So, You Want to Quit Your Day Job? Consider Real Estate Investing

Posted on May 31st, 2006 in Real Estate Investments by Administrator

The thought of quitting a job and living off of rental income properties is merely a dream for many people. But it’s exactly the lifestyle that Matthew Martinez has achieved.

He’s basically just like many. He worked hard for a good salary but dreamed of being his own boss. &#9

“There is a way that you can substitute your income from your day job with rental income,” says Martinez. &#9

Now, he’s finally working for himself and investing in real estate as a means to support his lifestyle. &#9

In his new book, “2 Years to a Million in Real Estate,” due out June 1, Martinez tells readers how he fast-tracked his way to become a real estate investor. Here are a few tips to get you started.

Keep Working Your Day Job &#9

Martinez says the best way to build your security and investments is to continue to work your nine-to-five job and invest in rental properties in your off-hours until there is a stable enough income to quit.

“It took me two years to do this. It might take less time for other individuals who can ramp up more quickly, it might take longer [for others],” says Martinez.

He recommends this for obvious reasons such as maintaining lifestyle, paying bills, and supporting family. But Martinez says keeping a steady income from a job also helps with securing loans.

“When you obtain financing for your properties you need to show that you’ve got income, right? And also, when you leave your day job you need to show that you’ve been investing in real estate for probably about two years. Banks will be hesitant to loan to you if you haven’t been in the rental business for at least two years.” says Martinez.

Martinez spent most evenings working on his investments. He attended landlord groups, read real estate investing books, took courses, met with real estate brokers, did his due diligence on rental properties, and sought investment mentors to help him quickly understand how to successfully turn rentals into a replacement salary for his day job.

Buy Only Rental Properties with Positive Cash Flow &#9

You may have heard that it’s okay to feed a rental property. In other words, some say that you should purchase rental property even if you have to pay a little to subsidize the mortgage. Martinez says that’s not the way to do it.

“You can’t buy properties that lose money every month. If you do that you won’t survive in this business. The name of the game is to find those right properties that actually make you money, not the properties that lose money,” he said.

He points out that as the real estate market changes investors might not be able to count on the appreciation being as high as it has been in the past, “So you really have to count on the cash flow.” Martinez says that way you’ll be able to buy more properties sooner.

“If you need to pull money out of your wallet or your purse to float that property, it’ll eventually strangle you and you won’t be able to move forward,” says Martinez.

Create a Support Team that Helps You &#9

“You can’t do this alone. You can’t be successful if you do this in a vacuum. You need people to help you and you need the right people,” says Martinez.

He recommends putting together a team consisting of: an attorney specializing in real estate law or tenant law, a real estate agent, tax accountant, mentors from real estate clubs, colleagues who are growing along with you, mortgage brokers, other industry vendors, and property managers.

“The difference between a landlord and an investor is the following: if you buy a property and you manage that property day-to-day and you’re receiving phones calls at three in the morning about clogged toilets, then I call that a landlord. If you buy a property, you put up the financing, you organize the property, you close on the property, and you put a property manager in place and you manage a property manager, I call that an investor,” says Martinez.

He says becoming a real estate investor should be the goal for everyone who eventually wants to replace their day job salary with rental income salary. Being a landlord takes up too much of your time and is a distraction from “buying and looking for the next big deal,” says Martinez.

As you get more properties, Martinez says the best time to quit your day job is once all of your rentals are stable and securely producing a stream of income revenue.

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  • Written by Phoebe Chongchua
    May 22, 2006 


    Wondering What Your Home Is Worth? Want Free Home Listings Via Email? — Let me show you.

    Indianapolis listed as a place to buy investments

    Posted on May 31st, 2006 in Real Estate Investments by Administrator

    Here is further proof of real estate investing in Indianapolis.

    Advice to Investors: Look to Affordable “Linear” Real Estate Markets

    A new statistical study on real estate cycles suggests that smart investors in 2006 should consider markets that were bypassed by the housing price boom of 2000-2005, and that have affordable home costs but are experiencing solid employment growth.

