Michael Emilio

Living on a Budget: Reasons and Motivations

Michael Emilio — Wed, 12 Nov 2008 21:07:01 +0000

Wanting to live on a budget doesn’t mean that you must be broke.

In fact, it’s the furthest thing from the truth! There’s a lot of reasons why you might want to live on a budget and for the most part they’re all good reasons.

Think about it. Would you rather be spending more than you earn and going to sleep worried at night wondering how you’re going to make your rent or mortgage payment? Or would you rather live within your means, invest your extra money wisely, and sleep soundly at night knowing that you’re on a solid financial path?

Living on a budget doesn’t mean you’re going to start living in a shack and spend hours a day pouring over spreadsheets of financial information with a red pen. You don’t have to write anything down in spreadsheets if you don’t want to. You don’t have to cut out all the good things in life. You don’t have to bring a plastic bag full of coupons to the supermarket. You don’t have to start eating 50 cent top ramen soup every day.

If you do choose to live on a budget, you’ll be living a better life. You’ll be able to invest a portion of your income into any investment vehicles you may so choose - including real estate investing or your retirement fund. Check out the posts The 10% Debt Reduction Plan, How to Escape Your Mounting Credit Card Debt Financial Situation, and The Debt Destruction Technique: Destroying Debt One at a Time for more information on this. Financial freedom is the goal - controlling your finances consciously is the solution.

Stop trying to keep up with the Joneses by getting caught up in the whirlwind of consumer spending. Live within a budget and invest smartly and you’ll be passing the Joneses by in your Maserati GranTurismo (my personal favorite sports car - insert your favorite car there if the Maserati isn’t your cup of tea).

What’s most fascinating about living on a budget is that once you get into the budgeting lifestyle you really won’t notice the difference in your quality of life. In fact, you may actually improve the quality of your life because you won’t be worrying like mad like you used to about the huge credit card bills piling up on your kitchen table.

What we want to do is make financial lifestyle changes on a day-to-day basis by taking fresh eyes to the way you live your life. We’ll make the shift from the place you are financially to where you want to go.

The challenge with “living on a budget” is the actual phrase, “living on a budget”. Sounds rough, doesn’t it? Maybe the phrase makes you imagine eating rice for breakfast, lunch and dinner, reusing your kitchen paper towels, and washing all your clothes in the local river. It doesn’t have to be like this (unless you really like the river life).

Living on a budget is about discipline - a choice you make to notice what you’re spending and making per month. That’s basically what it’s all about - budgeting is not about living in a van down by the river.

People want to live on a budget for different reasons. Maybe you want to retire early. Maybe you want to save up for a home or a car. Maybe you want to increase your savings by dropping your expenses. Maybe you want the pleasure of wanting the balance in your bank account grow. Maybe you want to purchase a multi-unit property for real estate investing and you need that capital. Maybe you want to get to the point financially that you wake up in the morning knowing you have the freedom to not go to work if you don’t want to because you’re financially free. Whatever the reason, budgeting will get you to your financial goals!

Have you ever checked your savings or checking balance, nervously noticed the balance is close to zero, yet realized you have a mountain of bills to pay? If you’ve never felt this feeling then feel lucky because millions of people have! It affects your mood, your relationships, and your sleep. For some people, this is a situation that plays itself out on a monthly basis. The solution is to create a simple budget plan and disciplining yourself to stick with it. It’s about overcoming the negative financial spending habits that have put you in the situation in the first place.

Most long-term relationships end because of money. It’s sad but true. This holds true across socio-economic levels - from the ultra-rich to the less financially fortunate. In fact, 7 out of 10 couples do not agree with each other on financial issues - mainly on credit card spending! We find a partner that likes going to the same nightclubs yet we forget to see if we’re financially compatible! The basis of the fighting between couples on financial matters can be due to power struggles, emotions, love or otherwise. The way out of this cycle? Yes, you got it, budgeting. You’ll hear that word a lot in this article.

Remember when I said that budgeting doesn’t mean you have to become a monk and forgo all modern luxuries? Well, I’ll tell you right now - budgeting also means to treat yourself. If you budget correctly, you’ll actually be improving the luxury aspects of your life in the long run. Budgeting can bring you that huge mansion on the corner lot. Budgeting can bring you a two week long stay at an ultra-exclusive resort.

