent agent is a facilitator. He or she makes life easier. At a later date, you may find it is in your interest to study for your real estate license and represent yourself.

Don Nardo was a real person, a true early mentor and a good friend. I did get my real estate license and worked independently as both an agent and broker but Don, always the good salesman, still brought me lots of deals. You may end up with the best of both approaches.

Believe in yourself. Do you need anyone's permission to go out and do what you know you can do? Research and become an expert. Make offers. Buy property. Pay off your mortgages. Retire rich in twenty years or less. Average people cannot do this. Becoming a multi-millionaire is nowhere on their life radar screen. However, you are not average. You are a Master of Success. You can do this.

Story:

Jim and Sam and Charlie and Mary and Me

My first income property sale went very well. I was teaching high school and also working nights and weekends as a real estate agent.

It was a late Tuesday afternoon and I was the "up" person for the next call. An older gentleman, Sam Golden, called and asked for Jim McQuade who owned our company, McQuade Realty. Jim was on vacation. This gentleman said that he had been doing business with our company for many years and wanted to list his owner-occupied two-family for sale. I called Jim who told me what to do and say. Jim instructions were, "You can have this listing. This should be easy. Don't screw this up."

Okay, the seller knew Jim and I shouldn't screw this up. I worked for many hours gathering comparable sales information and other relevant sales data. I wrote out a little listing speech, which I practiced over and over. I was anxious, "don't screw this up."

Saturday morning at 10AM, I sat in the owner's kitchen in the first floor apartment. I had my folder and all my papers ready for presentation. Before I opened my mouth, Mr. Golden said, "Just show me where to sign." I said, "But, Sir, I'd like to go over this research with you." He looked at me with a frown, "Research? I don't need any research. I trust you. Where do I sign?" He signed.

I asked to see the second floor apartment. He said, "Sure, just go upstairs and knock. Charlie and Mary are home." I went upstairs. Charlie let me in and to his kitchen table. Mary was working at the sink. I told Charlie and Mary that Sam was listing the house for sale. Charlie seemed surprised saying, "What do you think Mary? We should buy the house. You love Sam's kitchen downstairs." Mary said, "Yes." I told them the price and they both nodded.

I went back downstairs to Sam and told him the good news figuring that he was going to tell me to tear up the contract that he didn't need the services of McQuade Realty. But, instead, Sam said, "You're quite a salesman, young man. Well, you'd better get started on the paperwork."

I remember sitting in my car at 10:20 AM stunned. I called Jim who was not stunned. Sam and Charlie and Mary were not stunned.

I love the real estate business.

Horatio Alger's [b. 1832] Rules for Success

America's First Self-Help Author

1. Make your own luck. You get lucky by working.

2. Whatever you do, do it to your utmost. Give life your all.

3. Become a reader. Knowledge is power.

4. Be a saver, but be generous.

5. Never cheat, steal, or lie.

6. Don't drink or smoke.

Steve Young's Rules for Success

National Football League Quarterback

1. No finger pointing. Be accountable for your actions.

2. Have the tools to get the job done. Train hard.

3. Keep moving forward. Don't worry about the last play. Concentrate on what you are doing now.

Library

Real Estate Investing for Dummies, Eric Tyson

Real Estate Dealmaking: A Property Investor's Guide to Negotiating, George Donohue

Complete Idiot's Guide to Investing In Fixer-Uppers, Stuart Leland Rider

Property Management 101

To find a good tenant and wave on the marginal applicants, you need to find multiple prospects. Here are your options. Use them all: For rent signs on the property, neighborhood flyers, real estate rental offices, newspaper/magazine classifieds, Craigslist, corporate/university/municipal housing offices, word of mouth, property management companies, tenant referrals.

NEVER accept separate checks from roommates. The rent is the rent and should be paid with one check on the date due. Never accept partial payment from one roommate. Let the roommates decide among themselves who will collect and collate the rent and write the one check to you. If one of the roommates is having financial difficulty, this should be the other roommates' problem to solve and not your problem.

If you allow roommates to come and go as they please, you will soon end up not knowing your tenants. If one roommate is moving, this should be negotiated with your permission. The roommate who has signed the lease must understand that he or she is still responsible for payment. If a new roommate arrives, this must be with your permission. This would require appropriate reference checks, credit checks with a new lease agreement, etc. It is not your responsibility or obligation to solve roommate problems.

