101 Tips, Tricks and Ideas
for the
Savvy Real Estate Entrepreneur

Dear Friend,
 

   Over the years, I’ve had the opportunity to meet and associate with some outstanding real estate practitioners. A unique lot to say the least. Each one, his or her own person. Seemingly, not needing others for balance or validation. Individuals who are willing to do what it takes to obtain their dreams. People with a personal vision.

   These people are bound by a common thread, although absolutely none of them run with the pack. Most of these leaders are not satisfied, nor could they tolerate, playing second chair.

   Unfortunately, I never had the opportunity to meet some of these individuals. People like Bill Zeckendorf and Richard Reno. They played the game on a different level, a different plane. They’re gone now. But like all of the greats, they left their mark. Their legacy, if you will.

   These are the folks who, along with my father, shaped and influenced my career. These are the teachers. The people who take the time to share their ideas and experiences. The people who love playing the game. The people with a sense of humor.

   Their influence can be seen and felt in the following words. I have tried to quote these individuals where possible although some of their ideas have become so ingrained, they have become mine. And hopefully, they will become yours, as well. With that in mind, here we go ...

1. Remember, it's not just what Real Estate can do for you, it's also what Real Estate can do to you.
 

2. Deal with motivated Sellers only! You're only wasting your time dealing with people who can't or won't make you a good deal.
 

3. If you consistently borrow more than you pay for property, you will go broke.
 

4. Comparable Sales are akin to a neighborhood's credit report.
 

5. "A family that gets along with each other may just be the very best estate plan." Charles Considine
 

6. Financing makes anything possible.
 

7. All aspects of Real Estate require you to be a good manager.
 

8. The interesting thing about Real Estate investing is that we all start out at the same place: Broke and Scared!
 

9. Cash is King!
 

10. Real Estate Political Correctness: Be liberal when estimating repairs and conservative when estimating value.
 

11. The power of compound interest will make you rich if you'll put it to work for you.
 

12. Children have the most compound periods (n) and the least money (pv). Seniors, on the other hand, have the most money (pv) and the fewest compounding periods (n) remaining. Any ideas?
 

13. Without exception, all professional golfers take lessons and practice, practice, practice. Do you think the Real Estate Profession requires anything less?
 

14. News Flash: "The Tortoise Wins The Race!" You don't have to be the fastest, the smartest, the best looking or the highest volume player. All you have to do is enter the race and keep the finish line in mind.
 

15. Always keep your overhead low.
 

16. With technology advancing at a rapid pace, a High-Tech Low-Budget Office is within reach of the average person. Put the technology to work for you.
 

17. "You make a lot of money on a lot of little deals." Warren Harding
 

18. Include "1031 Exchange" language in all of your contracts, including your lease/options.
 

19. Money compounds much faster in a tax free (deferred) environment.
 

20. Internal Revenue Code Section "1031" allows you to sell property held for investment and reinvest in other investment property without paying taxes, thus allowing your estate to grow "Tax Deferred."
 

21. For maximum profit, invest in yourself.
 

22. Do your own personal income taxes. If you own a computer, invest in "Turbo Tax" software. It's the best!
 

23. Don't be a tight ass with your time or talents. That's right, I said tight ass!
 

24. If you don't do anything else, buy one well-located 3 bedroom, 2 bath house a year.
 

25. "Free and Clear" only refers to mortgage debt. Taxes, insurance, maintenance, management, lease fees, special assessments, etc. never go away.
 

26. It can be a lot more fun (and safer) to own free and clear property, but the return just isn't as good.
 

27. O.K. which would you rather have: One free and clear house with a $500 per month positive cash flow; or five leveraged houses with $100 per month positive cash flow each?
 

28. The Real Estate business is an Evolutionary Process. You will improve your operation with time and the proper guidance. Just remember, we all start at the same place.
 

29. Attend at least one good Real Estate (or related) seminar each year.
 

30. One good idea put into practice is all it takes to recoup your educational investment.
 

31. How good is a guarantee? Who knows? It may be good as gold today yet worthless when you need it. Always get a guarantee in writing and secure it with something of adequate value.
 

32. Jack Miller taught me to a) make the best deal possible, then, b) tweak it for the tax considerations of both parties, and finally, c) secure everyone's position. Read this one again!
 

33. You have to be the one who generates offers. If you wait for the other party, it won't happen.
 

34. Always ask for a Discount!
 

35. The safest mortgage to buy at a discount is the one you're paying.
 

36. The best mortgage to buy (option) at a discount is the one about to be paid off.
 

37. Here's the deal. I've got a great offer on a house I purchased with owner financing. The new buyers have secured their own financing. The owner-financed note will be paid at closing. What should I do? a) request a pay-off figure from the seller who financed the property for me, b) ask the seller who financed the property for a discount if I could pay them off early, or c) find out if the seller would rather have the cash or the income stream. Maybe we could move this mortgage to another house I own.
 

