Real Estate Stories that Show You How!

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Lets begin easing you out, I mean, comfort zone! Im going to slowly and methodically give you as many little sparks and insights to the relatively simple ways that ordinary people use real estate to achieve extraordinary results.

Stories are the best spark plugs. They let you casually observe from a safe, secure and understandable view point. I will write to answer most of the questions that I feel I myself would ask if I was reading what you are about to read.

I want you to know something from the very start of this report and that something is this: I care about you and I sincerely mean that. I really do want you to move to a new comfort zone, one that is pleasurable and free from fear. A place where you realize you have the power to achieve greater things than you currently can imagine. Its possible for you to start being a more powerfully directed purpose-driven individual who is well organized and on track to higher achievement. You will change and grow, slowly and steadily with every page you read. With every thought and insight you gain, your desire and courage will grow as well.

Napoleon Hill wrote one of the greatest books of all time. Its called Think and Grow Rich. The essence of that book, the secret it reveals time and again is this: you must develop a burning desire.

Dont put this book down thinking the previous statement is clich and that you already knew that! I am simply leading you to my next point, the next point being is your desire needs a starting point. So to start developing desire, my secret is you must have a purpose. Why do you want to pursue real estate? I know what youre thinking: to make money, to have security, to feel useful and appear successful. Good points. I agree you can have all of that and more if that is what you desire.

Now here is something that comes before any of those things you desire. What is the purpose of all those things? Purpose, purpose, purposeyou need to first define purpose before you get the things. My purpose, or so I thought early in my career, was to move up to a nicer house and have my first house become my first rental property. When I moved up to the next one, I quickly learned as soon as I rented it out, I was in some way responsible for creating happiness and security in the life of another person that was of no relation to me.

It soon was evident to me how the choices I made in choosing that first property either would help me or hurt me in my quest to succeed in the real estate investment business. All of it is cumulative, everything you do and how you do it adds up. It compounds itself and it either makes your life easier or more difficult. I am going to give you experiences that you can learn from that will make your life easier; I am going to show you how. That is my purpose.

The book that gave me the unknowing courage to take my first steps in real estate was a book called How I Turned $1000 into $3 Million in real estate in my spare time by William Nickerson. He was a master story teller and by osmosis, after reading his book, I found myself gravitating towards the real estate classified section of my Sunday paper.

Eventually I leapt and my life had changed. It was an FHA foreclosure, a two-bedroom, one-bath home with a built-in, screened-in pool, with a Jacuzzi and a built-in sprinkler system. I bought it for $46,000 and used the HUD 203K rehab program to fix it up. I spent $16,000 to update and make repairs. They then gave me one loan for a total of $62,000. It took me three months to complete it and I was in; I had done it!

My life changed, I learned, I took the leap. From then on I had confidence. I had already had my first home but now I had two. Well, I was in the Coast Guard and wouldnt you know, three months later we moved. Uncle Sam took me out of St. Petersburg, Florida and dropped me in Kodiak, Alaska, for my next tour of duty.

Well guess what? I was armed with ambition, courage, confidence and just enough knowledge to be considered dangerous, so I bought a duplex as soon as I came ashore on Kodiak Island. Now I had three dwellings and my relationships and responsibilities were growing with my new tenants counting on me to provide a clean, functional and pleasing environment for them to exist in.

It looked like this: My mother rented my first house and an elderly couple rented the second one and my duplex came with an existing tenant who was a hospital administrator, so I was lucky. I was able to ease myself into the role of landlord without getting burned early in my career. I now had two houses and a duplex in the span of about one year. My brothers and some other family members took notice and were pretty well dumbfounded.

They couldnt figure out how I had, all of a sudden, become a real estate wizard.

It felt good to make that change in so short a time.I got that from reading a book! And that my friend is how you are going to do the majority of everything you do in real estate, by reading and taking steps towards duplicating the success of others in a repeatable pattern. The key is to understand that you can do it if you read the right books and apply the very basic formulas that are handed to you.
There lies in: Magic Bullets in Real Estate

This is a common man or womans real estate manual. William Nickerson never gave me anything so easy as Magic Bullets! So I learned trial by fire and it has been very gratifying. Ive since went on to collect 17 properties, 23 tenants, 2 real estate licenses in Florida and Alaska, an assistant appraisers certificate and over a hundred books on real estate. I just kept learning and growing and gaining momentum for the last 13 years. I am still in the Coast Guard, too, and I work at Alaska One Realty in my spare time. In two more years, I will be retired at the ripe old age of 42. Sounds like a sort of fairytale, doesnt it? Dont let me fool you. Its hard work and Im still not a millionaire, but I want you to have the truth, so I will be honest with you every step of the way.