To avoid unpleasant surprises, preview all units before showing them to prospective tenants. Make sure the units are clean. Make sure the keys and the lights work.

The warrior gives and receives respect. With most tenants mutual respect will be automatic. Your pride in ownership is reflected in the quality housing which they call home. However, you must not accept disrespect from tenants who refuse to follow the rules. Don't bother negotiating. Get rid of them. Hire a lawyer and/or pay them to leave. Get rid of them. They will not change. They will become someone else's problem.

Operational Limitations:

Not all real estate agents are created equal. Some are clueless. Some are obstructionists. Remember our 10-70-20. Ten percent are making no money and looking for other work. Actually, they are looking for somewhere or someone to pay them so that they don't have to work. Seventy percent of agents are dabblers. They make some money but not a lot. Their income may be a second income. Some dabblers just like to play dress-up and go to the office and wait to have lunch and after lunch have their nails done. The top twenty percent are super. Super Agents want to make a lot of money and you are the type of client who can make them a lot of money.

Super agents are busy. You have to find and cultivate them.

Super agents may be exceptional real estate agents but, still, most are not investors. You are a Master of Success. You gather advice. You consider. You make your own decisions.

Jargon:

Blanket Mortgage - The mortgage that is secured by a cooperative project, as opposed to the share loans on individual units within the project.

Condemnation - The determination that a building is not fit for use or is dangerous and must be destroyed; the taking of private property for a public purpose through an exercise of the right of eminent domain.

Easement - A right of way giving persons other than the owner access to or over a property.

Endorser - A person who signs ownership interest over to another party.

Eviction - The lawful expulsion of an occupant from real property.

Forfeiture - The loss of money, property, rights, or privileges due to a breach of legal obligation.

Hazard Insurance - Insurance coverage that compensates for physical damage to a property from fire, wind, vandalism, or other hazards.

Owner Financing - A property purchase transaction in which the property seller provides all or part of the financing.

Pre-Qualification - The process of determining how much money a prospective homebuyer will be eligible to borrow before he or she applies for a loan.

Purchase And Sale Agreement - A written contract signed by the buyer and seller stating the terms and conditions under which a property will be sold.

Real Estate Settlement Procedures Act (RESPA) - A consumer protection law that requires lenders to give borrowers advance notice of closing costs.

Replacement Reserve Fund - A fund set aside for replacement of common property in a condominium, Planned Urban Development, or cooperative project -- particularly that which has a short life expectancy, such as carpeting, furniture, etc.

Question and Answers

At a coffee shop, I overheard two real estate agents talking about listing a two-family house but first they needed some current comps? What did they mean?

Comps are comparable sales. They were talking about researching to determine what similar houses had sold for in the same neighborhood. Naturally, someone who has taken the Master Real Estate Course wouldn't need to scurry around looking for this information because you would already be an expert on current sales and values in your specific investment area.

Do you think as a first purchase that my wife and I should buy a two-family house to live in one unit and have rental income from the other unit? Our only concern would be starting a family.

This is better than a good idea. This is a great idea. Many families grow up in multiple dwelling properties. However, if and when you outgrow your unit, you can refinance the building and use some of your equity to buy a single-family house. Then you will be one-third of the way to your goal of six properties. You will not regret this very smart decision.

What does real estate have to do with self-defense?

The persistence and determination and hard work needed to earn a black belt are the same attributes needed to succeed in business and life. When you are fighting, you can't just stand paralyzed by fear. You have to react and fight back. When you are presented with investment opportunities, you can't let them all go by, you have to take action and buy.

Following Military Action Principles^™ will make you a thinking person of action.

In the past, most people have enjoyed a comfortable retirement because of the equity in their homes. Isn't this enough of a reason to own a few properties?

Of course, you're singing to the choir. Yes, if one house works why not more property?

It is alarming that too many younger homeowners are treating their home equity like an ATM as they continually refinance and dip into the accumulating profits.

You need real estate. You can't rely solely on corporate pensions because there are too many horror stories of one stupid employee making a huge mistake or a board of greedy executives partying with the profits. Don't take the risk. Be self-reliant. Buy more real estate. You don't want to be 85 years old and have to worry about making ends meet with only your Social Security check as income.

I'd like to move my mother into my house and build her an in-law apartment. Are these in-law units legal? My other question is later on would I be able to rent the unit to a regular tenant?

