I know of some people who have become totally caught up in the euphoria of newfound knowledge and just couldn’t stop buying audio programs and attending very expensive seminars and bootcamps. This seminar junkie must have spent at least $50,000 within a 12 month period and still hadn’t bought their first investment property. They were just bouncing around from one great idea to the next.
I don’t know whether, in their case, it was because they were just caught up in the excitement of that environment, whether it was their way of convincing themselves they were active when they may have been too scared to get started, or they were honestly trying to find the best strategy for them. I’m guessing it was a mix of these things.
Full article… Don't Become A Seminar Junkie: Experience Is The Best Teacher
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Filed under General, Getting Started by Scott Roemermann
Education is paramount to success in any endeavor but when we are speaking of investing it is most important to consider its impact on risk.
Investing is widely regarded as a risky pursuit by amateurs and those who are uneducated in the field. To professional investors, a person’s education or knowledge of an investment is by far the single greatest determinant of risk. A well-educated investor can always walk away from a ‘risky’ deal.
A lack of knowledge sees so-called investors get into difficulty time and time again. Whether it’s the first time investor who just bought a house in a bad location that is losing money or the guy who thinks he’s smart because he has a nice paper profit after some blind luck in a stock market boom. Chances are that if they don’t know what they are doing they are headed down a bumpy road.
Full article… Education in Real Estate Investing: the best risk mitigator
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Filed under General, Getting Started by Scott Roemermann
August 15, 2008
Real Estate Speculation: Don't Fall Into This Trap
When we become overwhelmed by uncertainty there are often two extreme behaviors which ensue:
- at one end of the spectrum we have complete inaction
- at the other end, is rash action without really knowing what we are doing, which we often call "jumping in"; or in the investing world, speculation.
In my previous post about risk reduction techniques we looked at various ideas to help reduce the risks that might be preventing you from taking action and doing your first deal. Following on from that, I thought we should address the other extreme since we want to find a happy median that allows measured but confident action.
While taking a leap of faith in some ways is admirable and often gets the desired result of creating momentum it can also mean financial suicide. One of my favorite sayings is "you cannot steer a parked car" so I would probably prefer to see people taking action rather than doing nothing but let's take a look at the differences between smart investing and just plain speculating.
The following are things you should do to ensure you don't find yourself in the dangerous territory of real estate speculation when making an effort to get started.
Full article… Real Estate Speculation: Don't Fall Into This Trap
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Filed under Getting Started, Strategy by Scott Roemermann
July 29, 2008
How to Reduce the Risk of Doing Your First Deal…
I've been polling my readers for a while now about how many deals you've done and not surprisingly the vast majority of you are yet to do your first real estate deal – which is no problem at all. We're going to fix that soon enough.
It is exactly these people I want to help most because I think the bulk of the information online is quite advanced and there are few resources aimed at helping you with that internal struggle with doubt, confusion, lack of confidence and of course risks.
To help you overcome these issues and start making offers, with confidence, I am trying to go back and put myself in the shoes of a beginner again by recalling the concerns and emotions that held me up when I was getting started.
Full article… How to Reduce the Risk of Doing Your First Deal…
Popularity: 23% [?]
Filed under Getting Started by Scott Roemermann
May 30, 2008
Letter of Intent to Purchase
We've been talking about ways to reduce risk for beginners so you can muster enough courage to do that first deal. One of the best ways to mitigate risk in real estate is by doing a thorough financial evaluation as part of your due diligence.
But here's a great tip from our friends over at FlippingHomes.com. Using a Letter of Intent to make your offers is a great way to ease your nerves as a beginner and I strongly encourage you to start applying this idea if you are having trouble getting started. I used this approach myself when starting out and it certainly helped me. I remember being quite anxious signing a contract for the first time. So for those of you looking for a little more peace of mind, this might help.
So, there you have it. A quick and easy tip today but a very effective one for beginners.
Popularity: 6% [?]
Filed under Acquisitions, Getting Started, Videos by Scott Roemermann
Rather than just give you my analysis spreadsheets, my objective with this article is to show you how to develop your own. It is critical that you learn how to do so if you are to succeed at real estate and I want to encourage you to begin "playing" with Excel as soon as possible. This will be far more beneficial to you than giving a cursory glance to someone else's work because it is easy enough to understand. Consider this a case of teaching you how to fish and feeding you for a lifetime rather than giving you a fish and feeding you for a day.
You see, chances are my spreadsheets would not even be suitable for you because I am likely using a different investment methodology. Even if we are both using a similar technique there could be small differences based on our respective financing or some other aspect that means it doesn't quite fit.
But more important than any of that is this:
I have found that the greatest benefit of developing your own analysis spreadsheet is that you become intimately familiar with the numbers. By the time you've developed it and used it a few times you understand the numbers inside out and upside down and have a thorough understanding of what numbers are most important and what effect certain adjustments will have.
Full article… Financial Analysis of the Deal: A Real Estate Investor's Most Important Skill?
Popularity: 8% [?]
Filed under General, Getting Started by Scott Roemermann
When I think back to when I got started as a real estate investor and try to put myself in those shoes again I remember the things I was looking for at the time were very much about minimizing risk.
At the time, I desperately wanted a mentor to support me (or tell me exactly which deals to do). I'm sure many, many newbies would love to have a Robert Kiyosaki as a friend so he could just tell them which deals are good and which ones to stay away from. And I'm also sure I've heard Robert tell stories of problems he's had with friends that he's tried to help in this way. But back to the issue at hand.
Why is it that so many of us want a mentor-in-a-pocket above all else when we are starting out?
Full article… Is There EVER a "Sure Thing" in Real Estate Investing?
Popularity: 6% [?]
Filed under Getting Started by Scott Roemermann