38. Work towards limiting or eliminating both your direct and contingent liability.
 

39. Each Habitat for Humanity house built is a free seminar on construction and rehabbing.
 

40. Join an investment group in your town. If you don't have one, form one. If you need help, call me. Keep in mind, the purpose of attending an investment group is to "make more money" not create more work.
 

41. Yard Signs are worth their weight in gold. Use them.
 

42. Most buyers need help wading through the process of buying a home. Realize they want and need help. Hold their hand. Make it easy and enjoyable.
 

43. Add "Owner will Help" to all of your "For Sale" signs and ads. When a potential buyer calls and inquires about help, ask "What kind of help do you need?" Most people only need a little help.
 

44. Keep a log of all potential buyers who call you. It only takes one to buy a house. Find another house or two to sell to the other prospects.
 

45. Real Estate brokers have specialties. Deal with those who specialize in creative financing.
 

46. Never slap a buyer (offer) in the face. After all, they want what you're selling. Always treat an offer with respect even though it may not meet your needs.
 

47. Never let an offer get to you personally. It's just an offer (a starting point).
 

48. "No" is just an opening position. It's rarely the end of the game.
 

49. "Time" is our common enemy.
 

50. Set up a manual or electronic database of all the lenders in your community. Take a month or more and make personal contact with each of them. Find out what type of loans they make. Ask about their repossessions. Ask about their non-performing loans. Establish a working relationship. Follow up with a phone call and a personal note.
 

51. It takes three contacts in a relatively short period of time for a person to remember you. Try a combination of personal, phone and written contacts.
 

52. Buy or develop your own forms. They will save you time and money.
 

53. Buy an inexpensive fax machine out of the profits of your next transaction. Fax offers, solicitations, documents, etc. The 21st century is here, baby! Get in the groove.
 

54. Learn to generate cash first from your real estate investments. Buying and selling will sharpen your skills, immediately improve your lifestyle, and catapult your wealth building program into overdrive.
 

55. Learn to negotiate people's expectations. Be up front and clear. Let people know where your coming from and exactly what they can expect out of you. This is the most powerful negotiation technique in the world!
 

56. The ELF Formula: If something isn't Easy, Lucarative and Fun, why would you want to do it? Warren G. Harding.
 

57. The telephone may be the most important piece of office equipment you own. Learn how to use it efficiently.
 

58. Telephone lines are cheap in comparison to their value. Consider adding another line to your operation to improve your bottom line.
 

59. "Do a little business every day!" Jack Miller
 

60. Consider adding the following in bold letters to your purchase offer contracts: "This offer may be withdrawn anytime prior to acceptance." You can, by law, withdraw any offer prior to acceptance anyway, but doesn't this helps negotiate people's expectations?
 

61. "You must remember that even though we own a property free and clear, we always have a silent partner, the IRS, waiting with it's hand out for a portion of ownership in our property." Richard R. Reno
 

62. Learn how to qualify sellers, buyers, renters, and properties over the phone. This can only be done with the effective use of questions.
 

63. To be an effective negotiator, you must be a "Don't Wanter." Jimmy Napier
 

64. "Every house is a step up for someone." Cliff Weaver
 

65. Borrowed money is not profit. Nor is it tax free. It's a liability. It has to be repaid. Generally, this repayment is in the form of after-tax dollars.
 

66. "There is no problem real estate, only problem ownership." Warren G. Harding
 

67. Problem ownerships create motivated Sellers.
 

68. Develop systems. To be effective, they must be simple and easy to use.
 

69. When buying on lease/options, always get a preliminary title report before any money is exchanged. Then secure your position and protect the title.
 

70. When selling property, consider using a Quit Claim Deed or Special Warranty Deed. A Quit Claim Deed has no warranty of title associated with it whatsoever. With a Special Warranty Deed, you're only warranting the title during your ownership. Neither effects the quality of title being conveyed, only your degree of contingent liability.
 

71. Prospecting tip: Use your picture on all of your prospecting material. People like to see your eyes. It makes you a real person and people will have the feeling they know you even before you meet.
 

72. You can have a professional photographer shoot black and white pictures of you for about 35 bucks. These can be used for your prospecting material, press releases, articles for publication, etc. Ask about digitizing for computer use.
 

73. Post cards are an effective and inexpensive way to prospect. Mail out at least 100 per week. And don't forget your picture.
 

74. Don't know who to mail to? How about attorneys, bankers, small loan companies, credit unions, REALTORS, For Sale by Owners, estates, out of town owners, every body on Cedar Street, everybody in your farm area, title insurance companies, insurance agencies, etc.
 