You will have to check the specifics of in-law apartments with your local Building Department. In general, if the in-law unit consists of a one or two rooms and a bathroom, there is no problem. However, if you install a kitchen, then the unit goes from being an in-law unit to a second residential unit, which may be against zoning regulations. If you live in a single-family district, you will not be able to rent any unit to an outside tenant without a special variance from the Board of Appeals.

Don't worry. With the graying of America, this is a common request and the Building Department will have established guidelines to help you.

I always do my research before making an offer. On a recent deal, I made five offers between one hundred and seventy thousand and two hundred thousand on a property that was listed for two hundred and ten thousand. I know for a fact that the owner paid a hundred and twenty thousand for the property only two years ago. How can someone with good business sense keep rejecting fair offers that will give him a huge windfall profit?

Your arguments have no basis. Your research only proves that the seller negotiated a great deal when he acquired the property. This has nothing to do with you. The owner can decide to sell or not sell.

What is this property worth to you today? If that answer is two hundred dollars, then make that offer and relax. If you want the property, you will have to keep making offers up to the full price. Don't moan or whine or complain, learn.

I have made over a dozen offers and not one has been accepted. What am I doing wrong?

You are wrong for not making two-dozen offers. One of the great things about making real estate offers is that they usually don't cost you anything except your time.

Stop and consider. How much money do you stand to make if one of your offers is accepted? On paper, will you make ten thousand dollars or twenty-five thousands dollars or more? There is no risk involved in making offers. The owner can say yes or no or counter. So, is the effort of making offers worth the potential reward? I think the answer is obvious.

Someone like Donald Trump sees hundreds of proposals every month. He probably considers fifty and makes offers on ten. Most of The Donald's first offers will be soundly rejected as ridiculous and insulting. If he is interested, he will make counter-offers and counter-offers on the counter-offers. There will be months and months and sometimes years of give and take. Before a deal is made, the other side will probably have called The Donald every name in the book – a thousand times. The Donald smiles on his way to the bank.

There is a name for all of this negotiation. It is called business.

Is there any reason why I can't sell my own property?

As you become an expert on real estate in your small specific investment area, you will find more and more reasons to become a real estate agent or broker and represent yourself. You will know the buyers and sellers and investors willing to exchange.

As an agent, you may choose to associate with a local real estate office. Or, you may choose to find buyers independently. You can advertise your own listings or use an online service such as Craigslist, http://www.craigslist.com or IsoldMyHouse.com.

I want to start a real estate investment company. Can I use my company name to make my offers?

Yes, you should be able to do that. Let's say that you choose a name like, Combined Westport Property Investments [CWPI]. You would be "doing business as" CWPI. You must register this company name with your town clerk. This would presume that you are operating your company as a sole proprietorship. If you set up a corporation, a corporation is a separate person under the law and provides certain protections but additional tax ramifications. You should check with your attorney and accountant to see how your offers should be written.

If you do decide on a company name, I would suggest selecting one with an available .com domain.

With promises of riches, you make real estate investing sound like nothing more than a get-rich-quick scheme. Why is the hype necessary?

All education is ultimately self-education. My job is to get you motivated and to show you the path to follow. You, the student, have to do the walking. I am a Shaolin Master, a teacher. I wish to share with interested students the benefits of my experience, to help you as I was helped by my teachers.

Yes, I am enthusiastic about real estate investing and I recommend a twenty-year program of buying six properties and owning them free and clear of debt. Is this getting rich quick? It is getting rich with a clear well organized and thoroughly researched plan of action.

You are in charge of yourself. As the Military Action Principle^® Pledge says, "Your life is made from your choices."

I'm another one of those people with not so good credit. I was thinking that I would be best off looking for a property that offers seller financing. How common is that?

Seller financing is usually offered in the form of a second mortgage. It would be unusual for a seller to offer first mortgage financing. Most sellers need the bulk of their equity to purchase other properties. In general, you might find sellers willing to entertain a second mortgage in 5% of transactions or one in twenty. The odds of finding a seller willing to finance 80% or more of the purchase price as a first mortgage is probably less than one percent; it is almost a needle in a haystack.

People's credit is often not as bad as they think. I hope that this is your case. Talk to a few banks and independent mortgage brokers to get their opinion of your creditworthiness. If necessary, start working on any problems that need to be fixed. Do not be discouraged; most people can qualify for a mortgage. There are loan programs for borrowers with past credit problems. However, you may pay a slightly higher interest rate. When your credit score improves, you can refinance.