    The study, conducted by Dr. Christopher Cagan, research and analytics director for First American Real Estate Solutions, an affiliate of giant First American Corp., classifies metropolitan housing markets into several types:

    * “Linear” markets, where prices over time tend to move up slowly — a few percentage points a year — and have slow, steady economic growth. Examples include Atlanta, Nashville, Wichita, St. Louis and Indianapolis.

    * “Cyclic” markets that run through boom and correction cycles of 10 to 15 year durations, where prices rise rapidly, and then cool or even retreat. Most of these are located along the coasts and have little land available for new construction. Examples include San Francisco Bay, southern California in general, Miami, Houston and New York City.

    * “Hybrid” markets that sometimes behave in a slow-but-steady growth “linear” pattern, but occasionally go into faster growth cyclical behavior. Cagan considers Chicago, Seattle and Dallas to be in this category.

    * “Catch on” markets that traditionally behaved in a slow-growth linear manner, but that more recently have “experienced a strong move in prices up or down, in a departure from their long-term character.” Cagan includes Las Vegas, Phoenix and Detroit in this category.

    The study used publicly-available housing price data from 1988 to 2005, and applied proprietary analytical modeling techniques to classify metropolitan areas. The study offers no specific investment advice, but in an executive summary, Cagan comments that “markets in areas where prices have not yet risen rapidly,” and where “affordability and job availability are high and economic conditions are strong may offer the best opportunities for investment during 2006.”

    By implication, “cyclic” markets that have peaked out may offer few opportunities — at least for the short term. Those markets are easy to spot, even from daily headlines: Most of the coastal California areas, along with Washington D.C., Florida, New York and New England are in slowdown mode at the moment. And according to Dr. Cagan’s analysis, are poised for further slowdowns.

    Cagan focuses on Texas metro areas — Amarillo, Austin, Beaumont, Corpus Christi, Dallas, El Paso, Houston and San Antonio — as “linear” markets that may well be poised for growth in real estate values. Texas is benefiting economically from high energy costs, and with its moderate house prices and generally attractive business climate, could well attract investors who see their opportunities restricted in some of the high-cost, highly-cyclical East and West coast markets.

    Cagan lists “linear” markets beyond Texas and notes that they have not yet “tested their affordability limits” — that is, home prices still have plenty of room to grow if local economies expand — and are “not likely to be vulnerable to a downturn of magnitude.”

    Besides the major moderate-cost, moderate-risk areas mentioned above, Cagan also lists following among linear markets where investors might take a look this year: Denver, Davenport, DesMoines, Baton Rouge, Kansas City, Charlotte, Cincinnati, Oklahoma City, Pittsburgh, Memphis and Milwaukee.

    (You can access the full report here)

    Related Articles: # Bond Market Jump Signals Higher Mortgage Rates Ahead # New NAR Study: Tax Law Changes, Demographics Fueling Second Home Boom

    Written by Kenneth R. Harney May 22, 2006

    Wondering What Your Home Is Worth? Want Free Home Listings Via Email? — Let me show you.

    Apartment Investors Dilemma

    Posted on May 31st, 2006 in Real Estate Investments by Administrator

    Increased interest rates have created an interesting dilemma for the potential real estate investor — especially in the area of apartment investments. Is now the time to buy, or not?

    On one hand as interest rates go up it makes it more difficult for investors to make deals pencil. On the other hand, most investors know that in some key states populations are growing resulting short-term shortage of housing. (see my article #183, “What Makes Investing In Real Estate a Valuable Proposition” for additional information on this.)

    In markets with this housing shortage, rents will be forced up as the shortage looms ahead. The increased demand for rental housing will come from three major places: 1.) the increase in students graduating from colleges (the echo-boom or baby boomers kids), 2.) the increase in immigration and the growth of immigrants families, and 3.) as interest rates increase a few people will lose their homes to foreclosure. These foreclosures most likely would result from having purchased homes with no money down, and/or made interest-only payments, and not having the ability to pay increased mortgage rates.

