“Nothing in life has any meaning, except the meaning you give.”
This is one of the top lessons I’ve learned in life. If you’ve never heard this before, take it to heart and it’ll serve you well. Do you know that there are cultures that celebrate death? Death is seen simply as a transition to bigger and better things. Crying is seen as selfish, as a way of holding the dead back from moving on. Very different from our culture, but just another way of looking at the same event. When you’re liberated enough to give things your own meanings, you might as well train yourself to make them positive.
I’m going to share with you ten specific strategies to ride a downturn and go beyond it. But without the right attitude and mindset, those strategies will not work as well. You must give current events a positive meaning. This will position your mind to devise better coping mechanisms. What you think and how you think matters. You’ve heard that thoughts are things. Everything is created twice, once in your mind and then in reality. You are what you’re habitually thinking. Therefore, excellence is a habit!
Don’t buy into all the doom & gloom stories from the media. Learn how to profit from them. Many investors continue to be very successful in the real estate business by following the philosophy DON'T BE AFRAID TO BE A "PURPLE SNOWFLAKE." So try these strategies. You can make a great deal of money in a down market if you stand out, show that you are unique, and most importantly, set yourself apart from your competition by being “a purple snowflake!”
Strategy #1: Ride the downturn - Don't sell
Yes, don’t sell. Good times or bad, my advice is always to hold on to a house if you can. Your wealth will come from holding on to real estate, not selling it. How serious is the problem really?
Let's say that the home you live in, your rental property, or the property you bought as a "fix and flip" goes down in value. Well, if you weren't planning to sell right away, would it matter? Hang on until the market comes back. Look at the historical records of the property value where you live and that’ll reassure you. I looked at the last 100 years of property value in the greater Tampa Bay area (where I live) and it’s almost magical – there have been dips and there are flat periods, but the property values have doubled every twelve to fifteen years on average. RealtyTrac or First American Data Solutions provides these data, or you can ask your local real estate professional for help. Historically, a real estate market will always come back.
I know one investor in my town who sold his inventory of a few single family homes earlier this year and promised he’d never buy another investment property ever again. He rented most of these properties for a positive cash flow. A couple of them were breakeven. The market turned south at the end of last year and suddenly he was upside down on some of the houses. He panicked and sold all of them. In some cases, he actually needed to come up with money to close the deal.
I didn't understand why he felt the need to sell. On the whole he still had a positive cash flow. By selling, he guaranteed the loss. Someone bought his properties (I wish it had been me) and they are going to wait out the downturn to take advantage of the upswing. Why couldn't he have done the same thing?
It’s simple: he was afraid that the market would get worse. That’s the meaning he gave to the down market. He was afraid that his tenants might move out, and even though there are generally more renters when a market turns down, he was afraid he couldn't get more tenants. He made his decision out of fear.
The market has been running hot in many areas and is actually overheated in others. Tampa is one of those. I’m refinancing instead of selling and raising more cash through banks and private lenders in case the market turns down further and I need to wait for it to settle. I also want to make sure I have plenty of options when the deals start showing up. But I’m not panicking and selling. If I sell, it’s to get rid of a bad apple and it’ll be planned.
Strategy #2: Run your investments like a business
Are you running a business or did you just get lucky and acquire a bunch of properties?
Are you one of those people who bought a few pre-construction deals and made a whole bunch of money? The doomsayers who say the end is coming for real estate are often people who've gotten lucky. They're now afraid that they can never recreate that wealth, and so they're just plain afraid of everything. They realize, on some level, they had nothing to do with the wealth they've gained, and live in fear of losing it.
I’ve made millions and I’ve lost millions. When I first made money in the stock market I didn’t have any understanding of the fundamentals. I just gave my portfolio to my brokerage company and they managed it. I didn’t have any control or understanding of how any of it worked. When I lost it, I really panicked, because I couldn’t recreate it. I had nothing to do with creating it in the first place, so I wouldn’t even know where to begin to rebuild.
I promised myself that next time, I’ll take full control of my money and never do anything I didn’t understand. You can take all of houses away and blindfold me and drop me in any city USA, and I’ll recreate my wealth a lot faster than I did the first time. Having strong business skills means you have the ability to look at any market in any climate and figure out what to do next without panicking.
Remember that real estate is nothing more than a product. If you're good at a business and know how to thoroughly research a product and its market, you can sell hammocks or you can sell a house. The fundamentals of selling are all the same.
Of course, not too many people rent hammocks and hammocks don't appreciate. That's why real estate is such an easy business for so many people to jump into. That's also why there are so many catastrophic failures. Real estate can be one of the most forgiving businesses in the world when the market is going hot. Even bad investors can get wealthy without having to know or apply the fundamentals of business.
