Today, I’d like to introduce you to Mark and Damien.
Mark and Damien are two regular blokes, living regular lives, with regular jobs. They both live in the same city, make the same amount of money, and got layed off at the exact same time.
Mark makes about $5,000 per month. He’s been working at BigFirmCo for three years, and the company has been weathering the storm. With no question about his job security, Mark recently signed a $2500 per month lease on an apartment in a fashionable part of town. On top of that, Mark drives a luxury car that he pays $750 per month on, and since he’s young, he pays exorbitant insurance rates of another $250 per month on that same car. Mark eats out for lunch almost every day, enjoys his morning latte, and doesn’t have enough income taxes withheld from his paycheck each month because he wants the extra money to spend on his lifestyle.
Damien has a pretty similar job as Mark, and works at OtherFirmCo. His company, too, has been weathering the economic storm. Damien wants to live the good life, but is also weary about the future. He lives with three other guys in a nice place in a nice part of town, but splitting the rent enables him to get by on $750 per month for rent and utilities. Damien still drives the same car he drove all through college. It runs reasonably well, the insurance is cheap, and the gas mileage is just as good, if not better, than most new cars. He spends about $100 per month on insurance and maintenance.
Damien does allow himself a weekly splurge: Every Monday, he and the people on his team at work all grab lunch at a nice little cafe downtown. For this one lunch, he spends twice as much as Mark does each day for his lunch and latte, but Damien is OK with that because it’s a cool cafe and he loves the food and atmosphere.
Even with buying groceries to bring his sack lunch the rest of the week, Damien lives on a total of about $1500 per month, even in this somewhat expensive city he lives in. He maxes out his 401k contribution, and pays in to Uncle Sam each month slightly more than he needs to, in order to ensure that he doesn’t have a tax bill come April 15th.
With all this, Damien manages to save about half his salary every month. At $2500 per month into savings, and having been at OtherFirmCo for three years now, Damien has saved up about $90,000. He figures that this will make for a nice down payment on a house when he gets to that point in life.
However, life takes a detour for both Mark and Damien. On the same day, their companies announce that they are downsizing. As junior employees, Mark and Damien are among the first to get layed off.
Mark is devastated. He has almost no money in the bank, as he has been living paycheck to paycheck. His ego definitely takes a hit when he faces the prospect of moving back in with his parents, since unemployment will barely make his car payment and put food on the table, and definitely won’t cover his rent.
Damien takes a look at his options. He knows that the average job searcher in his field takes at least 6 months to find another job. He could actually scrape by on unemployment for that long, given his modest lifestyle. One of Damien’s roommates, however, suggests that they do something awesome: A year-long, round-the-world adventure.
Damien likes this idea. He’s definitely not into camping and backpacking, so he looks at what it would cost to travel around the world staying in modest, yet comfortable and modern, accommodations. He discovers that doing this actually wouldn’t cost that much more than his current lifestyle, as he could could travel quite comfortably for less than $30,000 for an entire year.
So, he takes his car and belongings to his parent’s house, and sets off around the world. During this year abroad, Damien isn’t worried about money, because he knows he’s only spending 1/3 of his savings. He also anticipates that when he gets back, the job market will have improved. Even during his travels, he’s keeping in touch with his professional network, and if the right job came up while he was away, he always knows he could catch the next flight home to take up his dream job.
Two men, same city, same salary. Different financial choices, different result when layoffs came.
Damien knows how to become rich, even slowly. Mark doesn’t.
If you want to learn to be rich, be more like Damien, and less like Mark.
Making money online with totally free tools is not difficult, as long as you have patience, work at it a little bit every day, and are willing to put some sweat equity into it. Outlined below is a very simple, very effective approach that, in reality, has been working quite well since the 1890′s, just updated for changes in technology.
This is an 80/20 thing: This is the 20% of the activity that will yield you 80% of the results. This basic Internet marketing model has been used since the beginning of the public Internet. Heck, I was using an even lower tech version of more or less the same business model to sell shareware over 2400 baud modems back in the BBS days. It’s the same generic business model that countless Internet marketers use. Yes, there are bazillion improvements you can make, and a bazillion possible nuances to it, but don’t let anybody fool you that it needs to be any more complex than this.
