Here are some questions that I have heard in the past.
Do the people in my Mastermind Group (MMG) need to know they're in my Mastermind Group?
- No. I have dozens of people in my MMG, but most of them don't know it. MMG's can be very informal, and they don't necessarily meet together. Mine never does. Usually I take someone to lunch and pick his brain. I try to offer something of value to that person as well. MMG's are just intentional relationships. Kimberly George, a life coach in Massachusetts, uses the term Social Capital to speak about leveraging the people you know, similar to leveraging, or borrowing, money. You are borrowing their wisdom.
Should I join organizations that promise to show me how to invest in real estate?
- If so, which ones?
- If not, why not?
- There are many good and reputable sources of information about real estate investing. Most of the information is available online or in books. Some organizations are out there that offer to give you training for a fee. I don't subscribe to any of them, so I can't say whether they are good or not. I have gotten a great education as a Realtor, and many of the continuing education classes for Realtors are available to the public. The best designations to look for are GRI, CRS and CCIM. If you want some information about classes, let me know.
Can you really get 100% financing?
- Yes. I have a friend who has never put any money down for a house, and he owns several. On the other hand, I usually put down at least 20% in cash. In my friend's case, he has a small cash flow and a higher risk, but he is maximizing his personal capital. In my case, I have a larger cash flow and smaller risk, but I have tied up large amounts of capital. Which way is the right way? The answer is, "It depends." Each deal is different and needs to be evaluated according to your long and short term goals. The real question is not whether you can get it, but whether you should. If you have to have 100% financing to make the deal work, it probably is better left alone.
Is it really feasible to fix up and "flip" houses for a profit?
- Yes. My sister, mother and sister-in-law are the queens of Flipdom. They do it all the time. This strategy works best in areas of high job creation and low-to-no supply of new houses in a particular price range. In my hometown of Hartsville, SC, on the block where I grew up, are a series of cute but slightly run-down houses. They are in a good school district and sit in the middle of town where there is no more space to build new houses. That is a dream market. My sister-in-law lives in Atlanta. She buys houses in run-down neighborhoods that border good ones. Again, no new houses to compete with. Be careful, however!! If you don't know anything about construction, you can put yourself in a world of hurt. I don't recommend the fix 'n' flip strategy unless you have some construction experience or a qualified partner.
See my other blogs for the whole series.