Monday, April 21, 2008

CHAPTER TWO OF ACCLAIMED BOOK BY REAL ESTATE INVESTOR JAMES BEST


Before we get started in the nitty, gritty details, I thought I should share some background information on myself with you so that you might have a better understanding of how I approach real estate investing. I used to be a CPA with a large accounting firm and hated every minute of it. Every Sunday night, I would have a pit in my stomach with the thought of having to start another work week. My job in the accounting firm was to go audit our clients’ financial statements. So every day I would go to work at companies that didn’t really want me there. I was an auditor. Nobody likes an auditor.
While auditing these companies, I started to feel like I was on the sidelines watching them make things happen. My clients’ companies were making things happen. They were in the game. I felt as if I weren’t really in the game. I was just checking the score. Who likes to sit on the sidelines? The fun is in the game.
Ever since college, I knew that real estate investing was very profitable. I kept thinking that real estate investing would be a great way to earn a living without having to sit behind a desk all day long. So, like many people, I bought one of those so-called "get rich buying real estate" systems from a TV commercial. I won’t name any names, but if you turn on your TV very late tonight, I would be willing to bet you will find a new version of the same commercial running on some channel. I read every book I could find on how to buy foreclosed homes and sell them for a profit. I can honestly say that I tried everything recommended from these books and tapes. This book has been written with my blood, sweat and tears of real estate investment. As an investor, I have learned from my own real life experiences. As a real estate broker, I have learned from countless clients that have invested in real estate using different approaches.
The approach to investing that we have moved toward over all of these years has been working so well because of the underlying philosophy, which I will explain in detail throughout this book. It took a lot of mistakes to realize why investing in real estate was so challenging. Here are some of my mistakes….

I found out through the school of hard knocks that Get Rich in Your Spare Time really meant spending a whole lot of time making not so much money. One of the books that I read recommended that I go find sellers that would sell their home to me and act as the bank. So, in essence, I should buy their home and they would receive monthly payments from me over time instead of their full sales price at the time of sale. With this approach, I supposedly wouldn’t need a bank and could buy homes without having a down payment. The truth was that the only people willing to accept this arrangement had homes that were garbage. In the late 1990’s and early 2000’s mortgage interest rates became so low that there has been a huge supply of home buyers. Because there are so many buyers, home sellers can get their full sales price without having to take any risk by accepting monthly payments. The real estate market in general over the last few years has been a seller’s market. This means that in most cases the seller calls the shots. If interest rates go into the double digits again, I suspect that these techniques might be more profitable because the market will become a buyer’s market.

Wednesday, April 16, 2008

CHAPTER ONE OF ACCLAIMED BOOK BY REAL ESTATE INVESTOR JAMES BEST

Are You Ever Going to Be Able to Retire or
Are You Going to Mop Floors at McDonald’s?



Have you ever walked into a fast food restaurant and noticed a Senior Citizen mopping the floors or cleaning the tables? I have, and it really breaks my heart. Do you think that the Senior Citizens who are mopping the floors dreamed of the day when they could retire and then work at McDonald’s to earn some extra income? Can you picture them in their 20’s, 30’s, 40’s and 50’s just waiting for the day when they could start at McDonald’s?
I am presenting this on the funny side, but it is a serious point for you to consider. The Senior Citizens you see working are not working because they want to. (Well, some of them probably do want to.) My mother retired a few years ago and has a part-time job because she likes to meet new people and see old friends at work! The majority of Senior Citizens are working because they have to. The reason they have to work is because their monthly income isn’t enough to cover their monthly living expenses.


Do you want to mop floors and clean bathrooms when you hit your golden years? If not, then consider this:

If You Ever Want to Retire in Your Life,
You Better Start to Create Passive Monthly Income Today
What is guaranteed to you in today’s world? Is your job secure? Are you guaranteed to get Social Security or your pension at work? Will the stock market continue with hardly any growth? Study after study has shown that Social Security will run out of money. The reason is because the baby boomer population will go from working and paying to Social Security to retirement and collecting Social Security. The number of people still in the workforce paying into the plan will not be enough to cover all of the outgoing payments made to retirees.
Look at Enron! Thousands of employees’ retirement accounts disappeared over night. Don’t think that you will be safe. The biggest problem that I see most people make is to rely on one income. Relying on one of anything is very dangerous to you. If you are relying on your 401(k) and the stock market crashes, you are going to suffer. If you are relying on Social Security and it runs out of money, you are going to suffer. In fact, many people rely on just one income from their job. What happens when the company downsizes and your one income goes away? Never rely on one of anything. It is far too risky.


You really need to protect yourself from the danger of “one” by creating other multiple income streams. By having 20 income streams coming to you each month, you are not as dependent on any one of them. This book is about building passive monthly income streams that you can live on to ensure your financial security and independence.
When I say passive income, I mean money that you receive every month from your investments. Understand that it takes some work to set up passive income streams. However, once your income streams are set up, you simply have to manage them.
In this book, I will show you how to create on average $58,004 in profits from buying just one single-family home for investment.
Let me ask you a very serious question:
If all you did was invest in two single-family homes and never did any other investing for the rest of your life, would you be better off financially?
Well, I know the answer and you know the answer. It’s actually a silly question; however, the majority of people never ask themselves this question. If you kept your job and had two rental properties that would be three income streams you would have coming to you. As you will see shortly, it is actually many more income streams. Each income stream you create is added financial protection for you and your family.
What is the best investment your parents ever made? Many of you will say that your parents’ best investment would have to be their homes. The next logical question then becomes, what would your parents’ life look like, if they had bought two rental properties 30 years ago? What would the life of the Senior Citizen working at the fast food restaurant be like today had they invested in real estate earlier in their lives? Would they still be mopping the floors and cleaning ketchup off of the tables?
I don’t want to see you cleaning floors; instead, my goal with this book is to motivate you to just invest in a few single-family homes. That’s it. I know that if I can give you the encouragement and tools to get started, you can dramatically change your future. If you take the ideas in this book and continue to buy two homes a year for the next 10 years that would be fantastic! The focus is for you to get started today and build monthly passive income so that you can live life on your terms and not be dependent on any one income stream.
Think about this:
If you were to invest in just one single-family home today and keep it until your retirement, you would increase your net worth by $411,613. You would have a monthly income from this one home in excess of $1,330. (A $100,000 home appreciating at 5% a year for 30 years would
be worth $411,613.) And that’s a conservative example. It could be much more in a market experiencing soaring appreciation.



Just a few homes purchased now could make you a millionaire in retirement. By owning real estate as an investment, you are not relying on Social Security or your employer’s pension. If you are lucky enough to receive Social Security or a pension, super for you! Treat it as a bonus. However, by owning real estate, you are guaranteeing your future financial security and not just hoping for the best.
The amount of income you create from your real estate investing is completely up to you. In fact, how quickly you can achieve financial independence is entirely up to you too. One of my client members, Joe Mercadante, was able to achieve financial independence in seven months at the age of 34. You can create as much income, or as little as you want. The choice is 100% yours.
The reason I am able to say this so confidently is because I have some clients that only create $15,000 on one property and don’t do anything else. I have other clients that create $30,000 on one property and then repeat the process over and over again on other properties.
You see, building your wealth is simple, but it’s not easy. The thought of buying two homes and renting them out is simple. But actually doing it is not easy.
That’s where this book comes in. This book will help you make the simple, easy!

Copyright 2008

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