In a perfect world we could have all of the benefits of rental property like cash flow, equity accumulation; wealth building without the one big headache…tenants! Are you like me, sometimes I feel that when some people become tenants they lose all ability to think for themselves. And why is that the toilet seems to always overflow at 11 PM?

That’s why I have been looking for something to replace rental houses (because I couldn’t figure out a way to get someone to pay me rent, but not actually live in the house). I think I found the rental property for the perfect world!!

I am talking about self storage units. I recently met a guy that has focused his entire portfolio on self storage units and he told me: “The self-storage industry has been the fastest-growing sector of the United States commercial real estate industry over the last 30 years, and it continues to grow at a steady pace. Nearly one in 10 U.S. households are actively renting one or more self-storage units.”   That’s why I have been so interested. It’s an expanding market with plenty of demand already.

Even Inc. magazine recently said that self storage is one of the best industries for starting a business right now and 90% of them are owned by small business entrepreneurs. This is not one of those industries where only the big-boys get to play and make money.

The wonderful part about self storage units is that you don’t have all of the typical tenant hassles. Sure, technically your customers are “tenants”, but they don’t live on the property. There’s not much that can go wrong when you’re just renting 4 walls with a large door. If the tenant doesn’t pay, you don’t have all of the eviction issues. You simply wait the prescribed time in your state and then you sell off their stuff.

The cash flow is significant and you can pick up properties from motivated sellers just like you can with regular Single Family Houses and make even more money.

I’m going to do some more investigating, but this sure seems like the right way to go to build cash flow and equity. What are your thoughts on self storage units? Are you interested too?

You can’t blame the seller. After all, they have a personal and emotional attachment to the property, but it can be frustrating when you are trying to purchase an investment property and the seller just isn’t in touch with reality. The price is inflated. The contingencies are ridiculous. And they just won’t come to the table, let alone answer their phone! It’s supposed to be a buyer’s market, right? Yet here you are, doing an uncomfortable tango with a difficult seller. Other than turning your back on a desired property, what else can you do? Here are some suggestions for negotiating with difficult or unrealistic sellers.

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PUT ON YOUR BEST FACE

Yes, it’s a buyer’s market. And we’ll get to that in a moment. But initially, you have to engage the seller. If the seller is represented by an agent, treat the agent with respect. Try every phone number for the agent that you can get your hands on. If you can’t reach the agent, leave clear and detailed contact information for how the agent can reach you. Call daily until you reach him or her, leave one message each time, and always be pleasant and respectful. – no matter how long it takes.

If the seller is unrepresented, do the same thing, but with the seller. Don’t get pushy or demanding. Offer to meet the seller at a time and place convenient for him or her. Offer to drive to a workplace or restaurant. If you go to a restaurant, pick up the check. You’ll be asking him or her to pick up a lot more than that, so it’s a small price to pay to initiate some goodwill.

BE A GOOD LISTENER

It’s starting to sound like dating, isn’t it? And negotiating with sellers is a little that way. Start the conversation by asking a lot of questions and listen to the answers: “Tell me about your property; what are its best features? Why are you selling?” If it’s her or his primary residence, ask “Where will you be moving to?” Make note of some key points, like: (a) Value the property features that are held dearly. Build rapport this way. (b) Put together a deal that helps the seller solve her or his reasons for selling. Make price less important in the negotiations by showing the seller how working with you will help them to achieve their goals better and faster. (c) If they are moving, do some homework on their behalf. Get some information about their desired new home turf. Refer them to a trusted agent in the area who can help them find a great deal. Show them why this makes so much sense – they’ll be able to get a great price on a home in an area where they want to live.

