Real Estate Investing Takes The Right Mindset

Everyone wants to be rich, right? Well, actually, everyone says they want to be rich. But few people want to actually take responsibility for taking control of their future. And that's what you have to do in order to get rich: Take control.

This may sound like an intimidatingly difficult undertaking, but it really isn't as hard as it sounds. With all of the literature and educational materials on the market for budding Minnesota real estate investors, there's no reason you shouldn't be able to learn the ropes, provided that you put in the necessary hours of study. In fact, simply reading this article is a great start to the learning process that will ultimately transform you into a successful investor.

As you come closer to your goal of becoming rich, you will realize that they key to success isn't really mastery of the minutiae of accounting and all of the other details involved in the process. You can always find others more knowledgeable than you on these subjects. In reality, the trick is to look at money from the perspective of a rich person.

It may sound overly simple, but how are you ever going to become a successful investor if you still have the thought process of a salaried employee?

This may seem quite simple (and it is!), but the investor perspective sets the stage for you to become rich. From the employee's perspective, one must do exactly what the boss instructs, and work within the established system to earn their livelihoods. Those with this mindset always manage to get by, but if you want to do more than just get by you must obviously take a different approach.

If your goal is to make your own fortune, you must first teach yourself to adopt the mindset of those who control the money. You've got to be smart and assertive, and rather than working for your money, you have to make your money work for you.

Who are these people who are financially in control? Corporations hold a great deal of power in our society, but a corporation is an abstract concept; the money and therefore the power are really held by the businessmen who make the decisions for the corporations.

With these businesspeople in mind, you are getting closer to understanding what it really means to be in control of money, but are they really the ones in charge? Not quite; at the very top, you have the investors.

In contrast to hired employees and even major businessman, investors are the real financial top dogs, and this is because they really and truly have their funds working for them. This may seem like an oversimplification, but the truth is that it isn't as difficult as it may initially appear - in fact, just about anyone could do it, provided that they aren't trapped in the mentality of an employee. This self limiting, "employee," mindset is, at its heart, the reason why most people are unable to become rich.

All you have to do to become one of the big fish is invest. It's that simple. Investing in real estate is a good bet because it's a stable investment. It's so stable, in fact, that the bank will actually lend you money to purchase it. No kidding.

That's the long and short of what you will learn if you read every book available to you on how to start thinking rich and stop thinking secure. They will tell you how easy it is. They will tell you to change your thinking. And they will tell you to let the experts deal with the details.

Property Investing Success Is A Matter Of Dedication, Not Luck

Maybe the rich are often successful because they have been taught not to neglect the basics. Many people , for instance, might assume that successful people are simply very, very lucky or that they have been born with an innate knowledge about investing.

This just isn't the case.

What the rich do differently from other people, and what all successful property investors do, is prepare. The successful property investor does his or her homework.

“The ABCs of Property Investing” author Ken McElroy tells an anecdote regarding one of his clients, who became a client of his only after making a complete mess of his investment . McElroy and his company are in the business of property management. Ideally, an investor hires a property management firm at the outset, as opposed to taking a stab at managing his property from a distance. That is what this investor did, and he quickly found out that the time required to manage his own property was unreasonable.

This was not his only mistake. In addition, he had not even taken the time to visit his investment property prior to buying it, so he had no idea it was full of criminals and deadbeats. He had neglected to engage a group of experts who would have been quick to tell him not to invest in that area, due to its high crime rate. It was a bad neighborhood, and he should've known to avoid it. In fact, he could've avoided it very easily if had he just done his homework.

It is easy to imagine the enormous amount of money he spent rehabilitating the building—an expense he could have spared himself just by budgeting for the experts he needed. It would've been impossible to fix the problem of the property's location, therefore the property would never pull in much rent.

In nearly every case, the wise businessman can't afford to NOT hire the experts.

Wealthy Minnesota real estate investors are also possessed of a staggering amount of focus. That's the reason that they're rich. They pick their target and narrow their scope till they are looking at one piece of property. They've already decided what type of property they're interested in. In fact, they might specialize in hotels or apartment complexes or what have you. They constantly are aware of the areas that they're interested in and the age of buildings they're willing to look at.

If their 1st choice of location doesn't yield any leads, they try their second choice, and on and on, but they always keep in mind exactly what they're looking for.

One key lesson people learn from being rich is that money talks. Savvy real estate investors understand that you do not have to wait until a piece of property is for sale to purchase. If an interested party surprises the current owner of a property with an offer, it's often possible to get a good price on a property that isn't actually up for sale. Best of all, there aren't any competitors to drive up the price.