I know why I am not a millionaire and here is why. I would periodically sell property that was going up in value and paying for itself through the rent checks. But being in the Coast Guard would dislocate me every four years, so I found myself selling out in order to avoid being what is called an absentee landlord.

This is an important lesson for you. It has prevented me from becoming a millionaire up to this point. The lesson is: find an area on this planet that you could and will live in, and stay close to it. Dont move more than 10 miles from your farm area. The farm area is where all your properties are located. Long distance land lording is tough! It can be done but you lose the ability to control the situation compared to if you were there. Ive served my country and saved peoples lives, so for me it has not been in vain. I have no regrets but if you dont have to leave your area of expertise, dont!

The networks you build and the contacts you build, in the process of doing real estate, are so valuable that when they are no longer at your disposal, it puts you at a serious disadvantage.

Not to mention when you move you have to acclimate yourself to an entirely different market, build new trust-based relationships and start all over again. Its like a treadmill youll be running and running, however it gets you nowhere.

Ive used it to my advantage. I have been forced to accelerate my abilities to rapidly duplicate my success whenever I am moved, but it is still an uphill battle. My point: Dont move too far from your farm or your network of bankers, appraisers, carpenters, tradesman, real estate, friends, tenants and so on. Once you have the skill you can duplicate your success anywhere you go but if you dont have to goenough said on that!

I like to say, Dont sell the goose to get the eggs. What that means is if you need money to buy more property, use equity lines from other property to do it. You will get the same amount of money or more by using an equity line as if you sold it. However, you get to keep the asset and the money! I go into this in Magic Bullets, so I wont drone on here. Just know you dont have to sell your property to get the cash out of them.

So here we are. You know a little bit about me and you may have picked up a nugget or two. Lets find a few more.

There once was a man who wanted to buy some investment property, so what he did was look at growth patterns. You should do this too, by going to your citys planning and zoning department. You can see growth patterns and you definitely want to buy property that stands in the way of growth.

This is how he used what he learned. He saw that city planners had decided that a new artery (highway) would benefit their city by creating linkage to another city about 100 miles away, so being a smart investor he only went as far as a ten mile limit to be able to be close to his investment.

Now on average, new growth will radiate out from existing prosperous cities in the direction it is planned at a rate of about one mile per year. So our smart investor had a 10 12 year plan to cash out in about 10 12 years. What he did was buy, I believe, 10 acres of commercially zoned property very cheaply because there was no demand at the time. He bought it, fenced it in, put up some lights and a gate, and held onto that little bugger. Now that new highway was coming his way and the good folks, through their taxes, were paying to have it built.

It didnt take long for the heavy equipment to start cutting a swath towards his fenced-in storage facility and when they got close enough to him, he started renting out a secure area for everything, from road cones to generators to backhoes. You name it - it was stored there. This more than paid his land off.

Now the men and their equipment eventually moved on further down the trail but they left a finished highway behind them. And guess what? Low and behold, people started driving on it, and then started buying property to build houses on to get away from the city. Since the new highway was a straight shot into town, ten miles out was breeze.

Well, of course, here comes the herd and everyone is just populating the whole darned area. And within ten years, residential housing surrounds Mr. Investor, and can you guess what hes got? Yep, a prime piece of commercial property, 10 acres large.So in accordance with his 10-12 year plan, he sells his storage facility to make room for the new office/business park complex for over $2,000,000. That, my friend, is vision, and the sooner you get a clear picture of what it is that you want to specialize in, the sooner you can retire to the islands.

How hard was that? Dont tell me you cant do it, you can! Im here to help you. Im going to give you secrets no one else dares. Do you ever wonder why people wont tell you the secrets? Of course you already know this but Ill tell you anyway. It is because they are operating on a scarcity mentality, as though there wont be any left for them. Or if learn something and act on it, you will get ahead and have a great life. Well, misery loves company and silent oppression is the rule.


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Heres a little story that poor quality real estate agents wont appreciate either but Im going to tell it to you anyway. The reason I can tell it is because there are some great real estate agents out there who absolutely dont fear what I am about to tell you and would let you know it if they were in my position.Heres the deal: Some agents want to be like the Wizard of Oz. They want to create the appearance of marketing and transacting real estate as being technical and very legal, a deep dark mystery. Well, its not! The truth be told, you can write a contract on a napkin and it would stand up in court. I will emphasize here that you write on that napkin along with the terms of your agreement, The terms set forth on this here napkin are subject to my attorneys approval.

An attorney will cover you completely for around $750.00. Prices may vary, however that is an average home transaction. There is a lot I am leaving out here but my point is this: If you own property, you can sell it anyway you want. Magic Bullets will teach you. Lets move on.