75. If you don't own a computer, buy one. They have become affordable and easier to use. A computer will do those things you either can't or won't do manually. Such as compile and store mailing lists, track offers and correspondence, produce professional looking documents and forms, communicate and retrieve information from other databases, systematize your management, etc.
 

76. When buying a computer today, you don't have to purchase the top of the line. There are a lot of inexpensive computers with a lot of horsepower. Look for the systems bundled with software you can use. High speed Internet access is crucial. Consider increasing the size of the monitor and the ram. Plan on upgrading every few years. Consider this leverage.
 

77. You can't make a good deal with a bad person. Personal integrity is crucial to your long term financial success.
 

78. Negotiating tip: If someone makes a concession, whether in terms of dollars or character, they will always do it again.
 

79. Don't expect to build a solid financial future on the backs of people who have poor credit, low morals, dubious character or lack personal integrity.
 

80. Loan Constants: Here's the quick course. Hold both of your hands high in the air. One hand represents your original loan balance. The other hand represents your payment amount. As you make payments on a loan, the principal balance is reduced (amortized). As that happens, gradually lower the appropriate hand. Notice, the other hand never lowers because you payments remain constant over the life of the loan. This results in what investors call a high loan constant. The lower your present balance hand goes, the higher the loan constant.
 

81. "Wealth is first of all health, then time, then comfort, then security. It's rarely ultimately measured in money." Jack Miller
 

82. "The only real security in life lies between your ears." Pete Fortunato
 

83. Negotiate discount terms into notes at the time of purchase. The resistance is lowest at this point. Remember, whatever you negotiate is pure profit.
 

84. If the note holder would agree to a 10% discount on the total of 6 monthly payment, in lieu of those payments, what would the yield on your money be? Would you believe 37.15%. That's not bad, especially if done from within the confines of a tax deferred entity such as a retirement account or Roth IRA.
 

85. Never borrow short and lend long. It's high risk at best. The really funny part is you'd expect this to be an iron-clad rule in the financial world, yet it happens every day in a big way.
 

86. An option is a unilateral agreement. One of the two parties involved in the agreement is obligated to do something at the option of the other party. An option is an incomplete transaction until the option is either exercised or expires. Options can be very profitable and are designed to limit risk.
 

87. Suppose you are planning on selling or refinancing a property. The note holder has agreed to accept an additional 10% discount if you will pay him off early. You could round the money up from somewhere and take advantage of the discount then hope for the best, or you could put the agreement in writing, good for let's say 90 days. Then if something unexpected happened and you weren't able to resell or refinance to pay the debt off, your exposer (risk) is limited to your option consideration. If things do work out as planned, you will have experienced a high degree of leverage.
 

88. Failure is a necessary ingredient of success. Learn from your mistakes. Fail forward.
 

89. Forest's mother was right. "Life is like a box of chocolates, you never know what you're going to get." Life is precious and can change in a blink of an eye. Learn to appreciate what you have while you're working to obtain what you want. This is the secret to happiness!
 

90. "The Zeckendorfs were alive and well and very much in real estate. True, we were severely limited in capital, but we had brains, experience, and contacts, and we kept making new contacts." Bill Zeckendorf on his comeback from bankruptcy with his new company, General Property Corporation.
 

91. Contingent contracting is nothing more than writing a contract to purchase that contains a contingency which would allow you to be released from the contract under certain conditions. This in effect turns the contract into somewhat of an option to purchase, doesn't it? Almost all contracts written have contingencies such as financing, condition, title, etc. Why should yours be any different?
 

92. If you limit your liability to your earnest money deposit, don't you really just have an option to purchase? Negotiating the closing date could add value to your option, couldn't it?
 

93. Make it your goal to keep things simple. Simplifying your operation will allow you to get more things done and thus become more productive. Complication leads to confusion and confusion leads to inaction. KISS!
 

94. The two most important questions you can ask yourself when formulating your purchase offers are: 1) "How am I going to make a profit?" and 2) "How will I get my cash back?"
 

95. When rehabbing a home for resale, if at all possible, start your repairs on the outside first. Spend some time and money on the front of the house and the front yard. Curb appeal is what attracts buyers. A yard sign let's them know how to get in touch with you.
 

96. Corporations are entitled to benefits individuals are denied. To become a first class citizen, incorporate. Put the lobbying power of the big boys to work for you.
 

97. You can't do business with everybody. Don't beat yourself up over this fact. The truth of the matter isÖ there are a lot of people you shouldn't do business with. Recognize this early. Life is too short to waste on the wrong people.
 

98. You can make more money with your mind than with your muscles.
 

99. Wealth Building Tip: Find out what makes you the most money, then do more of it.
 

100. Hire yourself out as a bird dog. Locate, package and sell people what they want.
 

101. When all of the other "Get Rich" formulas fail, Buy Low and Sell High!