    This press release from RealtyTrac illustrates this point.

    In addition, the cost of construction is soaring in many markets. Land close to economic (city) cores has become very expensive. In Portland, the Urban Growth Boundary has created an artificial shortage of land and made it more attractive to build condominiums. This has generated a condominium boom. This new construction boom has also encouraged developers to buy apartment buildings and convert them into condominiums.

    These key items could encourage buyers to make risky purchases of apartment investments by gambling that significant increases in rent (due to apartment supply shortages) will offset increases in interest rates and any negative cash flow concerns. The pressure on interest rates will force employees to look for higher paying jobs, or push for significant pay increases to keep up with rent increases.

    What does the future bring?

    If there is overbuilding of condominiums, the overage will be converted to apartments/rentals, albeit at high rental prices, until the market turns. There will also be a demand for apartments at median income levels, and an increase in foreclosures of homes and condominiums that will start as a trickle and increase in flow if interest increases exceed one percentage point in 2006.

    Again the dilemma is to buy or not to buy. I say buy — but very carefully and do not over-leverage. If you have it, put more money down. Rents will increase. New apartments built with unsubsidized money will be more expensive to rent than renovated apartments built 30 years ago.

    On a recent trip to Israel, we were trapped on a road at the Dead Sea in a flash flood. There I meet an Israeli real estate investor who reminded me to look at the big picture. He suggested that the current birth rate drives future apartment development, and he also pointed out the very low birth rates in Europe, Eastern Europe, Australia, Canada, USA, Singapore, Japan, Korea, China and Singapore versus higher birth rates in the rest of the world. There are two ways to look at this:

  • Those countries with low birth rates will have less demand for apartments

  • Immigrants from high-birthrate countries will overwhelm those low birth countries and create a demand for housing similar to what has happened over the past 10 years in the USA. This means that immigration policy is critical to the long-term success of real estate investments.
  • Written by Clifford A. Hockley
    May 23, 2006 


    Wondering What Your Home Is Worth? Want Free Home Listings Via Email? — Let me show you.

    Technorati Tags: listings, real, estate, homes, condominiums

    Vine Street rehab only days to completion

    Posted on May 31st, 2006 in Vine Street Duplex Rehab Project by Administrator

    I am having problems with my blogging software and the photos I have been trying to upload.

    So here is a link to all the photos I have taken.

    CArpet was laid today and will be finished up in the next day or so. CAbinets should be done, target date for completion is Thursday or Friday of this week.

    http://pictures.zionsvillehomesonline.com/index.php?cat=7

    And here is pictures of just the current work being done:

    http://pictures.zionsvillehomesonline.com/thumbnails.php?album=16

    As the owner of over $5 million worth of quality real estate investments in the Indianapolis and the surrounding area, the Crager-Bartels Real Estate Team knows what it takes to own, rehab, purchase, and sell investment properties. Looking to invest in something other then the stock market? Let us sit down with you and discuss your real estate investing options. Check out pictures of some of the real estate we own at http://pictures.zionsvillehomesonline.com

    Technorati Tags: real estate investing, real, estate, homes, rehab

    Updated Vine Street Photos for May 22, 2006

    Posted on May 26th, 2006 in Uncategorized by Administrator

    Here we go, less then 2 weeks left to go. Since we decided to do tile in the kitchen, and all bathrooms, that set us back an additional week or so

    Additional pictures

    Posted on May 23rd, 2006 in Vine Street Duplex Rehab Project by Administrator

    Pictures of Vine Street rehab updated 5-15-2006

    Posted on May 16th, 2006 in Vine Street Duplex Rehab Project by Administrator

    Here you go…

    less then 2 weeks to completion.