The rich do appear to reside in a different world. For them, funds are always plentiful. They won't worry in the event that a deal doesn't go through, since they know that there will always be others. A person seeking to increase his wealth substantially through investing might worry that he let one get away.

Ken McElroy suggests that the best approach is to remain aloof, and to assume every negotiation will result in the buyer walking away from the deal. Most deals simply aren't deals, he said. The savvy property investor understands that it's essential to become too committed to the idea of closing the deal.

Successful investors know all of this, not because they were born with this knowledge, but because they have been educated on the subject, or else taken the time to learn. Anyone can potentially learn how to invest as the wealthy do; it simply requires research and practice.

How you will use your MN property after you've purchased it?

Minnesota property investing can appear to be a complicated subject, but that is just since there are so many decisions to make. When you invest, you have an almost unlimited number of ways to profit. That, however, entails being able to make choices. You have to decide how much you'll learn about each element of Minnesota real estate investing, whom to add to your team, where to find properties, whether or not a property is the right one for you, and so on.

A key question you will inevitably face is how you will use a piece of property after you've purchased it. You might not be the kind of real estate investor who wants to purchase a property and keep it in your possession it for a long time. You may not want to grapple with property managers and tenants or the maintenance of a piece of real estate. If these activities do not appeal to you in the slightest, the other option at your disposal is flipping.

Flipping a property is the practice of selling it immediately after you buy it, often at the same closing. At the latest, flippers tend to begin preparing to sell a property the day that he or she buys. Some will even begin the process prior to even buying the property, which is very risky business. However one goes about doing it, flipping inevitably entails hurrying to the auction block, because a vacant piece of property always represents a liability.

However, when you hold a piece of property, you are afforded the opportunity to increase its value. If you manage to find a great deal, the price you paid for the property will likely represent only a tiny fraction of what you can potentially make from it, and when you finally decide to sell it, you will be able to do so at your convenience and get more than you would have by flipping.

This is true particularly if your MN home is a multifamily dwelling like an apartment high-rise. If it is a good property in a good location, and you maintain it, occupancy is probably going to stay high. With a property like that, your earnings tend to grow exponentially. With good management, that is virtually certain.

Speaking of management, you'll have to choose whether you will do that yourself or hire a company to do that for you. If you are the owner of a particularly sizable property, or if you have many properties, you'll have to employ a manager. Ken McElroy, author of The ABCs of Real Estate Investing, advises that you hire a real estate management company so your time and effort will be put to better use elsewhere.

These are the sorts of things you'll have to keep in mind if you hold a property.

In the end, however, whether you choose to flip a piece of property or hold it depends mainly on how you'd prefer to spend your time. Perhaps you would enjoy the fast paced workday that flipping entails. Perhaps this rush sounds like an adventure to you. If this is the case, you ought to learn the right way to flip properties (i.e., wait till you own a property to sell it and not to approach buyers at the very closing where you obtained a property).

However, if the concept of caring for a piece of property seems appealing to you, then buying and holding might be right for you. Depending on your particular skill set, you personally may be able to make more money working one way as opposed to another. It is completely up to you.

Study the Real Estate Market Consistently

Millions of people find pleasure in being mystified. Art mystifies them, so they gasp with pleasure and congratulate the artist on his or her skill. They see science as a mystery, so they don't even want to know what researchers are really up to. MN real estate investment mystifies them, and so they make the assumption that it's a big gamble and that some people are either quite lucky, or that they have an inborn gift.

They refuse to accept that succeeding in all three disciplines is just contingent on breaking it down into steps and following through. Readers of the Rich Dad, Poor Dad series by Robert Kiyosaki will realize that, in real estate investing, there are 5 important steps necessary to succeed. Investor should:

1.Learn how to speak in the language of real estate investment. This means to take in the basics of finance and accounting and know how to read financial statements. These skills will help determine whether a property is assets and potential drains. It is also important to learn about tax law so that you do not make costly mistakes, but also to know what the best deductions for real estate are. Knowing the basics of these subjects will give the investor the power to communicate effectively with his accountant and lawyers.

2.Keep experts close by. This means networking and studying the people who may wind up on the team of real estate experts which he will hire to assist him in the location and evaluation of properties. The smart investor will get to know the real estate community in the city in which he plans to invest his money, and thereby get to know the city.

