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These are not just tips, but tools to help you to go into the business with a plan in place to be successful.  Learning about the pace of the business, the costs of doing business, and getting to the right prospects is critical.

Average Income of a Real Estate Agent

According to the Department of Labor, the median real estate agent’s income in 2004 was $35,670 (median means half above and half below). That’s gross income, out of which all their business expenses had to be paid. The bottom 10% had a gross median income of only $17,600. Even if you’re with a broker that provides an office, phone, business cards and some prospect leads, you’ll still have expenses for your car, personal marketing, client gifts/entertainment and more.

The Competition is Fierce with More Agents Than Ever

With over 1.18 million members of the National Association of Realtors®, and record numbers entering the field each year, it’s imperative that new agents understand their market and the competition. Know your abilities, both business-wise and financially. Learn everything you can about your market and where buyers and sellers come from. Then plan your marketing to capture them at the best value.

Say the words “lease purchase” to many real estate professionals, and you’ll see an immediate drop in their enthusiasm level. What they hear is “no commission now.” That is mostly true, but there are some very good reasons for a real estate agent to help their buyers and sellers with a lease purchase if it meets their needs.

• The up-front non-refundable option payment to the owner/seller can be shared with the real estate agent. You get paid to set it up.
• You lock in a commission on the sale if the tenant exercises the option to purchase.
• You build credibility and loyalty with the seller, as you are helping them to potentially move a problem property.
• Sellers strapped for cash can move in a paying tenant without dumping the property or losing it to foreclosure. Again, you build loyalty with the owner.
• Your cash-poor buyers can stop looking and negotiate a future purchase on a home they love, living in it while they build down payment dollars.
• Buyers with credit problems can lock in their home of choice while they repair their credit.
• If you work with investors, the lease purchase can be one tool in their box for better return on investment.

Obviously, if a home is listed with another agent, you may not be able to negotiate a lease purchase for your buyer, but it could be worth a try. Your buyer will appreciate the effort. On the listing side, you may want to discuss this option at the beginning. Your seller may not be too interested then, but they will remember the discussion months later when the property hasn’t sold. In buyer markets, offering a property with “lease purchase possible” can bring an offer when nothing else does.

Think of it as an investment of your own. Now, you’re not spending money to market for a prospect, and maybe someday a customer. You’re getting paid a little up front to lock in a commission on the other end if a purchase results.

The four main reasons a property doesn’t sell are:

1. condition

2. staging

3. pricing

4. marketing

Part one of ‘Why Listings Expire’ discusses condition, since it is the number one component a home seller can consider to ensure the salability of their home and the ultimate price they receive.

Condition is critical because it colors the prospective buyer’s perception. Buyers are looking for well-cared-for, move-in-ready properties, so a home in excellent condition can leverage price and lower market time. When priced appropriately, condition can ensure a sale even in a less-than-favorable market.

Several items to address before listing your home are common-sense:

1. Clean everything thoroughly. Your home should sparkle. Kitchens and bathrooms should be spotless. De-clutter throughout your home and clear off the counters. Be sure windows are clean and accessible so buyers can see the view.

2. Replace worn, damaged or dated floor coverings. The ‘carpet allowance’ is a thing of the past. Today’s homebuyers don’t want to have to tackle projects before they move in. In addition, the actual cost of new carpet or flooring is usually much less than the reduction buyers would want off your asking price.

3. Remove tired or loud wallpaper. A coat of paint freshens the house and makes it more amenable to anyone’s decor.

4. Replace or repair anything that is broken. The homebuyer wants a home that works and anything that might hint at problems or a lack of upkeep are red flags. A dripping sink, running toilet, or cracked light fixture send a message that the property hasn’t been cared for.

5. Pay attention to curb appeal. First impressions are critical and could even halt a prospective buyer from going inside. Lawn and landscaping should be well-maintained, paths clear and in good repair, front door freshly painted if needed.

A word of caution: not all improvements are created equal. It’s a good idea to consult with your Realtor to identify how best to spend your money on improvements. While many of the items listed above can easily be worth at resale double the amount of money you spend (depending on the home and market conditions), there are some improvements that rarely even pay for themselves. Be careful not to overdo it.

Common mistakes include completely redoing a kitchen, when simply replacing the countertop would have been enough of an update for a sale. Replacing kitchen cabinets or a total update can be expensive and time-consuming, and rarely increases the resale value enough to justify the expense when done solely for the purpose of selling the home. Obviously, broken windows should be fixed or replaced, but don’t replace all of the windows in the house expecting to get back all the money when you sell. The same goes for exterior siding – don’t replace it if the existing siding can be repaired.

Your Realtor can advise you what improvements are worth the money. Many agents have checklists on hand which are available for the asking. Better yet, ask your Realtor to walk through your home and help you prioritize which projects to address and which to leave for a future owner.

Homes in good repair send a message of having been well maintained throughout the seller’s ownership. Many sellers are not willing to go the extra mile to address condition issues, which is good news for those who are. The house in better condition stands out from the competition, increasing the likelihood that it will sell.