    Promoting with Search Engines

    Posted on May 16th, 2006 in Real Estate Agent News by Administrator
    Search engines are web sites that keep indexes of other sites on
    the Internet. Because you sell real estate, Internet users can
    find your site by entering the keywords “real estate” (or
    something similar) into a search engine, then clicking the link
    from a results page that the search engine creates.
    At least theoretically, this is a simple concept.  However,
    as you’ll see below, getting people to easily find your web site
    using a search engine can be a difficult task.  Still, it’s
    something you should devote time to, because search engines are
    your best source of customers from outside your area, who don’t
    otherwise know about you or your business.
    THIS WEEK’S TOPICS
    ————————————–
    BUT Remember:  “Live By The Search Engines, Die By The Search
       Engines”
    Step 1:  Build and Optimize Your Web Site For Search Engine
       Submission
    Step 2:  Choose Your Site Keywords VERY Carefully
    To Be Continued…
    Task of the Week
    ————————————–
    BUT Remember:  “Live By The Search Engines, Die By The Search
    Engines”
    ————————————–
    Before discussing the topic of search engines, it is important
    for you to realize that the majority of “real prospects” to your
    web site will NOT come from Internet search engines.  While it
    is true that a great position in one of the major search engines
    can drive a lot of traffic to your site, there are substantial
    barriers to achieving this and corresponding problems that it
    will create.
    The majority of the “quality” traffic to your site will come
    from your own advertising and publicity of the site.
    (See the Online User’s Guide chapter on Promotion.)  You should
    make all of your clients aware of your Web site and encourage
    them to refer it to their friends and acquaintances. The goal of
    your Web site should be to leverage yourself and sort the
    “tire-kickers” from the hot prospects. Your Success Web Site is
    designed specifically to do this by using all of the best,
    proven, direct response marketing techniques.
    Having said this, here is what you need to know about search
    engines…
    It is very difficult to stand out from all the clutter in the
    search engines.  There are literally hundreds of thousands of
    real estate web sites out there. Soon, nearly every respectable
    agent will have his or her own site.  Each of these agents is
    trying to find the “golden search term” that will drive loads of
    new customers to their site.
    Consider a homebuyer looking for real estate information.  She
    sits down at her computer, goes to her favorite search engine,
    and types “real estate”.  The number of sites returned by most
    engines is massive (at last check, www.AltaVista.com returned
    2,695,336 pages).  Even after refining her search, she may still
    end up with hundreds of sites.  If your site isn’t listed on the
    first page or two of results, and more importantly, near the top
    so it’s one of the first ones she sees, it is unlikely your site
    will be found.
    Unfortunately, the problems don’t end there…
    * Not only do you have to compete with hundreds of thousands of
    other agents, there are literally thousands of companies also
    trying to target home buyers and sellers.  They also register
    real estate specific search terms in an attempt to drive traffic
    to their sites. For example, the Home Depot actively targets the
    same types of keywords as real estate agents ­ and they have a
    full-time staff doing nothing but improving their registrations.
    * Directories, such as Yahoo!, can be extremely difficult to get
    into.  Each site that is submitted to Yahoo! is scrutinized by a
    staff reviewer.  These reviewers face a very long backlog of
    sites and it can take 6-8 weeks or more before your site is even
    reviewed.  Reviewers are known to be extremely fickle about the
    sites that they include in their directory.  If they don’t feel
    that your site is professionally designed and contains valuable
    resources, they will simply ignore your submission.
    * Even if you manage to land a top position in one of the major
    search engines, it is very difficult to maintain this position.
    The information that gave your site a top position is easily
    copied and you will soon be bumped from the best positions.
    * Good search engine positions usually lead to large amounts of
    traffic from buyers and sellers who are geographically located
    outside your area and have no interest in purchasing real estate
    from you.  A good direct response web site will generate
    information requests from people all over North America, who
    have no intention of ever buying or selling a house in your area.
    Sorting these “no chance” visitors from your real prospects can
    be very time consuming.
    * Search engines use different methods to create and index their