One of the interesting aspects of budgeting is that you may just realize that the best things in life really are free. You may realize that instead of your old treat of a Starbucks triple ultra-mocha choco-latte crapuccino you actually prefer going for a walk in nature, perhaps with a home-made cup of tea. You may realize that instead of your tri-weekly visits to the local movie theater, you prefer reading a book at your local public library. You may realize that instead of “making it rain” at a South Beach nightclub and spending $500 on a bottle of alcohol (yes, that’s how much it costs in South Beach for a bottle of vodka or whatever type of spirits you prefer), you might instead enjoy spending some time with friends and family at a house party playing music together.

The bottom-line is that budgetting is something we all can do - no matter what our economic level is currently. The first step is budgetting is making the decision to live consciously when it comes to your finances. Then all it takes is some smart habits and financial techniques and you’ll be on your way to financial freedom!

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Get in Control: The Nickel and Dime Approach to Negotiating

Michael Emilio — Thu, 06 Nov 2008 00:41:47 +0000

Today’s lesson is on the difference between a nickel and a dime.

Well, not literal nickel and dimes. We know that obviously nickels are 5 cents while dimes are 10 cents. But it’s time to learn to apply this to negotiation strategies.

If we’re negotiating with a seller, then we want them to drop their price for us by a dime for every nickel that we’re moving up in price for them. Let’s put this into a concrete example so we understand each other on this buying tactic.

When we make offers to purchase, let’s say on a real estate investment purchase, a response from the seller may come back quickly. If the property in question has a listing price of $200,000, you might make an initial offer of $170,000. The counter-offer might come back to you for $195,000. The average negotiator may just split the difference. Then they keep splitting, and keep splitting, and keep splitting. They’ll find the middle point between $195,000 and their original offer of $170,000 and come up with $182,500 as the counter-offer. The seller then typically counters with a price that’s in between their original counter ($195,000) and the buyer’s counter ($182,500) which would be $188,750. The negotiation usually ends at this point. The typical seller only does two counter-offers, with the rare third counter-offer, but almost never more than three - the reason is that sellers get sick of this predictable and boring back-and-forth split-down-the-middle negotiating style! This is not an efficient way to do negotiations - so we’ll use a different strategy - a smarter strategy.

Instead of just splitting the price difference, increase your offer each round, but by less dollars each time. For example, you offer $170,000 and they counter with $195,000. Raise your original offer by $4000 and offer that ($174,000). They may counter with $184,500. Your next counter should be $177,000 - this means that instead of raising the offer by $4000 as you originally did, now you’re only raising it by $3000. Each of your offers comes by you giving less each time you make a counter-offer. You’re giving yourself a major psychological advantage over the seller by using the strategy. The seller, by noticing you’re offering less each time, feels like you’re getting near the max amount you’d be willing to pay for the property. This “max amount” never is verbalized - instead this is a subconscious reaction on the part of the seller to feel a twinge of fear. This will help end negotiations quickly in a positive way for you. The sellers get worn down and nervous by this style of negotiating. After a round or two of this they feel like they’ve negotiated hard but this is the best price they can get from you. In our example, the seller may accept that second counter-offer you make of $177,000. If you compare this new counter-offer of $177,000 to the traditional counter-offer of $188,750 this means you’ve saved $11,750 - all from smart negotiation strategies that save you money.

You might be asking: “Well Mike, what if the seller doesn’t counter-offer and they feel like the initial offer I made isn’t worth a counter?” One of the most important concepts to learn in any negotiation is to always be willing to walk away. I’ll say it again because this is so important: Always be willing to walk away. If you aren’t willing to walk away from a deal, no matter how badly you want that item, you will lose. Guaranteed. Want to know another little secret? Being willing to walk away works in any negotiation - in any aspect of life. The one that is willing to walk away almost always wins the negotiation - the other one almost always loses.

If you’re doing real estate investing and you come across a property with a price that’s too high to make a profit on and the seller doesn’t want to budge on the price and terms, then you just have to walk away from it. If the seller is unwilling to negotiate with you and work with you to drop the price or improve the terms significantly, then just walk away from the deal - it’s not your deal, it’s not meant for you. If you really like this property though, you may want to wait 4-5 days and then make another higher offer. Perhaps contact the real estate agent directly and ask the agent if the seller would be willing to do a counter-offer. Sometimes a seller is more willing to make verbal counter-offers and will ignore written ones. I’d always advise written offers but if the opportunity is there then this may be an option for you.