Once all condition issues have been resolved, then you can begin to address price.

But after years of learning about real estate and then years of teaching and consulting I have realized that this approach can inhibit your ability to understand how real estate investing works at the most basic, fundamental level.

It is sort of like teaching a kid how to play baseball by saying:

1. Get a hit.
2. Get on Base.
3. Score a Run.

While this is an easy “strategy” for scoring, it leaves the player with no understanding of the fundamental skills necessary to get a hit.

It’s exciting to think about scoring the winning run, or making $50,000 on one real estate deal. However, most people who can do that on a regular basis have been working at their craft, diligently practicing and mastering fundamental skills.

These fundamentals are really the keys that unlock the door to investing success.

Home run king Hank Aaron’s success was in his mastery of the fundamentals of a proper batting swing. That swing gave him the ability to break the most famous record in all of Baseball.
A real estate investor faces the same challenge when trying to “hit a home run” and make big money with real estate.

Like star athletes, you must master the fundamental skills of your craft, and learn to apply those fundamentals to every prospective deal. The bottom line is if you want to be a star in the “game” and make the big money you have to be good at the right things. But strategy based training tends to divert our attention away from the fundamentals.

Back in the early 1990′s I heard Carleton sheets saying that rental property was the way to go. I went to a seminar and heard another guy named Russ Whitney saying that I should be finding houses that were in bad shape and fixing them up.
Then I saw another guy on TV talking about how he got cash back at a closing, and actually made money by buying a house! It certainly seemed that there were plenty of ways to make money in real estate. Still I had what some people refer to as “Analysis Paralysis “.

Today I realize that my ‘analysis paralysis’ was caused by a lack of understanding. The plain fact was that I simply did not know the fundamentals of real estate investing. You might say I knew I needed to ‘get on base’, but I simply did not know how to ‘swing the bat properly’.

After a few months of reading articles, searching real estate websites, buying books and tapes, and going to seminars, I piled in the car and started looking at houses. But every time I looked at a house, I felt confused and unsure about what to do and how to know if this really was a decent investment property. For some reason, I just could not seem to connect all the dots

It seemed like my ‘career’ was going nowhere. I went from one seminar to another hoping that each one would be the one that would clear up all my questions. Finally, out of sheer frustration I decided to get my agent’s license. As a new agent I was required to take some classes on Real Estate Finance.

We learned to calculate net profits on a sale, buyer’s payments, and how to do comparable market analysis. These calculations were not such exciting stuff at the time, but several years later, when I made the jump to become a full time buyer for an investment company, this gave me the ability to adapt to the investment market quickly.

Using my baseball analogy, you might say “I was working on my swing.”
I did not know it at the time, but I was honing those fundamental skills that would later enable me to get involved in bigger deals with higher level investors.

Looking back on all this experience I can’t help but notice that the most successful investors, the ones who are truly financially independent as a result of their real estate activity, are those who have mastered these fundamental skills.

Every property has a value, location and character all its own. Mastering the fundamentals means being able to obtain key pieces of information, and then let that information dictate the investment strategy options based on that information.

The greatest single problem facing most investors in the current market is a lack of adaptability to changing circumstances. I believe that this lack of adaptability is primarily the result of not understanding the fundamentals of Real Estate Economics. It sounds pretty highfalutin’ but all we’re really talking about are the Real Time Market Value, income potential, and costs.

Each property will dictate to you what your best investment options are if you can gather those key pieces of information.

Your starting point is to understand your market well enough to define an average of property values by the square foot – NOT house to house, as with comparable market analysis.

In a stable to improving market as we had from 1995 to 2005, it is easier to avoid mistakes when calculating value. But in a changing market where prices are tending to shift down because demand is changing or slowing, it is essential to be aware of what I call the Real Time Market Value. Learning this fundamental skill is critical for hitting “home runs” with real estate deals.

Fundamental Skill number one: Know Your Real Time Market Value, and use this value to calculate your offer price.

When you pay too much going in, few, if any, strategies will keep you from losing money.

In that regard, there’s a few relatively simple steps to follow that first starts out with a question. Precisely ‘WHY’ do you want to learn how to build a real estate business?

If you come up empty-handed – or worse still, say you just want to get rich quick – then go elsewhere…because the reality is that if you don’t know why, you don’t have enough ‘chutzpah’ to cut it whenever a challenge arises. These types of people when faced with a potential obstacle get easily frustrated, then cut bait and run.

Similarly, anyone looking to jump on the next ‘get rich quick’ bandwagon is an opportunist. And opportunistic minded entrepreneurs never focus on doing one thing great, typically meddle in something for a few days or few weeks at best, then as the next obstacle pops up – or if they haven’t done a deal in 30 days – they throw in the towel and go elsewhere.

So how to build a real estate business that dominates and crushes your competition? It first begins with an understanding of what is a real estate investor, and what investing in real estate really means.