Exposure is the key to finding buyers and sellers in real estate. If a property is priced fairly and everyone who is looking for that type of property knows that it is in the availability pool, it will be found and the transaction will proceed as advertised. Price it right, advertise it properly and let the lawyer take care of the details. No commission, just a flat fee. Period.

Now that I have that off my chest, I will tell you a story about Dan, a 21-year old friend of mine, and his wife and their new baby. Hes a hardworking guy who does his work without complaint and all the other workers pick on him for working so hard. Can you believe it? The other guys are so insecure and lazy that they make fun of a guy who is doing the work of three men, mainly of the three who are ridiculing him. Well, believe me, this doesnt go unnoticed by me and I take him under my wing. Dan wants to buy a house, so I begin the process of saving him years of trial by fire and save him $25,000 at no charge. That is because he deserved my help.

Anyway, here is the story: I began with him by asking him what type of home he thought he would be comfortable with and a price range. He indicated a 3-bedroom for around $100,000.Knowing what he wanted and knowing the area, I was able to take him shopping for the house he was looking for. Now I always go after the For Sale by Owner homes first because I know they wont be adding any commission figure into their price, because they wont be paying one. So at 6% of $100,000 he will get $6,000 more house for his precious dollar.

I also told him besides the For Sale by Owner homes, we would be looking at oddball discount companies that help distressed sellers further part with their money and property. The mentality of a seller who uses cheesy companies to help them sell their property is pennywise and pound-foolish. If youre going to use professionals, then get a professional.

So off we go. After a day or so, we have found our house. Sure enough, El Cheeso Inc. has a sign on it. The screen doors are flapping in the breeze, the weeds are dancing on the lawn, but this house is indeed a 3-bedroom, 2-bath, 1-car garage with a fenced yard and its selling for $110,000. Well, due to the fact that there is a divorce in progress, and a new girlfriend who doesnt like the place, and El Cheeso Inc. giving no representation, I negotiate for Dan and he gets it for $99,000. Whats so great about this deal is this exact same floor plan in another house was for sale down the street, on the same street, for $25,000 more.

The moral of the story is good things come to those who deserve it, and that is another key to real estate. You must work hard so others will take notice of you and help you succeed.

Heres a beauty for you. This is about being in real estate circles and keeping your eyes and ears open and often times your yapper closed. This is the story of Brian and Julie. Here we have two hardworking souls. They have been married for 20 years and they have weathered the storms of matrimony. Julie works at a real estate office as an office manager. No real estate license, but she works at an office that sells a lot of waterfront property. So we are talking about location and being in the right place at the right time, and here comes a seller in the door of the office stating she is going to sell her older waterfront home. She is willing to take $180,000.Julie tells Brian, they look at it and sure enough, this pearl is right on the water. Shes a gem waiting to be polished up, so Brian and Julie sell their condominium and move in. Well, they arent making any more waterfront property, so Brian goes to work polishing this jewel up.

Now, they have bought this house under market value in an appreciating market. So about one and a half years later, this property is worth over $350,000 and still climbing. Well, Brian is no dummy, so he gets to know his neighborhood. He strolls, takes walks and notices, you guessed it, a vacant, neglected jewel on an inside double lot. He tracks down the elderly lady, who is living with her sister, through the county records office and buys the house, including the extra lot, for a total of $120,000. Now Brian can walk to his new jewel and he starts polishing it. The neighbors start noticing and are amazed at his deal. He has offers of $180,000, $200,000 and $60,000 for just the lot. You name it. Now that the exposure is there, everyone wants a piece of it.

Well, this is what Brian did. He rented his first house out, moved into the second one and used plans that I gave to him to build a third house on the vacant lot, using the equity he accumulated from the first house that went up so much. And heres how this thing shakes out: $180,000 for his first house and its value goes up to $365,000; he picked up the next jewel for $120,000 and he paid cash using the equity from the first house. Now he takes out a new mortgage on his second house for $120,000 and builds a third. The value at last count was $815,000 and he owed a grand total $300,000. Thats a half million-dollar profit in 5 years!

Now what does this story tell us? #1 it says, work hard; #2 keep your eyes open; #3 use equity lines; #4 dont sell; #5 learn how to be a landlord; #6 be in locations that appreciate; #7 buy things that are limited in availability; #8 know how to research owners and repair property; #9 get your partners help (spouse); #10 use knowledgeable friends to help you see potential (I gave him the plans and advised him not to sell anything!).Can you get any more lessons out of this story? Im sure you can. Just read it again and think on it. Jot down your ideas and put them to work. Real estate is not that hard, folks! You can do it. With a few magic bullets, some spark plugs and a good mentor to show you how, you can do it too!

