Post about "Investing"

Real Estate Marketing – Getting Focused

The single biggest question I get from people getting started in real estate (and experienced for that matter) is “how to find deals?” They say, “I don’t know what to focus on in real estate. Should I focus on rehabbing? Should I focus on finding absentee owners? Should I focus on direct mail?”The problem with those questions is that the real estate investor is confused about the whole business of real estate and the marketing plan behind finding the deals. I understand that you go to a three-day real estate training, or you buy a home-study course, and every angle of real estate investing is attractive. You can see the potential in all these different markets.First things first, you have to get focused! This is the only way to get good at overcoming objections and solving problems unique to different types of motivated seller markets.Let’s simplify this whole real estate marketing game and boil it down to this:
Who, What, When, Where, Why & How (And How Much)! Who:
Who is that we are going to be talking to? Who is that we are going to be trying to purchase homes from? You may want to work in one or two of the following markets: foreclosures, absentee owners, our probates, divorces, for sale by owners, tired landlords. This is your market – the who.What:
What are you going to say in your marketing? This may be a real estate marketing script that you follow, a direct mail postcard system that you roll out, or specific copy in your advertisement. Understand, that you are looking for motivated sellers to take action. If you’re taking the time to write a letter, place an ad, etc you want your prospect to do something like call you or email you or listen to a recorded message!When:
When are your prospects going to receive your marketing message? Timing and consistency is everything to your real estate marketing campaign. You need to be the single person (or company) they think of when the moment strikes at which they realize they are, in fact, a motivated seller!Where:
Where are they going to receive your message? Obviously if you’re door knocking, you’ll meet them at their home. But if you are marketing to personal representatives of an estate, the attorney may receive the letter and pass it on. It’s important to think about where your potential seller is going to “see” your message because this will affect the action they take.Why:
This is where your real estate investing exit strategy comes into play. What are you going to do with the property once you’ve gained control? Are you going to wholesale it to another investor? Are you going to fix it up and flip it yourself? Are you going to hold on to it for rental?As you grow into your real estate business, you’ll have a number of options for each deal depending on what’s most suitable for the piece of real estate. You may have properties that you can assign, rehab OR rent. But, initially, decide where you are on your real estate investing scale and work within those parameters. If you are asking: “Should I focus on rehabbing houses or should I target probate?” you’re asking two different questions.How:
The next thing is the communication method. That is ‘how are we going to talk to our potential motivated sellers?’ So let’s suppose your market is foreclosures or pre-foreclosures (the who). The next question is how? There are basically only four methods that we can use to communicate with our target market.1. Driving for Dollars (or door knocking)2. Telemarketing3. Direct mail4. Mass marketingHow Much:
I toss this in because this is going to affect your real estate marketing strategies. How much can you afford to spend? Understand for a few dollars a day, you can have an extremely profitable real estate investing business. It doesn’t take a lot of money to bring in home run deals!Here’s a quick real estate marketing business plan that you can implement immediately using the Who, What, When, Where, Why & How approach:Who: Pre-foreclosures within 2 weeks of sale at the courthouse (note how specific this is) What: Yellow legal pad lettersWhen: Two weeks prior to the saleWhere: Prospect’s HomeWhy: Seller is more motivated and has run out of optionsHow: Hand-written, hand addressed, first class postage and return address labelHow Much: Based on a budget of $100/month, I will send 59.5 letters each week (remember to figure out your marketing budget down to the penny – stamps, ink, paper, envelopes, etc.)And there you have it! 7 Simple Steps for your real estate marketing plan.

How Can You Make Money Investing in 2014 and 2015?

The puzzle in 2014 and 2015: where to invest to make money investing if you can’t make money in stocks or bonds without taking undue risk? I’m not playing the role of cheerleader here; because finding where to invest money if stocks and bonds both get hit will be a challenge. This could happen, so let’s look at our options.For the past 30 years or so, investors both large and small could make money investing most of the time, if they simply invested in both stocks and bonds (about equal amounts in each). How will investors make money if both stocks and bonds are taken out of the equation? Let’s look at both how this could happen and where to invest if it does.In the late 1970s through the early 1980s investors did not make money investing in bonds or bond funds. In fact, losses of 40% to 50% were not uncommon in long-term bond funds. Why? Interest rates climbed – peaking in 1981. Since then rates have fallen, hitting record lows. Memorize this: you make money investing in bonds and bond funds when rates are falling. You lose money when rates climb. With interest rates threatening to go up in 2014, the question is where to invest money without taking on considerable risk.Since the early 1980s, stock losses have often been offset, in part, by the steady performance of bonds. Don’t expect this to happen if interest rates continue to climb in 2014 and beyond. Looking at stocks, you might make money investing in stocks going forward, but not without accepting considerable risk. Look at the stock market’s record since the year 2000: two brutal bear (down) markets produced 50% losses. Since the end of the last bear market (about 5 years ago) the stock market has since gone up over 150%. That begs the question: where to invest money when (or before) the next bear market hits.Believe it or not, the average investor has more latitude in terms of where to invest money than the giant investors (like pension funds and insurance companies) do. For example, a pension fund must make money investing (about 8% a year on average) in order to meet certain obligations. So… what are your choices if you decide to lighten up in stocks and bonds?Unlike some giant investors, you can play it safe with a large part of your money; and wait for future opportunities in both the stock market and bond market. You will hardly make money investing safely at current interest rates, but you shouldn’t lose money. Keep in mind that each of the last two bear markets in stocks produced losses of about 50% and lasted for less than two years. Then stocks rallied and went on to make all-time highs. When stocks get cheap, that’s where to invest money.Another option is to invest money in alternative investments like gold, natural resources like oil and natural gas, other commodities like copper and aluminum, or foreign investments while cutting back a bit on stocks and bonds. If you don’t know how or where to invest in these markets, look for stock mutual funds that specialize in these areas. Let them handle the investment details for you.If you want to be proactive, there is a third way to make money investing or to offset losses if or when stocks and/or bonds turn sour. Where to invest money to offset bond losses: an exchange traded fund like TBT (stock symbol) is designed to go up in value as bonds fall. Where to invest money to offset stock losses: inverse exchange traded funds (like stock symbol SDS) are designed to go up when the stock market falls. Both of these examples offer financial leverage of 2 to 1.The truth of the matter is that it is not always a given that you will make money investing. Frankly, I think that 2014 and 2015 could be a real challenge, and your first goal should be to avoid heavy losses. The answer to where to invest isn’t that simple when neither stocks nor bonds look attractive. At least now you know your options.