This is the basic business model that Jassen currently uses to make a living, in multiple niches. The only difference is that Jassen doesn’t really like making videos, so he uses paid Facebook ads to help drive traffic instead of YouTube. He also uses an even lower tech strategy occasionally to drive traffic to lead generation web sites: Direct mail (snail mail).
The point is that the principles are identical, and the content creation/distribution strategy is, simultaneously, the SEO strategy. There are no SEO tricks here, it’s just natural, easy SEO.
So here you go, a profitable, free online business model in one post. Enjoy.
1. Pick your niche.
2. Sign up for a free MailChimp or Feedburner account so that you have something reputable to manage an email list with.
3. Install WordPress on a free or cheap web hosting account. Starting writing original blog content at least weekly.
4. Put up a simple opt-in form offering a free report you wrote, an audio download that you recorded, something of value to give away in exchange for opt-ins.
5. Be active and helpful in the most popular forum/board for your niche.
6. Syndicate your articles onto EzineArticles.com.
7. Put videos up on YouTube. There is a guy doing a YouTube traffic product launch right now and his free videos for the pre-launch provide all the info you need to do well with YouTube.
8. Build that list.
9. Start offering reputable products as either an affiliate, or better yet, your own products, to your list.
10. Rinse and repeat.
It’s long been known that success isn’t an accident. Rather, successful people are successful because that decided to be so, and took steps towards becoming so.
There is an oft-quoted saying: “Successful people do the things that unsuccessful people are unwilling to do.”
On this site, you’ll notice that we approach real estate investing in a very methodical and organized way. Both James and Jassen are, coincidentally, former Naval nuclear power operators. Our military training for the safe operation of nuclear facilities carried one mantra above all others: Verbatim compliance with written procedures.
Basically, this means that not a valve is turned, never a button pushed, without following a written checklist for accomplishing the task at hand. On top of that, all checklists often referenced other checklists where necessary, to ensure that interconnected plant systems were shut down, bypassed, or otherwise placed in a safe condition to permit the operation we were working on.
The same methodology should be applied to every business. You should rule your business with an iron fist. From measuring the effectiveness of all your marketing, to ensuring that employees are doing things the right way every time, a successful business should operate as smoothly and with as much precision as a nuclear powered warship.
This is a quote from Tommy Newberry, the author of Success Is Not An Accident. If you have not read this book, it is worth reading.
“Success is a planned outcome, not an accident. Success and mediocrity are both absolutely predictable because they follow the natural and immutable law of sowing and reaping.”
Simply stated, if you want to reap more rewards, you must sow more. The way that I look at this entire concept of success and motivation, this entire universe of gurus, motivational speakers — the Dan Kennedy’s and the Tony Robbins of the world — is that their fundamental job is simply to get you to do more. Too many people fail to see the results that can be achieved by simply taking more action. You may have heard the phrase “massive action leads to massive results”, and it is true.
You need to focus on doing more, and be eliminating activities that do not contribute to your goals. You should be using systems, checklists, and business management best practices in order to achieve that. You have to plan for a successful outcome, and execute the steps that will get you closer to that success point. You cannot just stumble into it.
You can choose to consciously put into practice a plan to achieve whatever it is you want within your business. If you want to work two days a week without a drop in revenue from where you are currently at, that is actually possible and people do it all the time. If you want to double or triple your revenue, and expand your product/service offerings, you can do that, too.
The bottom line is that success is a process, and it requires a plan. This concept of planning for an outcome is definitely the converse of not planning for mediocrity. Your failure to plan will lead to mediocrity.
At the end of 2007, as I was about to lose my home to foreclosure and a Chapter 7 bankruptcy was imminent, I had the same feeling that most people do in that situation: If only there was more money…
What I didn’t realize at the time was that, in reality, there actually IS more money. As a matter of fact, there is an infinite supply of money.
Now, I’m not saying that from some hokus pokus, “picture it in your mind” sort of perspective. I mean it from an economic reality.
Very few people realize this, but it’s true: Economically, the money supply is boundless.
The money supply has been expanding ever since the day that people first decided to use rocks and wooden objects to represent value in trade. From a textbook economics perspective, the value contained in the global economy has been expanding for a few thousand years. It just keeps growing and growing.
How can this be? It’s pretty simple, if you think about it. Money is a purely human construct: We made it up. Unlike matter and energy, value (and money) in the marketplace can be created and destroyed.