3.Study the market consistently and closely. The investor should study up on various cities and see what the experts say about them, but he should also evaluate them for himself. He should study his home city twice as thoroughly, if that is the he is planning on putting his investment funds there. He should familiarize himself with the economy and which areas are good news, and which are bad news. He should learn what the rents in his marker and decide if a piece of property located in that area would assist him in reaching his financial goals. The investor should visit as many properties as he can with his team of experts, even if he is not actually ready to make a purchase.

4.The investor should know the right and wrong way to negotiate . Many people simply have incorrect notions about dealing with sellers. These people are under the impression that the object of each and every negotiation is reach a closing regardless of the circumstances, and to strong-arm the seller into ceding to his demands. If it turns out that the investor is able to make the numbers add up in his favor, and the seller agrees to his terms of sale, that is the point at which the purchaser should go ahead with the purchase of the property. If this is not true, the buyer should walk away. “The ABCs of Real Estate Investing,” by Ken McElroy states that the investor should go into every negotiation assuming he will walk away in the end.

5. Take care of your MN properties. This comprises just what you'd think. Conduct the required repairs and renovations on the property and fill any empty units. Make sure the renters' wants and needs are addressed.

This description represents a streamlined version of the process, however these five simple steps show that real estate investment is a process which can be learned by anyone. Nothing about it is really mysterious about it.

Investment Property - What is The Best Kind For You?

Part of learning how to invest in real estate is figuring out what kind of property to look for. There are many different choices. The investor can purchase houses, duplexes, condominiums or apartment buildings - and that’s just the tip of the iceberg. He/she can buy lots and build investment property or purchase lots and rent them to people who build on them. He/she can make “in really good shape” a part of their search criteria, or he/she can look for a Minnesota property that appears to be in rougher condition than it actually is, in order to get a good price. They can hunt for owners who are facing foreclosure in the hope that they finds someone who is hoping to put his/her property out of their mind so that they can just be rid of it.

There are lots of possibilities. The question is, which property is the right property for you?
Ultimately, the best investment property is the one that will make the most money while costing the least amount to be rented out. Getting a property up to speed might involve renovation to bring a building up to code – adding up-to-date appliances and such. It may involve a fresh coat of paint, or even evicting some undesirable tenants. What the potential new owner has to determine is, if the building's problems are fixable.

For instance, in his book Ken McElroy in his book “The ABCs of Investing,” writes about an investor who had bought a building without even viewing the site, and found himself saddled with some tenants who who were bad and dangerous The investment property was in a bad part of the city where the owner should never have bought a property. By the time he got around to contracting McElroy's property management company, he had already lost a bunch of potential rental income due to delinquency.

McElroy's team repaired as much as they could. Got rid of the undesirable tenants and hired security for the building, but they could do nothing about the quality of the surrounding neighborhood. The property would never be one that renters with a lot of choices would want to live it, simply based on its location. This property would never get the rent that it could have if it had simply been situated in another area. Most of the building's issues were just unfixable.

The old saying, “Location, location, location” is important for a reason. A property’s Location might be the single most important factor the MN real estate investor should consider when searching for potential properties to invest in.

Besides simple viability, an investor needs to think about how he/she wants to go about handling his/her investments. McElroy advises investors to contract a property management firm for the expertise and to free the real estate investor to seek out additional investments, but some investors just like managing their property by themselves. That type of person might want to consider purchasing property that is little enough for him/her to take care of on his/her own. Some investors are unwilling working with partners or investors and will be restricted by that too. When this is the case, less expensive and smaller is probably the best option for them.

In the end, Mr. McElroy also recommends the investor not assume that he/she should begin with a tiny property. If he/she has learned enough to buy investment property in the first place, he/she can learn how to use other people's money. He/she should remember, however, what they are comfortable doing - or what they would consider the most favorable approach. The opportunities are, after all, almost infinite.

First Time Homebuyers in Minnesota

If someone is buying a Minnesota home for the 1st time it can be truly gratifying. It can also be very, very scary. There’s a ton of info to comprehend in a fairly fast time period. There are new terms and numbers to understand and you will have dozens questions!

From a psychological standpoint, whenever you’re studying new material you only remember about 20 percent of the 1st exposure to it, and although you asked a question once, you might need to ask it repeatedly before the information makes sense. Any good Minnesota Realtors will understand this and use it to bring all the technical terminology to a simpler level so that it can be perceived by your brain. It is not even a bad idea that you to take notes as you speak with them so you can look back & remember what was said.