What is the difference between a fixer-upper and a distressed property?

A fixer-upper needs some tender loving care, (TLC.) It may need some cleaning and painting and organizing and general updating. Anyone can profit from buying a fixer-upper. You improve the landscaping. You get rid of the ugly wallpaper. You buy new bedroom carpeting. You clean the grout in the tile bathrooms. You upgrade the light fixtures. These are all reasonable improvements.

Distressed properties are best left to the professionals. Distressed properties require major improvements and replacements. If the foundation is crumbling, if the heating or wiring system is shot, if the roof is falling in, if the walls are covered with mold or lead paint, these are major problems which require specialized attention and these types of major repairs and replacements can cost tens of thousands of dollars.

The middle ground would be houses that need new kitchens and baths and decks. If you have general contracting skills, you may wish to profit from these projects. Be forewarned; you need experience before tackling "This Old House." It looks easy on television and in the books. It isn't.

Action Plan:

Goggle real estate for your area and identify the top ten real estate agents in your specific investment area. Check their websites. Email them and see if you get a response. Talk to several about your investment plans. Choose one and work exclusively with that one agent until there is a good reason to find someone else.

Alert and aware, for your own good, look at the people who are working in the real estate brokerage business in your small specific investment area. Are you impressed? Are the real estate agents and brokers the same people who own all of the quality income property?

Support:

• For Commercial Real Estate Investors: http://www.costar.com
• For Real Estate and Technology News: http://www.inman.com
• For Those Interested in Institutional Real Estate: http://www.irei.com
• From the Real Estate Library: http://www.relibrary.com
• For the Federal Housing Administration: http//www.fha.com
• For sale by owner: http://www.owners.com
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Inspirational Insights:

Unless you are willing to drench yourself in your work beyond the capacity of the average person, you are just not cut out for positions at the top.

J. C. Penney, b. 1875, founder of J C Penny

The man who has not raised himself to be a soldier, and the woman who has not raised her boy to be a soldier, neither of them has the right or is entitled to the citizenship of the Republic.

President Theodore Roosevelt, b. 1858

While they were saying among themselves it cannot be done, it was done.

Helen Keller, B. 1880, deaf/blind author

It is not because things are difficult that we do not dare; it is because we do not dare that they are difficult.

Seneca, b. 4 B.C., Roman philosopher

Nothing builds self-esteem and self-confidence like accomplishment.

Bill Hybels, b. 1952, evangelist

When negotiating, talk directly with the decision maker.

Donald J. Trump, b. 1946, billionaire developer

Great things are done by a series of small things brought together.

Vincent van Gogh, b. 1853, Dutch artist

Do or do not. There is no try.

Yoda

I would rather be able to appreciate things I cannot have than to have things I am not able to appreciate.

Elbert Hubbard, b. 1856, American writer

There is no substitute for passion.

Donald Trump, Jr., son of Donald J. Trump

The first step towards getting somewhere is to decide that you are not going to stay where you are.

John Pierpont Morgan, b. 1837, American financier

If you do things well, do them better. Be daring, be first, be different, be just.

Anita Roddick, b. 1942, founder Body Shop

It's amazing what ordinary people can do if they set out without preconceived notions.

Charles Kettering, b. 1876, social philosopher

When the character of a man is not clear to you, look at his friends.

Japanese proverb

Success is how you bounce on the bottom.

General George Patton

I consider my ability to arouse enthusiasm among men the greatest asset I possess. The way to develop the best that is in a man is by appreciation and encouragement.

Charles Schwab, b. 1937, billionaire investor

Most people give up just when they're about to achieve success. They quit on the one-yard line. They give up at the last minute of the game three feet from a winning touchdown.

H. Ross Perot, b. 1930, billionaire businessman

It is a comfortable feeling to know that you stand on your own ground. Land is about the only thing that can't fly away.

Anthony Trollope, b. 1815, English writer

Landlords grow rich in their sleep.

John Stuart Mill, b. 1806

I think one's feelings waste themselves in words; they ought all to be distilled into actions which bring results.

Florence Nightingale, b. 1820, nurse

Satisfaction lies in the effort, not the attainment. Full effort is full victory.

Mahatma Gandhi, b. 1869, Indian spiritual leader

Put it before them briefly so they will read it, clearly so they will appreciate it, picturesquely so they will remember it and, above all, accurately so they will be guided by its light.

Joseph Pulitzer, b. 1847, publisher