When using the nickels-vs-dimes strategy, timing plays a big role in your strategy. Let’s say the seller makes counter-offers, but you counter immediately upon hearing from the seller. The seller is now in control - this falls in line with never falling in love with a property and always being willing to walk away from a deal. The seller wants to prolong the negotiations as long as possible because all the negotiation stress is being carried by you. The seller feels that you need this property. The seller gets the vibe that you’re desperate to get this deal done for whatever reason. When this happens there’s no incentive for the seller to stop; the only incentive is for the seller to continue to negotiate because of the knowledge that you desperately want this deal so bad that you respond immediately to all counter-offers.

You want the seller to feel anxious about the deal. You want to seller to feel like there’s a possibility that the deal will fall through if there’s too much haggling over the price. If you feel like there’s not tons of interest in this property on the market and it won’t be sold out from underneath you then get back to the seller at your leisure - make sure to wait a minimum of six hours before responding to their counter-offer. When talking to the agent, say you really have to think about this deal - you have to think about it long and hard. Say you also want to start looking at other compatible properties - ask the agent to email you or fax you other properties available in the area. Say that it’s going to be difficult for you or any other real estate investor to go as high as what they’re asking. Say that you’d like to close the deal quickly if the seller could only just bend a little. This will cause the agent and seller to get freaked out that this deal may drop out - likely causing them to bend more easily to your wishes.

The agent, although legally working for the seller, is also worried about their own financial well-being. Subconsciously, agents know that in the end, they work for themselves. If an agent working for a seller feels that the seller will be more likely to acquiesce and cave in to deal pressure than you would, then the agent will likely push on the seller to hopefully take your offer.

The nickels-vs-dimes strategy and the anxiety strategy all work in your favor to get you the best deals possible - whether you’re investing in real estate or purchasing a car second-hand. These are negotiation tactics that will work to your favor - but you have to be willing to use them! Some would-be investors and buyers read about negotiation strategies but when push comes to shove, they bend over backwards to accomodate the other negotiating party and forget everything they learned. If you apply these tools, you will get a negotiating edge. Practice these tools whenever possible and they’ll become second-nature to you - helping you save major money on your investments and negotiations.

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The Debt Destruction Technique: Destroying Debt One at a Time

Michael Emilio — Thu, 30 Oct 2008 17:54:28 +0000

Like any large undertaking or goal in life you need a plan. A pilot would never take an airplane from Miami, Florida to London, England without a specific plan in place to get there. Neither should you go ahead in life without having goals and plans - especially if you have a goal of financial freedom in mind.

If you’re in debt currently, debt didn’t just happen to you overnight. It was a process that took time and involved specific action steps which eventually resulted in the debt you’re now facing. Just like how you got into debt is the way you’re going to get out of debt - with a specific process.

One of the most important steps for you to take in order to overcome your debt is to organize all of your debts together in a pile. This means grab all of your loan paperwork, mortgages, credit card bills and any other debt which must get paid. Take a look at that pile and realize this is what is keeping you from a future of financial independence - and removing this pile of debts from your life is your key towards achieving that future.

Take all your debts, write a detailed account of them, and find out which debt to pay off first. The way you will do this is by creating a form for yourself with the following information from each of the debts that need to be paid - this will be your Debt Destruction Technique (DDT):

Name of Debt: This is the entity that you owe this money to.
Balance Total: This is exactly what you owe total for that particular debt.
Minimum Monthly Payment: This is the minimum amount that needs to be paid for this debt per month.
Payment to Debt Ratio: You get this number by dividing the Balance Total of the debt by the Minimum Monthly Payment. For example, if the Balance Total is $6,000 and the Minimum Monthly Payment is $500, then the Payment to Debt Ratio for this debt is 8.33.
Debt Importance: You get this number after you complete the above 4 steps for each of your debts. The Payment to Debt Ratio will guide you in selecting the Debt Importance for each of your debts. The higher the Payment to Debt Ratio the lower the Debt Importance and the lower the Payment Debt Ratio the higher the Debt Importance. You number each debt 1, 2, 3… until you have a Debt Importance for each debt you have. The debt with the lowest Payment Debt Ratio among all of your debts is number one in Debt Importance for you.