For example, there may be X billion dollars worth of gold in the world. But the moment some miner digs up some more, that number expands. And, since we as a planet have assigned an inherent value to this particular metal, that new gold creates new value — new money.
The same thing holds true when somebody starts a business. Think about the fluctuation in the paper value of a public company: It goes up and down all the time. This creates or destroys monetary value, constantly.
Once you grasp this idea that there is an endless supply of money in the world, an amazing thing happens: Your entire paradigm about money shifts.
Once you realize that money is infinite, and only has value because we all collectively agree that it does, you realize that money can be created out of thin air. You can start with nothing, and create real value, real wealth.
At the same time, you begin to realize another astounding truth: When you get money, it doesn’t decrease the amount of money available to others. In other words, if you choose to become rich, that does NOT keep somebody else poor.
If you own rental property, and your tenant gives you some rent that increases your wealth, that tenant finds a way to replace that cash (typically through their job). At the same time, through appreciation and principal reduction, you’re building equity in the property. That right there is truly money out of nowhere, and your tenant’s financial condition (past, present, or future) is in no way diminished because of the transaction.
Believe in abundance. Believe in the infinite supply of money (remember, money is made up, by humans). Recognize the fact that your gain does not diminish anybody else.
This is a wealth magnet, and one worth thinking about on a daily basis, particularly for business owners. It will change your perspective and relationship with money. I know it has for me, and I’m in a far better position financially because of it.
What is your attitude towards wealth?
Does that attitude attract or repel money from you?
Your personal attitude towards wealth has a massive impact on your ability to acquire money. If your basic beliefs about money are negative, then it will be difficult for you to actually obtain much of it.
My own beliefs about money used to be quite negative. I spent most of my life thinking that money was scarce, difficult to obtain, and even more difficult to hang onto.
Now, my attitudes toward money are the polar opposite. I now have a much better practical understanding of economics and accounting, and understand that economies are unbounded. I now know that money is infinite, and value in the marketplace doesn’t have to follow the same rules as matter and energy. Value can, and is, created and destroyed at will, since it’s an artificial human construct.
A significant influence on my change in attitude came from the works of Dan Kennedy and his concept of wealth magnets.
Who is Dan Kennedy? And what exactly is a wealth magnet? Well, Dan Kennedy is the “millionaire maker”. He’s one of the single greatest contributing minds to the field of modern marketing that is still alive. He’s written probably two dozen books I’d imagine, has spoken on thousands of stages, and is the man-behind-the-man in numerous fields. If you come from outside the marketing world, you may have never heard of him, but within the marketing world, he’s basically treated like an idol. He is the marketing genius behind the success of many TV infomercial products, the most famous of which is probably Proactiv acne treatments.
Dan Kennedy defines a “wealth magnet” as a habit or personality trait that helps a person to naturally attract opportunities to them. Described in full detail in his excellent book, No B.S. Wealth Attraction in the New Economy, available on Amazon, Kennedy discusses 28 different traits that, when combined, make a person a nearly unstoppable force for success, no matter what their chosen endeavor (not just business — the principles apply in athletics, spirituality, the non-profit world, politics, etc.).
I highly suggest reading the book, and making a personal study of it yourself. Ben Franklin had a list of 13 traits he wished to embody, and spent 1 week working on each of them in turn, and repeated the 13 week cycle for most of his life. Kennedy’s 28 traits would make for a 6 month cycle at one week each, and is probably worthwhile. However, it also fits nicely into a monthly cycle, and my mentor James Orr and I have discussed doing this several times, and repeating the cycle monthly as an exercise.
I’m actually going to embark on such a month-long journey, largely to help ensure that I am in the right mental attitude for an upcoming speaking engagement that happens to be in a month. Each day, I will briefly explain my own viewpoints on the Kennedy Wealth Magnet, and how it applies to the overall concept of Personal Prosperity (I’m not going to replicate Kennedy’s thoughts — seriously, buy the book, it’s worth the $11). Then, I will briefly discuss how it applies to my life right now, how I see it applying to James’ real estate business with what he’s got going on right now, and how you could apply it yourself in more generic terms. Hopefully seeing a day to day application of the principles to real businesses will help you see how you can readily apply the concepts to YOUR life, your business, your goals, your Personal Prosperity Plan™.