One of these fundamentals is to look for a way to create more value in what you're selling. Remember that regardless of whether you're renting a property, lease optioning it, doing a rent-to-own, or straight out selling--you're selling something. And, if no one is buying (or renting), ask yourself why. Is there a way to add more value by making it more desirable for the buyer/renter?
Some ideas might include changing the property--adding additional features that no one else has or making more favorable terms for a potential buyer. This is the time to be creative, and don’t be afraid to be a “Purple Snowflake.”
No matter what type of business or investments you have, you need to have fundamental skills. One of the biggest benefits of investing in real estate is all the great tax breaks. And you'll get them no matter what happens with the market. Of course, I don't want you to do anything just for the write-offs. You have to make money, too. At least in the long run.
Are you sure you're getting all the tax benefits for your investments? How about your business structures? Are they set up correctly, and are you operating them in the best way possible? And, probably the biggest problem facing real estate investors: are you accounting for your real estate correctly? If you don't do the accounting right, you're going to miss the write-offs.
Remember, you can make money in real estate regardless of which way the market goes. The key is to have good business skills first.
Strategy #3: Invest in Your Education By Attending Courses and Seminars
During slow times, tool up. It’s not going to be like this forever. Get yourself ready for the next go-round. Use any extra time to further your continuing education. Take courses in not just real estate topics (e.g. short sale, probate, foreclosure, etc.), but also general business skills like management and accounting. Attend real estate conferences so you can learn and network.
Strategy # 4: Use the Internet to Expand Your Horizon
Join Groups Online. You can invite new people to learn about what you do. If you’ve never explored online, it’ll open up a whole new world that you never knew existed.
Go to www.meetup.com and start your own group. You can call it "Investors Group of _______.” It will attract investors who you could not contact on your own.
Join discussion boards, and post anything you want to share.
Use Technology Tools. PLANT seeds TODAY - you will HARVEST later!
You should tell everyone what you do! It's called SHAMELESS SELF PROMOTION - and it works!
Send broadcast e-mails to your buyer’s list, investor list, etc. to promote what you have that would benefit them.
Use BLOGS and podcasts. Active Rain has a great site for blogs.
Add video and audio programs to your web site and on YouTube.
Hyperlink yourself with other professionals. Join Linkedin.com
Use Skype. Skype is a phone system to make free calls to other Skype members all over the world. Additionally, if you have a camera on your computer, you and the person you’re calling are able to see each other. You can also use this service to do conference calls with your online fellow investors. The best part is, it’s FREE! What a great way to personalize a phone call!
Strategy # 5: Write Articles or a Newsletter
Real estate articles & information could pave the road to your success. They can greatly increase the chance of your investment business getting noticed by your prospects.
Write articles or a newsletterof useful tips on market conditions. You can send them to current and past clients and ASK for referrals and for their BUSINESS.
There is a little-known marketing secret that is used by PR professionals in order to explode their on-line and offline businesses. If you are a real estate investor entrepreneur, you could, of course, hire a marketing firm in order to exploit this type of marketing. However, there is a way to make use of this secret without spending thousands up front: real estate articles.
Articles can bring business literally to your doorstep. When most entrepreneurs think of marketing, they think of paid advertisements in newspapers and other media. While there is nothing wrong with paid ads, a free and informational real estate investment article or two is a fun, easy, and rewarding way to get even more effective marketing – often at no cost.
Providing free real estate articles on investing techniques or certain types of property investments work well for several reasons.
People pay more attention to articles than paid ads. Have you seen the multipage ads in magazines disguised as articles? All your customers, including your potential homebuyers or investing clients, are bombarded with ads each day. They often appreciate – and are willing to spend time on – reading an article on property investing that gives them useful information without using the hard sell.
Become an instant expert. Providing property investing information in the form of free real estate articles can establish you as an expert. By publishing a real estate article – or a series of several on a particular topic – you can easily position yourself as an expert to the media. In some cases, a reporter or media professional may contact you for a story. The fact is, investment-related articles can easily lead to more marketing and more exposure.
Want more income? Real estate articles can themselves pay. Depending on where your real estate article appears, you may get money for your work. You can also publish your article on your website, where its keywords can attract more traffic to your business. You can even gather several articles together into a book or even easier – an ebook.
I know what you’re thinking – easy for you to say, but I don’t know how to write, and what if they steal my ideas?
My own fear was not about being stolen from, but of writing. I always considered myself a good speaker, but when it came to writing, it all came to a screeching halt.
Well, I started writing as I spoke and viola! I became a writer and so can you, if you can speak reasonably well. Write simply, the way you would speak to a client. Explain everything in simple terms and share the ideas that are important to you.