Start paying off your debts, starting with the debt with the #1 Debt Importance. Remember The 10% Debt Reduction Plan? In that article we talked about saving 10% of our gross monthly income and using that as our financial bodyguard. Now we’re going to put that money into action. Take that financial bodyguard money and add that to the minimum monthly payment of your debt with the highest Debt Importance. Make the minimum monthly payments on all of your other debts - do not create any other debts. Keep this process going - moving down to the next Debt Importance debt as you pay each off - and you will free yourself from your debts. Don’t let yourself be worried too much with the interest rate of each account. The Debt Destruction Technique will eliminate debt so quickly for you that the interest rate won’t matter as much as it does for those people who constantly just make minimum payments each month. The way the Debt Destruction Technique works is by using positive momentum in your favor - you see your debts disappear so fast that you get pumped and want to keep it going.

Once you’ve paid off your debts, take that 10% of your gross monthly income and invest this money. Whether you’re looking to start real estate investing, stocks, or some other investment, this will be key to reaching true financial freedom. Free yourself from your liabilities and gain assets. Don’t work for money; let money work for you!

Do you remember the old pesticide DDT (Dichloro-Diphenyl-Trichloroethane)? It was a chemical used in the second half of World War II to control the mosquito population that was spreading malaria and lice transmitting typhus. The use of DDT, helped dramatically reduce the incidence of both cases. DDT was later found to be too powerful, affecting other wildlife. But our DDT, the Debt Destruction Technique, will be purely focused on obliterating your debt - resulting in absolute freedom.

The truth is that people in what seems like hopeless debt situations are basically giving away money. If you’re paying $3000 a month in debt payments, you’re losing that money. It’s cash that’s going to be gone for eternity - all to pay for stuff that we think we need. I’ve seen people lose thousands of dollars in a matter of minutes at the casino, pay hundreds of dollars in bills for alcoholic drinks at nightclubs in South Beach, and overreach themselves by purchasing homes and cars that they truly cannot afford. But they do these things because they think they need to do these things - whether due to peer pressure, lack of financial education, or poor spending habits.

When doing this plan of using 10% of your gross monthly income and applying it to your highest Debt Importance debt you’re going to feel good when you finish off a debt. Real good. In fact, you may even be tempted to use that cash to treat yourself to something nice, because you know, you paid off a debt and why not? Resist the temptation! Do something else to reward yourself - maybe taking a trip to the beach, going to the museum, take a nice walk, etc. In the Debt Destruction Technique you must use your 10% and apply it towards your debt each and every month until all of your debts are paid off. Then you take this cash and apply it for investing purposes. You need to understand that the only way you can have the freedom and security of financial independence is by paying off all of your debt. This is the only way to escape the vicious downward spiral of the debt cycle.

By paying your debts using the Debt Destruction Technique, you’re taking money that you’ve pledged to your creditors and debtors and eventually you’ll have this money back, available for investments that will take you to financial freedom! Instead of wasting this money on bills and interest, you’ll be able to invest in your future. With the power of real estate investing and compound interest, there’s no doubt you’ll eventually have the opportunity to become net worth millionaires and more - you just need sound strategy and sensible discipline. Think about that - people can go from the brink of bankruptcy or beyond all the way to becoming multi-millionaires. The path is simple - it just takes desire and discipline, but it can be done!

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Focus on Profit: Accepting Counter-Offers and Trusting the Seller

Michael Emilio — Fri, 24 Oct 2008 01:04:51 +0000

Negotiation is one of the biggest keys to success in real estate. It’s also the skill that’s going to make you the most money you could ever hope to make per hour in a traditional job. Think about it this way: If by negotiating you can save $5000 in half an hour when buying investment property, then you just made what would be equal to a hourly wage of $6000 an hour. I challenge you to think of any career that can pay that much! This is why expert-level negotiation skills are critical for success in real estate investing. Some other investors may have more capital than you have. Some other investors may have more networking connections than you have. But if you have master-level negotiation skills you have an advantage over 90% of the people you’ll find in business and investing.

When making an offer on a property, the most likely scenario is that you’re aren’t going to get your first offer accepted. Of course, there’s always the chance that the seller is going to accept the first offer. But usually you’ll be receiving a counter-offer shortly.

I’m going to break off from the traditional negotiation mindset right here - and there’s going to be some sales gurus disagreeing with me on this one. A lot of sales trainers and real estate investing instructors teach that when negotiating you should have a “Scorched Earth” approach. This means that you go for broke - you negotiate everything and you squeeze everything you possibly can out of the deal, no matter what. Including items like the rusted mower in the backyard, negotiating the stinky sofa and including it in the contract, etc.