I hope you enjoy reading these over the course of the next month, and that doing so contributes to your own personal growth.
We’ve discussed before that one of the keys to success as a real estate investor (be that as a bird dog, wholesaler, or direct investor) is to find motivated sellers. Motivated sellers are the key to just about everything in creative real estate investing: It’s where the entire process of the deal begins.
When we talk about “poor” marketing methods, we’re referring to marketing media that are low on the cost scale, but require a substantial investment of our time. “Lazy” marketing, on the other hand, refers to marketing media that require an investment of money more so than time.
In other words, your choice of marketing media is determined by your time vs money commitment.
It should be noted that both ways can generate calls from motivated sellers. Doing poor marketing doesn’t place you at a disadvantage when trying to find motivated sellers, and may sometimes give you an advantage, depending upon what your local competition is doing. Most real estate investors just starting out are going to do so using poor marketing methods.
James maintains a list of poor marketing methods that you should take a look at. In particular, this list links to each of his individual checklists for how to actually implement that method. There is a wealth of knowledge to be had by looking at these checklists.
Before doing any marketing in your real estate business, check out James’ poor marketing methods for finding motivated sellers. The individual checklists are worth looking at when planning your marketing campaigns even if you’re just getting started in real estate investing, because the checklists will give you an idea of what you need to prepare for going forward.
No matter what marketing methods you use to find motivated sellers, don’t forget the overall goal: Getting people to call you so that you can stay on the right side of the desk. This is a positioning thing for you, and makes you the expert…the authority. This is important for making real estate deals happen, so be sure to maintain this positioning whether you’re using poor or lazy marketing media.
This was one of the first real estate investing books that I ever bought when I got serious about real estate investing. Now that I’m getting back into that industry to take advantage of the real estate market these days, I decided to revisit this book and some of the ideas in it.
This books takes a “get rich slow” view of real estate investing. It is one of the better step-by-step real estate investing books out there. The focus of the book is buying rental properties for cash flow, and the authors, Mike Summey and Roger Dawson, show you how to find motivated sellers, determine the investment value of a property based on it’s Net Operating Income (aka, cash flow), manage your properties, and more.
Because the book is aimed at readers with full time jobs and family obligations, the authors walk you through how to do everything in small bites. For example, to learn about your local market, the book shows you how to meet with real estate agents and obtain and analyze market research data so that you can find particular home types and neighborhoods to invest in, and do it all over the course of several weekends.
All in all, The Weekend Millionaire’s Secrets to Investing in Real Estate is an excellent introduction to anybody just getting started in real estate investing, and it does give you a good portion of the “book learning” you need in order to start working on your first real estate deal. You can purchase the book at most major book retailers, and online via Amazon.
For the things that the book is lacking, such as contracts, property inspection forms, and more in-depth, specialized information, see James Orr’s Real Estate Entrepreneur Courses.
When a new real estate agent joins a brokerage, there are a number of simple things that they are told they should do in order to start building their commission business. The vast majority of agents never actually do those things, which is what makes these methods so powerful for the agents that do. Also, because most agents don’t do them, it creates an opportunity for real estate investors that ARE willing to do the work in order to find investment deals.
This week we’ll be discussing these methods in turn. For today, we’re going to start with one of the most tried and true marketing vehicles ever used in the 5,000+ year history of business: Working your local area, or “farming”.
It’s amazing how many real estate investors forget that there are possible deals right in their own neighborhood. There are motivated sellers on every street in America — you just have to find them. So, doesn’t it make sense to start with you very own street, subdivision, and town?
Farming involves having a well developed plan to make yourself known to people in a specific geographical area, and making contact with these homeowners on a regular basis. When the time comes that they are in the selling mood, you want them to think of you first.
Most of the time, when you’re using farming as a real estate investor in order to find motivated sellers, the marketing message that you are communicating is specific to the fact that you help out homeowners that need to sell quickly. By sending postcards, letters, newsletters, and other direct mail communications to these homeowners on a regular basis (I suggest monthly, at a minimum), you are building what is called “Top of Mind Awareness” with these individuals. The information you are sending them should include:
1. Information about time on market, emphasizing how long it’s going to take them to sell.
2. Invitations to small group seminars you put on about various financial topics.
3. Reminders that you are available to buy their home.
4. Community events, picnics, BBQs, and other social events.
Why would you want to get social with these homeowners? It’s quite simple: People do business with other people that they know, like, and trust. By becoming part of these people’s lives on several different levels, you are building that know/like/trust factor. You will be the person that is at the top of their mind when a situation comes along that dictates that they sell their house as quickly as possible.