DO YOUR HOMEWORK

Gather and study as much of the following as you can: (a) comparable property sales in the area from the last 3-6 months, (b) inspection report, (c) appraisal, (d) survey, (e) seller’s disclosures, (f) area market values and trends for this property type, and any other information that may be pertinent to negotiating price, contingencies, and other contract details. When building contingencies into the contract consider contract stipulations that respond to the seller’s needs – from when you were listening earlier – to show that you are constructing a deal in their best interest. When you meet with the seller or the agent, point out this language in the contract, and bring all the supporting evidence for your contract decisions, including price. Let the documents and contract language do the talking. Don’t get defensive, combative, or pushy. It’s now time for the seller to get realistic and not emotional. Your negative emotions will sabotage the process and prevent that from happening. So, make your best case and leave it in their hands. If you don’t hear from them and the response timeframe is drawing to an end, place phone calls as you did above and try to discover what the sticky points may be, or if they just need more time.

While it’s a buyer’s market out there, sellers are human, too. They love their properties, and have many warm memories attached to them. They are frightened of declining values and wary of low-balling hucksters. You’re in the driver’s seat, so be relaxed, friendly, patient, and understanding. With a gentle approach, considerate negotiations, and honest realism, sellers will eventually come your way rather than heading for the door.

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One of the fundamental precepts we hold in our business is
creating multiple profit centers.

Simply put, create money coming in from as many directions
as possible without setting up multiple businesses.

Prior to having the power of the internet this was tricky to achieve.
The diversity in my portfolio consisted of wholesale properties;
rehab properties; and rentals and lease option properties.

The proliferation of the internet across America…across the world
has changed all of that. We are now able to reach a vast population
quickly, inexpensively, and almost automatically thus opening an
array of new income possibilities.

Here are five different ways that with an online real estate business
you can generate $5,000 a month each.

(1) The Conquer & Control Technique: Wholesale properties and never
buy. Control and sell your controlling interest. No loans.  No rehab.
No risk. An average deal earns $10,000, so just do 1 deal every two
months.

(2) Sharing “Their” Wealth: With a national list of investor buyers (which
you built on the internet) you have the power.  Offer to market other
wholesalers’ deals to your list for half the profit when your buyer closes.
Many people have  deals and no buyers. This service is a no-brainer
for them.

(3) The Guru Gravy Train: The buyers on your list love all things real estate.
Become an affiliate sales person for respected programs and resources and
offer these to your list and receive one half of the sales with none of the work.

(4) The 90 Minute Work Week: Simplest money you’ll earn. Invite your list to
listen to respected educators on real estate topics. Allow your speaker to sell
their product and again you receive one half of the sales with no further effort.

(5) The Boomerang Effect: Offer the various monthly membership programs
available to your clients. These are low priced sales, but the cumulative
recurring effect is spectacularly profitable.

Notice that I didn’t even discuss rehabs, rentals, commercial properties,  
or self
storage which are all other ways to bring into money to your empire.

The opportunities are abundant once you have your basic business operational.

By leveraging the power of the two greatest wealth builders of  our time – real
estate and the internet your profits will grow exponentially with minimal impact
to your time and money resources.

Expect abundance,

Lou Castillo & Josh Brown

Life’s to short to do anything that you don’t want to do! I saw this short video last week and I realized that the creator (Gary Vaynerchuk) and I think alot alike…this video is a great watch. Check it out, then click the “like” button and share it with your facebook friends. They’ll thank you for it!

- Josh Brown

I watched this video today on TED.com and thought it was very interesting. Checkout Tom Wujec’s explanation on what makes a good “team”.  After all, your business team is one of the most important things you need to develop right?

Josh Brown

P.S. Happy Memorial Day – Be safe. Have fun!

I recently saw this video from Tim Ferriss (author of ‘the 4 Hour Work Week’) give a talk about dealing with haters…I thought it was brilliant. Watch it and let us know what you think.

Tim Ferriss keynote The Next Web Conference 2010 – Love the Haters from Boris Veldhuijzen van Zanten on Vimeo.

Is real estate still a good investment option in this market?

Can you still make money wholesaling properties?

Are investors still buying properties?

The answer to all these questions is absolutely YES! In fact this is one of the best markets we’ve seen in a long time for making money in real estate. There are more motivated sellers than ever. Properties that were too high priced before to cash flow now make great rentals. And the savvy investors realize that we are approaching the bottom of the price fall, which means now is hte time to start acquiring properties and take advantage of the appreciation which will soon start.