As a 1st time home buyer as well, you will have access to all the 1st time home buyer financing that people who already own don’t have! What’s so special about this? Because now you can buy anywhere from between $30,000 to $35,000 MORE of a Minneapolis home same mortgage payment as other buyers. These programs are available basically because the U.S. government wants people to own Minnesota homes. They believe that you are a more trustworthy and reliable person in order to buy, and manage your own house, so they’ve made these benefits available to encourage anyone that is “on the fence” about their first buying experience and to make it a bit easier!

As for the new buyers the first initial inquiry is usually “where do I start?”. There are those who begin searching the MN MLS listings or in the local paper looking at what’s for sale and that’s a great way to see what’s in your desired location, but now when can you visit them? Well, that’s where I come in. If you want to make appointments to see the inside of a Minneapolis home for sale, a Minnesota real estate agent must set up the arrangements for you, get the lock-box codes & open the houses up for you. They are is accountable for you while you’re in that house as well. Once you begin looking at homes as well, consider consulting someone at a bank or other lending institution as well, to make sure you are shopping in a price range that you can qualify for (as well as afford). Some people are surprised when they qualify for more or less than they assumed and were looking at the wrong housing for their range, wasting their own precious time.

Be aware as well, that many Minnesota Realtors in the industry will attempt to get you to sign a contract immediately that says you will work with them and only them. You do not need to sign that. They are just trying to make sure they “lock you in”, but you can always try different real estate agents and use whoever you prefer. Or even question them to see who you like the most & who is going to serve your needs! At the end of the day, your Realtor will not get paid until you buy a house using them and even that is paid of the seller’s fees, not the buyer’s!

The First Hurdle of Minnesota Real Estate Investing

Reading Robert Kiyosaki's Rich Dad, Poor Dad book series on real estate investing is enough to make anybody chomp at the bit to get started. These books make it seem just that easy. Kiyosaki would be delighted, of course. That's what he and similar authors want—for their readers to feel as if they can do anything. That means they've given a very good pep talk.

And while they are right in a way—anyone CAN learn to invest in Minnesota real estate—there are some things that a novice real estate investor may not understand right off the bat. For one thing, what seems to work out smoothly in the black-and-white pages of a book has a few more hitches when you apply it to real life.

Kiyosaki's books teach his readers “just enough to be dangerous.” If they get out there and start the real estate investing game, they will be heading for the first hurdle of investing at an alarmingly fast rate. If it doesn't shake them too bad, then they might just have a chance at becoming a real investor. That first hurdle, the hurdle which can throw a novice right out of the saddle is this: Learning he's got a lot more learning to do.

See, Kiyosaki's books provide the reader with an overall framework. It's kind of like explaining to someone the technicalities of staying on a wild horse. It may sound easy in theory, but the first time that horse actually jumps with the novice on his back, that novice learns quickly that life and theory are two separate things.

However, if he can hold on tight, he's got a chance to ride that thing till it's tired.

Rich Dad adviser Ken McElroy, who authored the book “The ABCs of Investing,” sets forth a layered method of research, which gets the investor to carry out a broad search of the markets he might like to dip his toe into. In other words, he determines which area of the country, and then which city, in which he would like to look for properties. It is important, McElroy writes, to know which criteria to use in order to determine what makes a desirable market.

Criteria for choosing you city is all about the economy. Are big corporations moving in, or are businessmen closing up shop? Are people moving in by the truckloads or fleeing in droves? The smart investor puts his money where the people are and where they want to be.

After that, McElroy advises, visit the city. Before his visit, the smart investor makes sure he will have appointments with local Minnesota realty experts. While he meets with those experts, he will evaluate them for a possible place on his team. Putting together that team of experts is a step that should not be skipped at any cost, yet the novice often does skip this step. The experiences the novice may have as a result is often enough to put him off real estate investing forever, because skimping on your team can be very, very costly.

The first list of experts the investor speaks to in the city will introduce him to the next list, who will lead him to more, and so on. He will meet local business owners and government officials who will give him even more information on the city. Because he took the time to learn how to read financial documents, and learn the basics of real estate law, he will be able to ask intelligent question and to know when someone isn't being quite up front. He will know what documents to ask for in order to prove or disprove the grand statements that people are giving him.

If the novice real estate investor enjoys this investigative approach to things, and loves the fact that the work he does in the beginning gains him knowledge which prepares him for digging up even more knowledge and then more, then he will become a good investor.

Anyone planning to skimp on the work of Minnesota real estate investing is planning to fail.