How you structure a joint venture deal with another real estate investor, money partner, credit partner, or other joint venture partner has a lot to do with the intended outcome, how you are buying the property, and what your exit strategy is.
When it comes to structuring these kind of transactions, it’s actually a really good idea to consult with an attorney. My mentor, James Orr, has put together a great list of questions to take to your attorney when you are having this consultation. This is a very useful list for making sure you’ve dotted your i’s and crossed your t’s in regard to structuring your joint venture transaction.
To access this tool, go to Attorney Questions For Structuring Joint Venture Transactions.
Lease-options are a powerful way to acquire properties. Not only does a lease-option contract provide you with flexibility in your purchasing arrangements, but also gives exit strategies from the property that you may not otherwise have.
Any sort of seller financing places at least some risk on the seller, and asking a seller to do this sort of transaction takes a certain amount of finesse. Here is how to to ask a seller if they will sell to you on a lease option contract.
Several recent articles and web traffic data released by the major real estate web portals show that web traffic to their websites was up by over 27% from the previous year and several of the top searches on their website were for rent to own, lease option, lease purchase and other forms of owner financing. Unfortunately for the buyers that are looking for these types of creative opportunities to buy not all sellers are offering their properties for sale on a lease-option, lease-purchase, rent-to-own or with owner financing. Even some of the sellers that would actually consider accepting an offer to sell their home using one of these strategies are not listing that as a possibility when marketing their properties for sale and many listing agents are either choosing to ignore this huge market of buyers or are unaware that these creative options exist.
So, how does a buyer that is interested in buying on a lease-option, lease-purchase or with owner financing ask a seller that has otherwise not indicated they would consider such an offer if they would consider it? There is a great book by Jack Canfield and Mark Victor Hansen called The Aladdin Factor that really summarizes in general terms how to find out if a seller would consider selling on a lease-option: you ask. Not all will say yes, but some sellers, when properly educated on the benefits of selling using a creative strategy, may agree that it would be a good option for them that accomplishes their goals when selling their property.
Yes, how you ask matters, but the key is asking if they would consider it. I recommend you find a local real estate agent that is knowledgeable about these types of transactions and by having them represent you as a buyer they can do the asking through the listing agents, but if you plan to call sellers that have properties listed for sale or for rent on websites like CraigsList here’s a brief overview of one way to ask that works.
First, when calling sellers make sure that the property is still available for sale and that it meets you basic criteria. There is little reason to ask if they would consider a creative transaction if the property does not have your minimum number of bedrooms or bathrooms or is outside your price range.
Second, ask about the creative transaction. There are dozens if not hundreds of variations of how you might soften your language when asking, but the key is to ask. You might say, “would you be in a position to lease the property to me for a short period of time before I buy it?” Or maybe, “would you consider a creative offer like a lease-purchase or owner financing?” You might also give them a reason or benefit to them when asking like this example when calling on a for rent ad and asking if they’d consider selling it, “if I make all my lease payments on time would you consider selling the property to me because I am really looking to ultimately buy a home?” You may want to be prepared to talk to the seller about some of the benefits–benefits to them as the seller and not benefits to you–of selling to you this way.
Third, realize that some will and some won’t and there are some basic ways to improve your odds of finding someone more likely to consider it. For example, if you focus on properties that have been for sale for a longer period of time and have not sold, sellers tend to become more open to creative offers when they are trying to sell and they are not getting traditional offers that are acceptable to them. You may also find that it is easier to get someone that is renting their property to agree to sell than it is to get someone that is selling to agree to do a lease before you end up buying the property so you may want to focus on calling properties that are for rent and asking if they would consider selling on a lease-option, lease-purchase or with another form of owner financing.
In conclusion, the key to finding out if a seller would consider selling on a lease-option, or any other creative transaction, is to ask them. Not all with say yes, but with a little softening of your language and some persistence you can find sellers that can see the benefits of working with you. It helps to have a professional real estate agent that can make these calls for you if you don’t feel comfortable or are not willing to make the calls necessary.