    listings.  This means that search terms and submission strategies
    which work well for one search engine may not necessarily be as
    successful in another.
    * A top position one day may be non-existent the next.  The major
    engines are continually changing their priorities and indexing
    methods.  As of this writing, Excite had  not indexed a majority
    of submissions in five months.  Similar “black-outs” of engines
    have been reported with AltaVista, Yahoo, HotBot and other major
    engines over the last year.  In most cases, attempts to register
    during “black-out” periods have been completely ignored.
    * BEWARE of online submission software: Over the last year or
    two, many online submission programs have cropped up that allow
    you to “post your site to hundreds, even thousands” of search
    engines, indexes and directories.  While these services would
    seem to be a solution, don’t be misled. Only the top 10 or 15
    engines or directories will bring you any significant traffic.
    These major engines account for well over 90% of all traffic on
    the web and research has shown that the quality of prospect
    delivered by “minor” engines is extremely poor in comparison.
    Many of the top engines completely ignore submissions from some
    online submission services.  Online submission services, because
    they have an identifiable IP address, are easily identified and
    submissions from them can be blocked or ignored at the search
    engine’s discretion.
    The bottom line is that you CANNOT rely on search engine
    registration to make your site successful.  You must continually
    cross-promote your site along with all of your other marketing
    efforts.  The majority of the “quality” traffic to your site
    will come from your own advertising and publicity of the site.
    That said, it is worth the extra effort to make sure that you
    can be found in the search engines!  With a little luck, it can
    lead to a considerable amount of extra business.
    Step 1:  Build and Optimize Your Web Site For Search Engine
       Submission
    ————————————–
    Your Success Web Site already contains all of the features that
    are required to give you the best chance at getting a top search
    engine position.  We continually are enhancing and optimizing
    each site to keep up with the changing requirements of the top
    engines.
    We attempt to maximize the effectiveness of search engine
    registration by making sure that the most important search terms
    (usually your keywords) are found:  your name, the names of your
    team, your company name and the areas that you service. This is
    done through a strategic combination of page titles, keywords,
    “meta-tags” and page content that will produce quality hits.
    We’ve done all the hard work for you.  HOWEVER, since only you
    really know your target market, it is vital for you to complete
    the remainder of the steps.
    Step 2:  Choose Your Site Keywords VERY Carefully
    ————————————–
    When choosing your site keywords, it is important to put
    yourself in the shoes of your prospective clients.  What kind of
    keywords or phrases are they likely to use when searching for
    real estate information?  Choose the wrong keywords, and you’ll
    never be found.
    Fortunately, we have carefully studied which words people use to
    search for real estate.  The results may surprise you.
    1. Most surfers begin by searching for “real estate”.  They quickly
    realize that this search is much too broad and refine their
    search by region.
    2. Approximately 70% of surfers looking for real estate
    information use the search term “AREA real estate”
    (i.e. Chicago real estate, California real estate).
    3. Approximately 20% of surfers looking for real estate
    information used the search term “real estate AREA”
    (i.e. real estate Chicago, real estate California).
    4. All other terms are used significantly less.  Terms such as
    “home buying” or “home selling” are almost never used.
    What lessons can we learn from this?
    1. Make sure that “real estate” is one of your keywords.
    2. Regionalize your keywords wherever possible.  Make sure that
    you use each of the areas you service in your keywords.  For your
    best areas, combine your AREA (City, State/Province) with “real
    estate”.  The more localized the better.  “California real estate”
    is extremely competitive.  “San Francisco real estate” is less
    competitive.  “Venice Beach real estate” is even better.
    3. If your happy customers, or people they’ve referred, are
    trying to find YOU and can’t remember your domain name, they
    will likely search for your name.  If you use your name in your
    site title, make sure that you use the most common form and
    spelling of your name.  If most people know you as “Dave Smith”,
    you should use “Dave Smith” in your site title, NOT “David Smith”
    or worse “Dave T. Smith”. Most search engines are very specific