I disagree with the traditional negotiation mindset of getting everything possible no matter if the deal goes bad. It’s a matter of mindset and priority. Your mindset should be to get this deal done quickly and fairly. Your priority should be on getting the best price and terms possible for the circumstances available to you. Get a great price and terms and just buy those items yourself afterwards! If you’re getting a great deal on the investment property (good rule of thumb is at least $25,000 of profit) then do the deal and forget the other junk around the house. Don’t get your priorities switched around and end up losing a profit of $25,000 over silly negotiations that amount to $3,000.

When making an offer on a “hot property” (one that will sell fast due to great price) and you get a counter-offer that’s acceptable, then you’re going to usually want to accept the counter-offer. Of course, you’re going to want to run the numbers and make sure you’re getting a great profit. But if you are, and you have good terms even with the counter-offer, then go ahead and accept the counter-offer. The worst feeling in the world is to have wanted to do something but because you hesitated you lost out on the opportunity. Real estate investing is the same way. When an opportunity presents itself - like a great counter-offer on a hot property - accept the deal and keep your profits coming.

When negotiating, remember you’re dealing with human beings, not some sort of emotionless negotiation robot! People have emotions and don’t like to be made fools of! If you’ve negotiated a great sales price, but you continue to hard negotiate trying to squeeze out an extra $1,500 for bathroom repairs, for example, the seller may likely become upset and will angrily cut off all negotiations with you. Another investor comes along with a good attitude and a nose for profits and will snatch that property right from under your nose. When you get a deal that’s going to get you good profits, just sign the deal right there and get it done.

Just like some sellers may get upset by hard-nose negotiation strategies there’s going to be some sellers that may get upset by a seemingly “untrusting” nature. During your real estate investing deals, you’ll inevitably come across individuals that are “handshake people”. You often come across these people when you begin to do owner-financed deals, such as no-money down investing deals. They often refuse to sign a written contract for items such as financing. They may say things like, “I’m a man of my word, we don’t need a contract.” It’s a big risk to just shake hands on the deal without a written contract. What if they sell to someone else a day later? This is when your gut and intuition come into play. Do you feel this person is faking you? Then do as much as possible to get it in writing or just back out of the deal and let someone take the risk. Do you feel this person is genuine? Then don’t press them on a written contract if the terms and price are good. Most of these “handshake people” would be insulted if you press them on signing a contract. Of course I’ll always advise you to do everything possible to get the contract in writing, but if you feel it’s the only way to get the house closed, you may have to take the risk. 99% of the time, you’re going to want a written contract of everything. At the very least, send this person an email stating, “Just to confirm that we agreed to do ________ yesterday.”

These items I’ve touched on with you are common in real estate investing. One of the great joys of investing is that we are in close contact with people on a regular basis, but that in itself brings along its share of challenges. Just keep working your negotiation strategies, work with people as partners and not as adverseries, and investing will pay off huge dividends for you.

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The 10% Debt Reduction Plan

Michael Emilio — Mon, 20 Oct 2008 18:18:02 +0000

Let’s face it: There’s almost no way to realistically pay off all of your debts by consistently just paying the minimum monthly payments.

However, if we can pay the minimum monthly payment on all of our debts and also add some extra money to help pay them off, we’re going to see results.

Here’s a proven debt reduction plan that’s going to give you results if you consistently place it into action. It does require some discipline but you’ll see that the positive momentum from the way you’ll be reducing debt will give you fantastic results.

First step you’re going to want to do is to take a detailed look at all of your debt and add up the minimum monthly payments together. You need to know where you’re at right now in terms of debt. Yes, it can be scary to find out exactly how much money you’re spending monthly on just your debt. But you need to have this information in order to get a firm grasp of the immensity of your financial challenge. Notice the word I used; challenge. You have to think of this like a competition: you vs your creditors. Are you going to let this debt take over your life? Or are you ready to implement a debt elimination plan that’s going to reduce and eventually eliminate your debt from your life? If you’re ready to take this step, even if it means some sacrifices in the short-term, then get ready to look forward to a life in the future with financial freedom.

My debt elimination system is followed by adding 10% of your monthly gross income to the minimum monthly payments you make to creditors.

For example, let’s say you make a monthly gross income of $5,000 and you make a monthly minimum payment of $2,000. By using this system of adding 10% of your gross monthly income, you will now pay $2,500 total ($2,000 minimum + 10% of $5,000 which is $500).

One of the most important points to take away from this is that you don’t want to just add this 10% to the whole minimum payment you have to make per month. You want to strategize this by using this 10% ($500 in our example) on the debt that you can get rid of the fastest. This has a psychological benefit - you develop positive momentum of reducing your debt, you feel good about one less debt on your back, and you see results fast. Quick results mean you’re going to much more likely to stick with this quick debt-reduction strategy.

