DEAN GRAZIOSI: DEAN GRAZIOSI REAL ESTATE – REAL ESTATE FEED BY DEAN GRAZIOSI

At some point in our life we need to stop…take stock… and really think about what we are doing with our financial future.  Where will you be? Still working 9 to 5, and figuring out your next step, or making wise investments that make you stand out among the rest? If you are smart and start thinking about your future, you will probably come across the Real Estate Investing option.  Now, this is actually a great way to put together your financial future, relatively quickly. In fact, the process you undertake, when you buy and sell houses, can be one of the quickest ways to earn a great deal of money, but its not a process where you are going to become a millionaire overnight.

Real estate investing takes time, it just takes a few years for a property to appreciate in value. Now, that is not to say that you cannot buy property and turn around and sell it quickly and make a profit, but that is not always the case.

Today home prices are on a downward turn and will continue to fall throughout the next year (no real news here). But with the total downward turn in world economy is there any surprise to this news? In 2009 more people will be selling their home and at lower prices. Now, you can look at this news as being bad, or you can look at the positive side of things.  When you go shopping, you always look for that great “sale,” on anything you are looking for, so when do you think that “sale” will be in the real estate market? Now is the “sale!” The time to buy real estate is now, but not to make a quick turnover.

If you are looking for real estate and want to resell it within the next year, then now is probably not the best time to buy…but if you are looking for real estate at a stupendous price, and are willing to hang onto it for say..3 to 5 years,  or longer, then this is the time to do it, just as the big real estate investors like Dean Graziosi are doing.

Even with the downward trend in the market, and the falling prices which will continue through the following year, there are also a lot of changes in the real estate world which can be very interesting in the future.  The internet will become even more important than it already is in its role. Websites will make it easier to find homes and even complete a real estate transaction.  This means there will be less of a need for real estate brokers, and an elimination of their commissions.

In the end it is expected that 2008 will have been the worst year ever for real estate sales, and that prices will continue to drop during the coming year. 2009 will be slow, but is expected to slowly pick up toward the end of the year, which makes it a perfect time to invest.

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Christopher Reeves once said, “Once you choose hope anything is possible.” We can all testify that he lived  by this saying, as we all should, no matter what we choose to do, but especially if we aim higher than most. For instance, if you ask the average person about the current financial situation, or about buying or selling a house in the current real estate market, he will oooh and ahhh, and go on and on about how times are so difficult, and how there is nothing that can be done, and all you will hear is more and more negative speel coming out of his mouth. No matter where you go, you will find people like this. You know these are the boring ones, the people who have gone nowhere and done nothing in their life

But if you ask Dean Graziosi, or any upbeat, optimistic, happy and hopeful person in the real estate industry about how to buy or sell a house, he will tell you that, yes.. the real estate market is in a slump, but there are all kinds of possibilities within this slump.

According to the news and statistics the housing downturn is not over. In  75 of a hundred of the largest cities in the US, prices are thought to continue to fall during the next year. If you want to buy or sell houses in these cities, you will more often than not be told not to do it, but if you are learning from Dean Graziosi, this means you have a great opportunity here. You have the chance to invest a smaller amount in a home, and expect a much larger return on your investment within the next five to ten years.

In fact, you could even choose to purchase homes in cities that will see a quicker upward turn than any other place in the nation, that way you would make a quicker profit, than if you invested in homes in areas with a slower economy. You don’t always have to invest in homes that are in the same city in which you live.

For instance, if you invested in a home in Mcallen, Texas, you would probably pay a median home price of about $100,000 for real estate. You can expect a 2.5% increase in your investment within the next two years and about a 25% increase in value within the next 5 years. That’s a whole lot more than what you would make saving your money with banks.

If you decided to look in Rochester, New York, you would find a median home price of about $121,000, with an increase in price of about 3.4% in a couple of years and a 20% increase within the next five years.

Another great city Dean Graziosi would consider investing in is Birmingham Alabama, where home prices are at about  $156,000 and a projected increase of about 3% in the next three years, with a projected 30% increase in the next five years.

As you can see there are still great real estate investments to be made, just not in what we knew a few years ago as the top cities to invest in (maybe these are changing).  The real estate market is a real buyers market now, but it’s a purchase you want to make and keep for about five years in order to make a profit. In some cases, you can flip and make a profit, but you are better off hanging on to these investments for a while, renting them, or even mortgaging them yourself to make your profit.

Whatever you do and however you decide to make your real estate investments, there is no doubt, that money is to be made in the real estate market, no matter what the world economy looks like. People still need places to live, still need financing, and still buy homes.

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The biggest problem in the real estate business today is the sudden flood of new investors.  And no, by this I am not referring to the competition factor, but rather the fact that new real estate investors have literally jumped into the market with blind folds on.

What new investors fail to realize is that relying on short-term appreciation in real estate is not the brightest of ideas.  With the market so unpredictable in the short-term, investors should plan on either holding onto their real estate for at least 10-15 years or if you know how to time the market, buying and flipping often works too.  The rental market is very unpredictable, so if you buy a property with hopes of renting it for a positive cash flow, you’d better get a very good deal.  Just know that in the long run, if you have purchased the right real estate, it is almost always a good investment. 