Since there’s no dictionary definition for this one, I’ll give you my interpretation. A Real Estate Investor essentially is a problem solver. This is an individual – or group of individuals – seeking to solve the real estate needs of others, in a courteous, respectable, and enlightened manner. As a result of successfully solving the issues at hand, the real estate investor profits both within their heart and with their wallet.

Typically, the financial rewards of being a real estate investor far exceed those of the average corporate or hourly wages of many. This is a lucrative profession, but when you’re building a real estate business, it requires persistence, confidence in one’s abilities, positive attitude, and ethical practices in order to truly profit in an ongoing basis.

From my corporate background, I recognized there were 6 Pillars of Successful Businesses that all had to be in place in order for someone to succeed. They are:

1) Vision & Planning
2) Specialized Knowledge
3) Applied Strategy
4) Mentorship & Advisors
5) Strategic Partners
6) Systems & Processes

I’m sure this looks daunting to you, yet if you chunk down these 6 Pillars into bite-sized chunks, within two weeks you’ll have the strategic elements in place to go out and dominate in your marketplace. Because in order to build a real estate business that succeeds, and scales exponentially, these elements are critical and imperative to helping you generate a 6 figure bank account and realizing 7 figure gains in as little as 7 months, part time.

If you are thinking about investing in real estate, you should know that you don’t have to do it alone. There are several that are thinking of the same thing as you, but don’t have the proper resources to begin the process. Building partnerships to invest in real estate is one of the great ways to start building an income off of owning land.

One of the benefits of having someone else investing in real estate with you is that it will allow for any missed parts of the process to be covered. This is especially important in the beginning of the process. If you are unsure of different parts to look at with the real estate investing or if you don’t feel like you can cover all of the areas alone, a partner can help in determining what you are missing. Everything from contract work to needing a third person can be handled and put together from missing links. Two heads are always better than one, especially if you are just beginning.

Having a partner to help you with investing can also be beneficial because of organizational needs that will need to be met. Everything from basic paperwork to taxes and even procedures can be better when handled by two people. You will want to make sure that everything that is set for your profits is understood by both and whatever is missed will be picked up by your partner in order to keep the benefits coming in organized.

By having more than one person involved in the investment of real estate properties, you will be able to set your goals, keep standards and move forward in the business. Finding the right person who has the necessary tools will ensure that you will be successful. Having the right help will provide you the ability to continue to expand your business and make plenty of profit from real estate sales.

You have the house, you have the loan, and you have everything set in place. You know that it feels great to have a place to call home. However, there is something that is not fitting quite right. Maybe your home feels like it needs more investment or maybe you want to find a different way to approach your loan. If you are looking at options for improvement, refinancing is the way to turn.

Refinancing is a step that you can take if you want to put in a little extra investment to your home. Whether it is to feel more comfortable or to get more out of your investment when you sell, refinancing is a great option for building up your home investment. Not only will it be good for you to invest more and get more in return, but it can also help you to build credit from the investment.

Usually, refinancing will begin with you applying for a second loan or mortgage. Home equity loans are one way to help with refinancing your home. There are also lines of credit and other considerations that you can make in order to get some extra money into your home. The advantage of this is that when you go to sell your home, you will be able to value the price higher than it would have been with just the regular loan.

If you are deciding on whether to refinance your home, you will want to consider several parts of the refinancing. First, you will want to make sure that you are not taking your home out of the market. You can determine this by researching to see what the market value of the area is and how this relates to your home. If you are using a refinancing loan in order to consolidate bills or improve your credit, make sure that your finances are stable enough to allow you to pay off the refinancing loan.

If you begin to refinance at the right time and with the right idea in mind, you can benefit off of a second mortgage and with some home improvement. Polishing the floors and removing the old to put in the new can be beneficial not only for your check book, but also for your future.

If you are like most, you know that it would be beneficial to just have money handed over your way. You work hard at what you do and are financially stable. You know that it is time for you to move into a new place and want to make sure that you have the best opportunities available for you. The first investigation to make in order to step forward is through a loan pre-qualification.

Loan pre-qualifications will determine if you have the financial ability to invest in real estate in the beginning. By having the right pre-qualification, you can be guaranteed a specific amount of money and will have the ability to move into the home of your dreams.

The first thing that is determined with loan pre-qualification is how much you make each year from your job. By finding this, it will allow for lenders to know how much you will be able to put into a loan in relation to other expenses that you may have. Things such as personal debt and car loans, as well as credit card expenses will be calculated in this figure to show the first step to finding the right loan.

After these specific points have been added up, the time frame in which you will pay your loans will be factored in. This will give the companies an idea of how much you can pay and how this will relate to the debt and finances that you have coming in and out of your pocket. This will be defined by using formulas that will relate how much money you are making in relation to how much you can pay to balance out your loan. Usually, pre-qualification formulas will divide things by factoring in ratios for standards of living.

If you want to make sure that you have the right loan, then becoming pre-qualified is the first step that you will need to take. This will enable you to move forward with what you want and need for your loan. By knowing what to expect, you can prepare for the process of getting a loan and can move into the property that you want.