This 10% is a magical number. This 10% is your financial bodyguard. Just like how multi-billionaires and celebrities have a bodyguard, you now have a financial bodyguard working hard to fight off your creditors. This 10% will not stop until it gets the job done, which is eliminating your debt. As long as you keep feeding that 10%, you will destroy your debt - utterly and completely.

Yes, when I say gross income I do mean gross income and not net income. You might ask what’s the exact difference between gross income and net income. Gross income is what your total personal income is before taking taxes or deductions into account and net income is your total personal income after deductions, credits and taxes are factored in.

This next option is only for dire financial cases. If you absolutely cannot pay 10% of your gross monthly income to your debt payments, then at the very least devote 10% of the total of your minimum payments to pay off your debts. So, in our example, you would pay the $2,000 minimum monthly payment plus an extra $200 (10% of $2,000). This is only for a short-term period until you get your finances in check. As soon as possible, switch over to the 10% of your gross income debt payment plan we outlined earlier in this article.

Like any battle, you need to have a plan in place to attack the enemy. In this case, we’re taking the offensive on debt. You can’t just keep paying the minimum monthly payments on your debt and expect them to magically vanish or hope that you somehow hit the lottery. You have to take action. I’ve given you a plan to attack your debt directly. It’s up to you to work the plan.

Try my debt reduction plan and let me know how it works for you!

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Beating the System: Getting Exclusive Deals and Networking to Success

Michael Emilio — Fri, 17 Oct 2008 21:39:39 +0000

When investing in real estate, whether you’re looking into residential investing or commercial investing, many times properties listed on the MLS (Multiple Listing Service) may not be ideal for you. Don’t get me wrong, you can find some great deals on there. But there’s going to be times you want something very exclusive. Maybe you’re looking into investing in luxury properties, which often don’t show up on the MLS due to privacy concerns. Or maybe you want to invest in commercial real estate which may not be listed because the owner doesn’t want customers to know he’s selling the business. This is why you need to have a top real estate agent on your team to get you those deals hot off the MLS - sometimes even before they appear.

One of the snags of properties that are listed on the MLS - especially recently listed properties - is overly-inflated listing prices. When a seller is listing their property, the property owner is going to call multiple real estate agents and interview them. The agents will then visit the property that the owner is looking to sell and give the seller a round-about market value price that the property may sell for. Most agents are honest and will give a true market value on the home. There’s always going to be those agents that will quote a higher than market value price just to get the listing. When the seller hears this inflated price they may list with this agent with images of dollar bills dancing in their mind’s eye.

If you’re selling your home, be aware that these agents quoting a higher than market value price for your home are hoping that your property can sell for that price out of sheer luck or they hope to eventually bring your listing price down eventually. This is why if you’re a seller, do not get distracted with dreams that your property will sell for much higher than market price. Obviously, not all real estate agents are built equal - some agents have better negotiation skills and some agents have better marketing skills. These skills will likely bring you a higher price. But if three agents have told you the value of your property is $200,000 and one agent comes by and says he can sell it for $400,000, think twice before listing with that agent.

In order to beat the real estate system as a buyer, you need to establish relationships that net you the most exclusive investing opportunities possible. You need to have a real estate agent on your team and keep this agent interested in continuing in doing business with you on a long-term basis. This gives you massive opportunities for incredible real estate investing deals.

Once you’ve established these relationships with real estate insiders, you’ll be getting a fair share of investment opportunities. A key point is that when you find yourself with a prime investment property on your lap, don’t just sit by, “run the numbers” a million times, and let time pass. If you see a great deal, close it. If it’s that great of a deal, you may not even want to negotiate or bargain with the owner, just lock the deal up with great terms (no contingencies) and offer list value or even slightly higher to make sure you get the deal. This is part of our Real Estate Startpoints - be quick to jump on prime investments when you find them.

As we discussed in the article The Realtor Search: How to Find and Keep a Real Estate Agent, you need to concentrate your investment focus on a particular area and get a real estate agent that knows this area well. This allows you to jump on investment openings quickly, before other investors jump in before you. For example, a For Rent sign comes up on a great property. Call the owner up and see if the homeowner may be interested in selling that property to you. This almost always assures you of being the only person bidding on that property and submitting an offer - this gives you a huge negotation advantage if you’re the only person submitting purchase offers. Maybe the homeowner is an elderly person tired of managing the property and wants to retire in peace - this is a perfect chance to get a great deal. The point is to become an expert in your target investment area, as soon as a For Rent or For Sale sign comes up, you should be first in line to find out the details.