Wholesaling is a great strategy to follow whether you are brand new looking to create a profitable business, or you’re a rehabber looking to find more great properties; or you’re trying to build your rental portfolio.

A Wholesaling business can easily provide multiple high dollar profit deals a month which in turn can fund a rather substantial marketing budget (in addition to the money you put in your pocket). As your marketing grows, so will the number of great deals you contract. As a rehabber you can pick and choose the best ones for you in the area of your choice. You will never again have a down period where you don’t have a property to work on. As a landlord you’ll find many properties you can pick up in rent ready condition that will provide not just a positive cash flow, but also signifiant built-in equity.

I have always used my wholesaling business as a means to keep both my rehab and my rental portfolios full; not to mention how nice it is to have siginicant cash coming into the business every month.

One of our clients wanted to focus on creating a huge rental portfolio. I advised him to set up  a marketing campaign to drive leads; select the deals he liked (especially those that you can by subject to the mortgage) and to wholesale the rest to create additional cash flow.

In his first year he acquired over $2 million dollars of real estate in his rental portfolio comprised of houses under $175,000 – all with positive cash flow. He also earned $70,000 in wholesale profits at the same time!

If you’re not wolesaling properties – you’re missing the boat – a huge cash boat!

Expect abundance,

Lou Castillo

Do you know exactly what each dollar in your business is spent on?

Do you know each month what money you have coming in and when?

And what money has to be paid out?

Do you have a system setup that brings in a predicable cash flow to
cover your operating costs?

If you answered “NO” to any of these questions, you need to go
below now and start managing your cash flow. You will get a clear picture
of what is happening in your business and allow you to better manage your
funds and grow your business.

Most people run their business in terms of profit and loss. The problem
with that is it is possible to make a profit and run out of cash. This
occurs when the profit margins are not significantly higher than expenses;
or when revenues are not consistent (yet your expenses are).

Your business may incur expenses every month, but revenues may dip for
a few months then soar for a month or two. A Profit & Loss (P&L) statement
for that time period may show a profit  – in other words the revenue finally
exceeded the expenses, but Without sufficient cash reserves the business
may not survive long enough to reach the high revenue months!

You also have fixed costs and variable costs. Fixed costs are those that occur
every month regardless of your volume. Variable costs are those that vary
according to your volume.

As you look at your different sources of income structure your portfolio
so that your regular recurring revenue components cover your
monthly fixed expenses.

In our business, we periodically review a list of our monthly expenses
to see what can be eliminated. Just last month, we realized we were spending
$1,147 on things we no longer needed or used.

It’s a small percentage of our total expenses, but that cash can now be spent on
marketing to generate more business without adding anything to our bottom line!
We kept our expenses flat, but increased our revenue!

However, as we told a couple of our private mentoring clients just this week,
the one expense that should never be reduced or eliminated is marketing.
Without marketing you have no business. You can manage your marketing costs
for effectiveness, but never stop marketing!

By increasing your revenue sources and managing your expenses you will not
only have a more profitable business, but you will improve your cash flow.

In our business we practice multiple streams of profits. We don’t rely
on any source of profits, but rather set up multiple methods. And we keep all of it
within the same business model so we achieve maximum leverage between the
various streams. YOu could separate business models running, but then you
achieve no synergy between the businesses.

Most importantly, we have a system that generates enough revenue every
month to cover our base fixed operating costs. Just one aspect of our revenue
funnel takes care of rent, utilities, marketing, payroll, etc. Any additional
revenue throughout the month is gravy (less any variable costs)!

Managing cash flow is simple and easy and can make a BIG difference to your
business! Once you master this concept, watch your business grow!

Expect abundance,

Angelina Brown
Chief Financial Officer
Investor Riches

Watch this entire video. It’s 100% content and will tell you exactly how you can start dominating the internet with video…EVEN if you don’t have a website!

- Josh Brown

P.S. Please also tell me what you think or share any resources you use below…

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just added…
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In response to a post below…

Brian, here’s a pic of one of the light’s we use. It’s  Smith Victor Raven
from Ritz Camera and you can get more details here.