There’s no need to worry about someone stealing your article ideas either. A quick search online will likely show you that just about every real estate topic has already been written on. It is very unlikely that your article will contain information that no one in the business has ever heard before.
The purpose of your writing is not to come up with your own original theory of relativity, it’s to express your ideas on real estate investing - what’s working and not working, and that’ll get you noticed. If, even better, your real estate articles contain fresh new information and are presented in an interesting way, it is very possible that your innovation will mean more attention and more marketing opportunities for you.
With so many advantages to writing, start developing and distributing free real estate articles today. Write about what you know best and consider submitting your piece to a newspaper and/or magazine that publishes similar articles. Or consider posting your article in an online article directory. Just remember to include some information about your business (not a blatant sales promotion), so that your piece can lead the profit to you!
Strategy # 6: Give Speeches
Now that you’ve written, it’s time to speak! I know public speaking is the number one fear (ranked higher than death). Get out of your comfort zone and give speeches about your real estate investing business at REIA clubs, Chamber of Commerce, or Local Board Functions and tell them why this is a great time to be in real estate. Once you’ve written articles and ebooks, they’ll introduce you as an author (instant credibility).
Strategy # 7: Start Your Own Local Investor’s Club
You’ve written and you’ve spoken, now it’s time to create your own platform to do it on a regular basis. Start your own REIA (Real Estate Investors’ Association) group and hold weekly or monthly meetings. It doesn’t have to be formal, just get-togethers at local diners with a few folks who you know personally.
A good friend of mine, Larry Harbolt, started a meeting at a local Perkins with four other friends that grew to be a regular 100+ people Monday night meeting that launched Larry’s career as a professional speaker and real estate coach. I used to attend these on a regular basis and I’m very grateful to Larry for starting the support group, because I needed it very much during my early career. The meetings still go on and I go there if I’m in town.
I have another friend who started what is now one of the most successful for-profit REIA groups (www.TBREIA.com). He’s so successful that he’s now one of the most sought-after consultants in the industry. Instead of investing in real estate, his primary business became providing information to the local real estate community. He and his partner have helped hundreds of investors get started in this business, which in turn helped them become financially secure.
There are many ancillary benefits of starting your own REIA club. All you need to get started is a genuine caring attitude, like my friends above. You can even start an online group and then meet locally (see www.meetup.com above). And don’t forget to attend all the regular REIA meetings that are happening all around town. This is a perfect time to build your business network and to reconnect with members that you have not talked with in a while.
Strategy # 8: Find your niche and create your USP
I once attended a seminar called, “Specialize or Die.” In this day and age when information is practically doubling every 5 to 10 years, it’s impossible to know everything about a subject. Become a specialist with a small niche. There is a saying, “Riches are in the Niches.”Advertise that you are unique in your specialties (i.e., short sales, luxury investment properties, lease options, pre-foreclosures, international properties, REOs, etc.). My specialty is finding eager and qualified buyers.
Strategy # 9: Read, Endorse and Give People How-to Books as Gifts.
Endorse the books you love and send them to clients and others as gifts---add a personal note.
I endorse “The World is Flat,” “Never Eat Alone,” and all the books and real estate resources you can find at the Winner’s Circle website (WinnersCircleResources.com). Most people don’t throw books out. So it is a great advertisement that usually ends up on coffee tables or in personal libraries.
Strategy # 10: Become a Professional Networker
Success in any field, but especially in business, is about working with people, not against them. No tabulation of dollars and cents can account for one immutable fact: business is a human enterprise, driven and determined by people.
Reach out to people as a way to make a difference in their lives, as well as a way to explore and learn and enrich your own. Like anything else, if you’d like to learn about "networking" then invest some time and read some of the best books on networking. Don’t just “network” – connect with people. Share your knowledge and resources, time and energy, friends and associates, and empathy and compassion in a continual effort to provide value to others, while coincidentally increasing your own. Like business itself, being a connector is not about managing transactions, but of managing relationships.
I wanted to network with other real estate gurus in my industry and I couldn’t find what I was looking for. That’s why my partner Dave VanHoose and I started “The Winner’s Circle” (www.TheWinnersCircleInc.com). Now many of today’s top real estate gurus come there to network and learn from each other.I learned that real networking was about finding ways to make other people more successful. It was about working hard to give more than you get.
Thanks again for reading my tips on surviving these harsh times!
Once again, use this link to download your own 70 PAGE, FREE special report — the full survival guide! — www.2008SurvivalGuide.com
To your health and prosperity, Wajed (Roger) Salam Mentor@HomelandGroup.com 813-637-9797 x11 www.RogerSalam.com