In every career, networking and action are the keys to success - investing is not an exception. Networking is key because this is how you get those amazing “insider deals” that many people don’t know about but you get first crack at due to your connections. Action is essential because you need to act without hesitation if you find a great property - run the numbers and if it all looks good, then go for it. So many opportunities are lost due to inaction - in real estate investing and in life in general. Network yourself, take action, and take control of your financial future.

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How to Escape Your Mounting Credit Card Debt Financial Situation

Michael Emilio — Mon, 13 Oct 2008 22:05:41 +0000

Like we talked about in our previous post Consumer Debt Worst Offenders: Banks, Advertisers, and Advisors, there’s a lot of financial entities out there more than willing to help you part with your money. It’s big business and consumers are getting hit with the worst of it. So what can we do to not be a financial victim?

The best option is always prevention. The easiest way to live free of debt is to not get into debt in the first place. Even if you’re already up to your neck in debt, there are ways to climb out and ways to reduce the amount of debt you currently have - you just need to have the right strategy.

Always pay the full balance of your credit cards each month when you receive your credit card statement. Otherwise, don’t use your credit cards! If you think you’ll be unable to pay the balance off in full when you get the statement in the mail, then you don’t need that item or service you were thinking of buying. If you think you won’t be able to pay off the balance yet you still feel that pressure inside you wanting to buy that item ask yourself what’s more important, your financial future or more stuff in your life?

If you aren’t disciplined enough yet to be able to pay your full credit card balance each month and not spend more than you can a month on credit then there’s only one option for you. Grab a scissor, take all your credit cards, cut them into miniature pieces, and throw them in the garbage. Just keep that one emergency credit card mentioned in the previous article and throw out the rest.

If you’re deep in debt, you know you won’t pay off your balances each month, yet you don’t want to cut up your credit cards then the reality of the situation is that you’re heading straight down the path to financial disaster. You have to be able to stop this vicious cycle of credit card indebtedness.

The way to getting control of your credit card spending is to learn to associate your present negative financial situation to the virtual slavery of credit card debt. Take out your wallet or purse, pull out all your credit cards and lay them out in front of you. Realize that these credit cards are like keys locking you into a virtual cage of financial prison. Visualize all the negativity that these cards have brought into your life due to faulty spending habits. Remember the debt that these credit cards have caused; remember the huge monthly payments that seem to keep growing and growing. Grab the nearest scissor and cut these cards up. This is the first step toward financial freedom.

Once you’ve destroyed your credit cards, find yourself a no-fee credit card with great rates so you can start on your new financial strategy of Pay-It-In-Full. Now you can transfer as much of your old credit card debt into this new card and take advantage of the usually very low fees for the first year or so (sometimes you can even find no interest credit cards that offer this for the first twelve months). This can significantly drop your credit card monthly payments and allow you to start paying down the total balance as well as everything you used the card for in that month. This allows you to pay more of the principal and less of the interest. Just be aware that this is a true transfer and not a cash advance which usually carries high interest rates.

There are also many credit cards out there that offer great rates if you use that company’s services or products. For example, the Health Care One Mastercard allows users to save from 20% to 40% on health care and physician visits, the Amazon.com Rewards VISA Credit Card gives you points that can be redeemed for gifts (including flight tickets, airline miles, hotel stays and more), and uStudent Credit Cards offers credit card matching for students to get credit cards that meet their needs.

Cashback bonuses can also sometimes be a big incentive to use a particular credit card that you know you’ll be paying in full anyway when the statement comes. The Discover Business Card gives you 5% cashback bonus on office supplies, 2% cashback bonus on gas and up to 1% cashback bonus on all other purchases. Another credit card with an interesting premise is the Discover Motiva Card that pays you a full month’s interest for paying ontime and with no annual fee.

Whenever you’re applying for a credit card make sure to read the fine print and never sign up for a credit card when you don’t understand the terms. Call the company and find out directly from the company representatives.

Bottom-line in improving your credit card financial situation is self-discipline. Only order a new credit card when you’ve paid off your old ones via balance transfer. Once you’ve done this, cut up the cards and cancel the account in writing with a subsequent phone confirmation.

Keep yourself disciplined and you, not the credit card companies, will be in control of your finances.