    about spelling and will ignore matches that are not exact. 
    Also, make sure that you use all variations of your name, and
    other agents on your team, in your keywords.  If your name is
    “Dave Smith” and you work with a partner named “Sandy Wong”, you
    should consider including ALL of the following keywords:
    Dave Smith, David Smith, Sandy Wong and Sandra Wong.
    Once you’ve decided on your keywords, carefully prioritize them.
    There is a limit to the number of keywords you can use, so you
    should order them accordingly.  Pay particular attention to the
    top 3 or 4 keywords.
    Here is a suggested list of keywords (ordered by importance):
    1. Major areas you serve followed by “real estate”. Don’t forget
    commonly used short forms (i.e. Los Angeles real estate,
    California real estate, LA real estate, CA real estate).
    2. The most commonly used form of your name (and partners if
    applicable).
    3. “real estate”
    4. List of areas you serve (State/Province, Cities and Towns).
    Again don’t forget commonly used short forms.
    5. Uncommon forms or common misspellings of your name
    6. “realtors” (note that the plural form will also cover
    “realtor” since it is included in the word)
    7. “homes” (plural includes “home”)
    8. “real estate agents”
    9. “listings”
    10. “realestate” (common misspelling)
    11. Other common real estate terms most applicable to you
    (i.e. “distress sales”, “relocation”, “moving”,
    “properties”, etc.)
    As an example, here is a suggested list of keywords that we are
    currently using for Craig Proctor.  Creating a similar list for
    your site should prove quite successful.
    1. Newmarket real estate
    2. Aurora real estate
    3. York Region real estate
    4. Craig Proctor
    5. real estate
    6. Newmarket
    7. Aurora
    8. York Region
    9. East Gwillimbury
    10. Bradford
    11. Oak Ridges
    12. Richmond Hill
    13. Thornhill
    14. Markham
    15. Unionville
    16. Craig Procter (note common misspelling)
    17. realtors
    18. homes
    19. real estate agents
    20. realestate (note common misspelling as a one word)
    21. distress sales
    The next thing to do is to test your keywords.  Try out some
    searches on several different search engines, using the keywords
    you’ve come up with, and note the results.  Check out the first
    5-10 listings you get, to see if they can provide any other
    ideas.
    You can look at another page’s keywords by clicking the “View”
    menu in your Internet browser and selecting “Source”.  This will
    open a window showing the HTML code for the page you are viewing.
    You should see the page’s keywords near the top.  Be careful not
    to simply copy keywords from someone else’s page - some of the
    keywords may be registered trademarks, and you may break
    copyright laws.
    Another way to get ideas for keywords is to use GoTo.com’s
    Search Terms Suggestion List.  Enter a common keyword or phrase,
    and you will see the number of times that term has been used in
    a search during past month.  You’ll also get a list of other
    suggestions.
    Once you have created and tested your own list of keywords, go
    into your Web Site Control Panel with your Internet browser
    (www.YourDomainName.com/control) and set the keywords for your
    site accordingly.  Click the Search Engines button.  Modify and
    order the keywords.  When you are finished, click the Submit
    button at the bottom of the page.
    To Be Continued…
    ————————————–
    There are, in all, seven steps to fully prepare your site for
    submission to a search engine.  We’ll continue with the rest of
    the steps next week.  In the meantime, make sure you complete
    this week’s task.
    Task of the Week
    ————————————–
    Research, create and test a list of keywords that will uniquely
    identify you within a search engine.  Try to come up with as
    many search terms as you can think of that a potential visitor
    might use to find your site.
    Once you’ve got a list you’re happy with, open the Web Site
    Control Panel and enter your 21 best keywords into the Search
    Engine Parameters and Keywords option.
    —————————————————————–
    “Profiting from your SuccessWebsite” is the email
    version of our “Weekly Success Guide” Online Training Course.
    The online version is available at:
    Success Web Site Online User’s Guide:
    For more information on the Success Web Site:
    Promoting Your Website:
    ——————————————————–
    GOT AN IDEA ON HOW TO IMPROVE YOUR SITE?  We’d love to hear it…
    WHAT DO YOU THINK ABOUT YOUR SITE?  Tell us your success
    stories…
    If you have questions, comments or concerns, please let us know
    ——————————————————–
    The SuccessWebsite Team
    (416)227-0363
    Email:  support@SuccessWebsite.com

    Technorati Tags: listings, real, estate, homes, relocation, agent, buying, selling

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