I was brainstorming to find money to get my current project off the ground. Where do you find money that isn't being utilized and invested to it's highest and best use? Here are a few ideas that I thought of this morning:
1. savings accounts
2. money market accounts
3. certificate of deposits (cd)
4. stock market accounts/portfolios
5. bonds
6. mutual funds
7. home equity lines of credit (heloc)
8. whole life insurance policies
9. retirement accounts (401k, roth, sep, self-directed ira, etc.)
10. seasoned llc's (lines of credit)
11. commercial lines of credit
12. bridge loans
13. home-improvement loans
14. "hard" money
15. venture capitalists and angels
16. non-profit organizations (assets=collateral)
The next questions is how to get access to these sources of money. Who has the access?
1. friends
2. neighbors
3. past clients
4. previous/current investors
5. current investment owners
6. business owners (of successful businesses)
7. referrals
8. employees/employer/coworkers
And what do they need to feel secure enough to lend that money?
1. promissory note
2. trust deed
3. great deal (low risk)
4. personal guarantee
5. sufficient return on investment
6. reasonable time-frame (short)
7. control/ownership
8. confidence in your ability to perform
Tuesday, October 14, 2008
Friday, October 10, 2008
IRAs Not Safe in the Stock Market! 2 Trillion Lost in Last 15 Months!
Trillions of dollars have been lost in the stock market over the past few months! It seems that trusting someone else with your hard earned retirement money is not the best move, although there was a boom just a few years ago. This recent story shows what has happened over the past year to most peoples retirement accounts:
So how do you protect your nest egg, how do you guarantee that it will still be there when it's time to retire? The answer is to take resposibility for it and put it where you're sure it will grow. I've been introduced to a copmany that allows a true self-directed IRA account. This company is Entrust Arizona. They allow you to move your current IRAs into their IRA plans. By doing that you gain 100% control and 100% responsibility for your retirement funds.
Once you're in control you have unlimited options for investing. You can invest in real estate, provide personal lending, private lending, promissory notes, gold & silver, etc. My personal favorite in income producing properties! Not only does your account benefit from the positive cash-flow but your purchased asset will be paid for by the tenants, your property will appreciate in value and it all grows tax-deferred without worry or need of the 1031 tax deferred exchange! This is an amazing and powerful opportunity to take control of your retirement and guarantee that it will continue to grow!
Thursday, October 2, 2008
Carry On
It's easy to fight when everything's right,
When you're mad with the thrill and glory.
It's easy to cheer when victory is near
And wallow in fields that are gory.
It's a different song when everything's wrong,
When you're feeling infernally mortal.
When it's ten against one and hope there is none,
Buck up little soldier and chortle,
Carry on, carry on! There isn't much punch in your blow
You're glaring and staring and hitting out blind,
You're muddy and bloody but never you mind,
Carry on, Carry on. You haven't the ghost of a show.
It's looking like death, but while you've a breath,
Carry on, my son, carry on.
(Robert W. Service quoted by Brian Tracy, "Success is a Journey", p.103-4)
I have been feeling a bit frustrated with the people I've been talking to lately about investing in my projects. Life would be easy if we were in the lending frenzy of 2 years ago but things are not like that now. So putting money together for a project has become the most challenging part of the task. Right now I have a project that shows an estimated profit of about $100,000. I need about $50,000 for the initial investment (and cost to change), property's current value is $380,000 and the future value is $540,000. The worst case scenario is that we hold this property long-term with a positive cash-flow. But everyone is so scared of the market that they are not thinking clearly anymore.
I have additional projects that could move forward if the financing was there but this is one of those moments when things look bleak (feeling infernally mortal). But I'll keep pushing forward. There are level headed investors who'll recognize a good deal when they see it and I'll still make these projects work.
