You may recall our last blog, where we mentioned the 3rd Commandment of Successful Real Estate Investing, which is to “Maintain direct control of your investments,” and promised to revisit the topic in more depth later. Well, later is now. Direct control is a critical aspect to creating wealth. It’s a simple concept. Directly controlling your investments means you don’t rely on someone else to do the deal for you. Having a trusted financial adviser is a good, make that great, idea but he shouldn’t also be a broker getting a transaction fee for the deal.
There’s another book you might have heard of that begins with 10 commandments. While AIPIS agent certification doesn’t claim to have the absolute authority of God – if you happen to believe in the Bible – but we do have 10 fundamental truths that will serve you well going forward as either a real estate agent or income property investor. Let’s take the first five.
Real estate certificate courses that don’t teach you how to close sales in the real world are not especially helpful. Selling is a process and it shouldn’t be thought of as a dirty word. The stereotypical used car or time share salesman leaps to mind. This is not the model you want to pattern for long term success in the real estate business. It does no good to browbeat or trick a customer into buying a certain property and then suffer poor word-of-mouth for the next decade and never have a chance to sell to them again as a repeat customer.
Understanding the particular market factors that drive investments is critical. After all, it’s easy to invest. Making reliable, repeatable profits is the tough part. When it comes to income properties, realtors must be able to clearly explain to potential clients exactly what makes the process work because, for many people, income property investing is a vaguely understood concept at best.
One definition of “cabal” is a “conspiratorial group of plotters.” So is Wall Street and the media machine which supports it a cabal? Maybe. Call it what you like, but the truth is AIPIS realtors find themselves facing off against the industry when it comes for the battle over investors’ mindshare. The product of choice for AIPIS professionals is income property investment, which runs parallel to the stock market but without the accompanying advertisement or vast marketing behemoth pushing it along.
The Wall Street advocate industry has done a pretty good job of squashing the idea of real estate investing education. Say the word “investment” in a crowded room and nearly everyone conjures visions of stocks, bonds, mutual funds, and certificates of deposit. The odd duck might think gold or commodities. Perhaps even real estate. And every once in a while you get a real weirdo in the room who is quietly generating a fortune with income property investing.
The real estate industry is undergoing a quiet revolution of it’s own these days and the traditional ways of realtor training are not going to be enough to make a living in the future. To those interested in selling property as a profession, take a look around. Foreclosures are still forcing families out of their houses in droves. These people are renters now and, with tougher lending regulations, are not going to be returning to the buyer’s market soon. Let’s see…more houses on the market but fewer people buying. Sounds like a glut to us and that’s not good for anyone…is it?
Here’s a great little mortgage education tip. The best silent partner of all in the deal is the one who doesn’t even know he is participating. This describes the role of banks when you invest in income properties according to the profitable strategy employed by Jason Hartman and Platinum Properties Investor Network. To be honest, yes, the bank is aware that they have agreed to loan you money to purchase an income property. They are aware of that.
It’s not tough to sell properties during an up market. The average real estate professional could simply show up and make money when everything is going gonzo and, if the market was like this all the time, you might never need an agent certification like AIPIS. But the market gods are not always smiling on your, are they? We’ll take your silence as a resounding “No!” Especially if you’re trying to scratch out a living in barely breathing areas like California or Florida right now.
Most real estate courses cover the basics necessary to earn a license and not much else. You’ll know how to fill out paperwork. Function as a buyer, seller, or transaction agent. Navigate the MLS listings. Stage a property. Maybe market to clients. But there’s something missing. What the heck are you supposed to do when the kids need braces, the bills are due, and nobody is buying houses in your local market?
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