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The Realtor Search: How to Find and Keep a Real Estate Agent

Michael Emilio — Thu, 09 Oct 2008 23:06:37 +0000

To make any sort of real estate transaction, whether you’re looking to invest in luxury real estate, buy your dream home, sell your commercial property, or rent an oceanfront condo you’re going to want to find yourself an excellent real estate agent. A top quality agent will save you massive amounts of time in your searches, save you money when you’re buying, find the optimal listing price, market your property for a quick sale, and bring passive income producing real estate investment property directly to you - saving you big headaches and netting you big profits.

Finding Your Realtor

Let’s say you’re investing in real estate and you know of a particular neighborhood you’ve targeted for investment purposes - this is your target area. One simple way of selecting a real estate agent to work with you is by just driving around the area and looking at the For Sale signs that are up. Find out which agent has the most listings in the area and choose that Realtor. Another way to find a Realtor is by asking a friend that’s used a particular real estate agent and that’s had a positive experience. Another way to find an agent is by using your favorite internet search engine. For example, if you’re looking at buying or selling a small business you may want to do a Google search for small business real estate agent.

Once you find a real estate agent you’re interested in working with, send an email to this Realtor with a declaration that you are looking to purchase investment real estate property in that particular neighborhood or area. Be specific. If you would like fixer-upper homes, mention that in your email. If you want to flip homes (by purchasing, renovating, and then reselling) then make sure to write that in your email. Once the agent receives your email, it’s now understood by the agent that not only are you interested in purchasing investment property, you are also interested in then selling these properties once fixed up. This means double the profit for the agent - the buying commission plus the listing commission.

If the agent has a land address (whether the office or a p.o. box) you may want to print out this email and send directly. Include a business card with the letter. My suggestion is that you purchase a magnet business card. This is a business card that has a magnetized back so the real estate agent can put this card on the refrigerator or any metal surface. This magnet should contain information as to the particular neighborhoods and homes you’re looking to purchase. You might put a tagline such as, “Interested in flipping fixer-upper homes in the Little Havana neighborhood”. Make sure to put all your contact information, including phone number, full name, email address, and postal address. If you do not send this magnet to the agent via postal snail mail, then at your first meeting with the agent make sure to give this to the agent in person.

To show your professionalism, make sure to attach a letter from your mortgage broker that states that you are already prequalified to purchase homes in the average price range of the area you’re interested in. Either put it in your envelope if using postal mail or scan it and include it as an attachment if emailing. You may also want to allow the mortgage broker to put some advertising about his brokerage in the paperwork. This will not be hard to do as mortgage brokers will love to do this for you - the reason being is that this means future business for them! At the same time you’re giving the impression to the real estate agent that you’re really serious about investing and that you can really close a deal, anytime, anyplace.

Whenever you buy or sell a property, be sure to let this target real estate agent know with an email. In the email make sure to let this agent know you’re still interested in finding investment properties in your target area. This will show the agent that you’re serious about what you do in the investment world and will move you up higher in the priority order.

Hook your target agent by listing with them. Let’s say you’re looking to sell a property, you find a real estate agent that’s an expert in a particular neighborhood you’re looking to expand your investments into, and you don’t have a reason to list with another agent. Give this listing to the target agent. There’s no better way to get the attention of a target agent than this! Even if you think the house would sell FSBO (For Sale By Owner) you list with this agent in order to establish a business relationship. After all, if this agent brings you bigtime investments in your future, isn’t it worth giving them the commission? It’s worth it in the long run.

Give the real estate agent a list of your preferred local outsourcing people. Let’s say you a great painter, carpenter, and handyman in the local area. Give a list of these people with full contact information to the agent. Tell the agent that you’ve used these people in the past and that you personally recommend them. Tell the agent to mention your name if the agent uses them. This is useful to the agent because properties listed by sellers often need work done and a quality repairman is often needed last minute. This is useful to you because the people you’re referring will become very loyal to you due to the referrals. Let’s say they got a phone call about a house needing a repair from a first-time caller. But then you call a few minutes later and you say you need work done also. You’re going to be getting preferential treatment because of all the great referrals you’re giving them. On top of this, they’re very likely to give you a preferred rate and will go out of their way to please you by doing an excellent job.

Now, you don’t want to do all of this with every single Realtor you come across. These steps I’ve given you are to be done with a select few of agents, perhaps a handful, that you would like to be a part of your investment team going forward. They’re committed to your success, and in the same way, you’re helping them succeed as well.

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