Wednesday, October 1, 2008
Embarking on a New Endeavor
"Whenever you embark on any new endeavor, you will be beset by countless little problems, details, unexpected irritations, difficult and dishonest people of all kinds. They go with the territory. They are an unavoidable part of the price you have to pay to accomplish anything new or worthwhile." (Brian Tracy, "Success is a Journey", p.84)
It seems to me that whenever you start a new project or begin a new idea there is a learning curve, a discovery of things you never knew you never knew. The little problems and details come up because, at the start, you are unprepared for the situation. But life teaches you what you need to know, if you are willing to learn from the experiences. Most of the people I have dealt with so far, are unwilling to learn and falsely believe that everything should just work for them (maybe because they are somehow special). But once you learn that thing you are prepared to work through or deal with those issues.
Dishonesty is just something you have to deal with and be prepared for. I believe that most people are honest, or trying to be so. There are, however, enough people who allow themselves to be dishonest that you have to be prepared for the situation. When we are preparing for a project we get at least 3 bids. The lowest and the highest bids are often filled with problems. The lowest bid provides a number, better than the rest, but then you find all the hidden charges on the back-end. The highest number just builds those back-end cost up front. So the middle bid is usually the most honest bid.
In spite of the problems of starting something new or worthwhile, it is still worth it. We don't abandon ship just because there is a storm or something unpleasant. We learn how to deal with the problem or learn how to avoid the problem in the future. But we must learn to press on and make our visions of the future a reality.
Tuesday, September 30, 2008
New Source for Leads
Where do you go to find buyer leads. Sellers are announcing themselves all over the place but buyers seem to fly under the radar. But I've been discovering the secret hiding places of some of these potential buyers...
Construction Companies...quite often these companies have people who want to build a home and are looking for the right piece of ground to build on. The right construction company may be a source of many lot purchase leads.
Sub Contractors...everybody knows somebody who wants to buy or sell real property and if you have a good relationship with the sub contractors they can lead you to many prospects. This is especially true when the prospect wants to build a home and the sub contractor will get the opportunity to do their trade in the project.
Construction Lenders...obviously these people know who's applying to build a home. Most of the time these people already have a lot, a house plan and a builder for their home. But there are a few instances when people will actually start the process with the lender.
Remodelers...what about the person who gets a remodel bid and it is just more than their budget will allow? Quite frequently the answer to this dilemma is to buy a different house and sell the one they are in. 2 leads instead of one. And the contractor already has the bids for the work to be done if the property was to be purchased as an investment (and later resold with a listing agreement).
The Actual Project...if you're working on a project that needs work, maybe the best source of buyers are the contractors and sub-contractors who would be working on the project. These people will make the money for the work they would have done anyway and they make the additional profit by enhancing the property value. Then they need to sell the property (which means listing agreement) and attracting new potential buyers and investors.
I've discovered that the local Home Builder's Association is a great source of leads for an investing realtor. They know their work, they get paid for it, may be the buyer/investor, and a listing source in the future! It's time to develop a working relationship with the local contractors. You will provide them additional work and they will be/produce buyers and sellers. What a win-win opportunity.
Monday, September 29, 2008
The First Step
"I learned later that every successful enterprise, great or small, begins with a leap of faith, a driving into the dark, into the unknown. Nature is kind to us in that she never lets us see to far ahead. If we really knew all the difficulties, disappointments, temporary failures, and heartaches we would experience, most of us would not start out at all. This applies to new businesses, careers, marriage, having children--and almost every other human endeavor."
(Brian Tracy, "Success is a Journey", p. 24)
Friday, September 26, 2008
Don't Quit
When things go wrong, as they sometimes will,
When the road you're trudging seems all uphill,
When funds are low and the debts are high,
And you want to smile, but you have to sigh,
When care is pressing you down a bit,
Rest, if you must, but don't you quit.
Life is queer with its twists and turns,
As every one of us sometimes learns,
And many a failure turns about,
When he might have won had he stuck it out;
Don't give up though the pace seems slow,
You may succeed with another blow.
Success is failure turned inside out,
The silver tint of the clouds of doubt,
And you never can tell how close you are,
It may be near when it seems so far;
So stick to the fight when you're hardest hit,
It's when things seem worst that you must not quit
--Author Unknown
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