If you are thinking about forgoing the real estate education, please don’t.  There is so much to be learned about investment techniques, financing, negotiation and acquisition; and the more you learn the higher your chances of success.  Investing in a solid real estate investment education is one of the best things you can do to minimize your risks.

Yes, it takes money to make money.  In real estate, one of the worst things you can do is have an insufficient cash reserve.  The trick of the trade is this; you have to be able to sustain yourself through times of negative cash flow, as well as unforeseeable repair and maintenance problems.  Not being able to handle negative cash flow is the problem that will smash a new investors real estate dreams.  Purchasing no money down properties is the easy part, maintaining them is not so easy if you have no back up cash.  Moreover, being hard up for cash will put you in the predicament where you are willing to settle in situations where you shouldn’t, such as accepting just any tenant or making substandard repairs just to get by. 

Real estate is one of the few businesses that deal with large sums of money.  The problem is that a simple greedy mentality is an easy pitfall for new investors to fall into.  One of the most common problems new investors make is expecting too large a profit, especially when it comes to flipping properties to other investors. No, you cannot buy a rehab property and split the profit 50/50, it doesn’t work that way.  You find the deal, take a small cut and move on. 

Lastly, contrary to popular belief, getting rich quick in real estate is a 5-10 year process for most people, not 6-12 months.  Don’t expect to quit your job in three to six months or when you fall short you will be tempted to quit.  If you do happen to be one of those lucky investors, the success will just be sweeter. 

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Selling a house in today’s real estate market can be frustrating for some people. They don’t know much about the market and they don’t know how to fix a house to sell either! Many homeowners eventually wonder what they are doing wrong! They end up going to an expert like Dean Graziosi and asking for advice, and the advice is always the same.

They are told, ¨The kitchen and bathrooms are not up to date and this is what turns away potential buyers.¨ True! Most homes that have an outdated kitchen and bath will be hard to sell, but as an investor you want to take a look at these homes, because they can be opportunities. Often you can buy a home for less money when the kitchen and bath are outdated.

Of course, when you do buy a home that needs remodeling in the kitchen and bath, then you need to estimate the amount of money you will have to spend remodeling. Use this knowledge to negotiate a lower price with the seller. Dean Graziosi has often emphasized the importance of knowledge when buying a real estate investment, and there is no difference here. In order to negotiate a good price on one of these homes you need to have some kind of idea, as to the amount of money you will need to have to remodel a kitchen or a bath. A good place to start learning about this type of thing is to visit several of the remodeling sites online. You can also visit some of the larger home improvement stores to get an estimate on the price of products.

Often, you don’t have to do a large remodel of baths and kitchens. Most of the time small changes, like the change of counter tops and cabinet doors will give the kitchen an updated look. Even changing knobs, and updating the flooring can make all the difference in the world. Sometimes the only thing that you need to do is change out the appliances and put in modern, energy efficient appliances. Remodeling a kitchen or a bath, may make you several thousand dollars, when you do decide to turn the property around and sell it.

In conclusion, you want to find investment property that may need small kitchen and bath remodeling, then negotiate a lower price because of it. Once you have bought the property then you want to put a little money into the kitchen and the bath to make it appear more modern. By doing this you will make a nice profit when you want to sell. Even if you decide to rent the property for a period of time, you are more likely to get long term tenants when the bathroom and kitchen are updated.

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Dean Graziosi wants you to be successful as an investor in the real estate market. So he has put together some common real estate marketing strategies that should be avoided.

1.         Not having any marketing strategy – It’s always important to have a marketing strategy and not just place signs and placards around neighborhoods without testing and reviewing the kind of response rate your signs will get.

2.         Not knowing what marketing strategies do work and working them – Not understanding what strategies work and what strategies work well can be the difference in whether you make money or don’t in real estate investing.

3          Not sticking to your budget – Deciding how much per month you have to spend on marketing is important. When you have a number that works for you and your budget, STICK TO IT. You wouldn’t flush money down the toilet, so use the strategies you can afford to be successful in with your real estate ventures.

4.         Find Your Competitive Advantage – Find your competitive edge and if you don’t have one, then you need to develop one. Word of mouth, free publicity, etc, whatever works to your advantage is what you need to focus on.

5.         No Persistence – The key to successful real estate marketing is to follow-up and remain persistent. To quit when there are untapped databases that only needed a bit more persistence from you is a shame and not the way to find success in real estate investing.

6.         Go Along with the Crowd – If you’re using the same marketing strategies as other investors in your area, why should a prospective seller give you a call? Develop your own marketing strategy so you stand out in the crowd and sellers are eager to do business with you.

Making sure your marketing strategies don’t fall into some of the common marketing mistakes people make is the difference between being successful like Dean Graziosi or just being a run of the mill real estate investor.

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