Lets you and me talk for just a minute here, OK! Have you ever been really good at something and been able to step back and see the whole thing for what it is was? You just know exactly how to do it and you can see the end result clearly in your mind before you start. Its predictable to you. Its almost second nature, so you are comfortable doing it. Its almost become boring to you; your comfort zone is such that you can do it in your sleep.

Ive gotten that way with certain types of real estate and I see people everyday that are so afraid of taking the first step that they are literally paralyzed. They make excuses and put it off, and rationalize and live a quiet life of desperation. They dont trust themselves and as a result of the unknown they cant trust anyone else either. This is a vicious cycle because the longer they wait the more it reinforces their beliefs.

I just want to grab them by the collar, take them to the bank and make them tell the banker, Pre-qualify me! Then walk them out the door and show them how to do something that will change their life forever, and that is to buy the first property, and then a second. Then their fear is gone and they grow to be of service to everyone who is ready for their assistance.

Let me tell you this: After you finish reading the rest of this report and you read the Magic Bullets book, your fears will be subdued and you will do something and your life will change. If you cannot succeed with what I am intent on showing you, then something is not right. I believe your desire would be your major obstacle, so if thats the case, read Think and Grow Rich by Napoleon Hill and come back to me then. Lets get back to real estate education, shall we? Do you know who the largest commercial real estate owner in the U.S. is? Its McDonalds Corporation. Yep, and on top of that, they also have the most valuable locations for their type of business. The research they do on demographics and traffic counts is unparalleled!

If you were ever going to open a fast food restaurant, just put it near a McDonalds. You would survive just on the volume of people who flock or pass by the location that McDonalds has already decided meets all the critical data to support their restaurant business. Your restaurant, if you had good food and service, would flourish. Just sell something a little different than McDonalds. Thats leveraging someone elses expertise in evaluating a location for a certain type of real estate.

Now that is a principle and principles are like natural laws. A natural law always works in every situation in its own way. Its like gravity it always works! Here on earth, anyway.

So in real estate it doesnt matter what type it is, whether its commercial, residential, industrial or recreational. Look for signs that serious market studies have been undertaken by major operators and buy things that can flourish in the presence of those concerns.

For instance, lets use Home Depot as an example. If Home Depot decides to build on a site, every residential lot within a mile of that new center will be bought up as soon as the Home Depot commits to build! Why?

Because smart investors know that Home Depot has done the market study and the area will be a prosperous one. On top of that, it will provide jobs, it will pay taxes, it will provide materials to actually build the neighborhoods with, and people will shop there once their houses are built. The same goes for Wal-Mart, Lowes and other smart business concerns.

You may or may not have noticed this but take a look the next time you are driving around. Here is what you should see. As you drive into cities from the suburbs, youll notice donut shops, gas stations with convenience coffee centers, bagel shops, and etcetera, on the side of the road that people travel to on their way into the city to go to work. These are morning activity business centers.
Now on your way home, out of the city, you will see restaurants that cater to the evening meal crowd: KFC, Taco Bell, Subway and Pizza Hut. Thats because people dont go there for breakfast. They get it on their way home, outbound from the city at night. If you put your restaurant on the wrong side of the road, you could be making a huge strategical error. Think!

Location, location, location as they say, are the 3 most important things in real estate. That is a very true statement. With residential property, that boils down to safety, security and convenience. So buy homes in good neighborhoods, cul-de-sacs preferably. No noise or through traffic, no escape routes for thieves, and a private setting, where kids play in the street without getting run down.

Security = close to hospitals, police and fire protection for obvious reasons.

Convenience = stores, gas stations, restaurants, small businesses, parks and recreation and access to major highways to circulate or evacuate if necessary.

You might get a great deal on a piece of properly but if it takes you a half hour to get a loaf of bread. What kind of resale will that great deal offer? Another great deal may back up to or face a busy street. Thats often a poor choice as wellnoise, pollution, the loss of privacy and curb appeal are all factors here.

The two best types of property to buy are:

1. Property that no one else knows is for sale! Why? Because you have no
competition.

2. Property no one wants! You just have to figure out why people dont want it.

If you can turn that lemon into lemonade through some problem solving, that

jewel may just shine because you used the right magic polish.

In real estate, you get paid when you solve problems. That is a fact! Here is a golden nugget for you. If you do this, it will catapult your real estate investment career. I guarantee you will gain more insight to real estate by doing this one thing than just about anything else you could possibly do. The golden nugget is this: Take a real estate appraisal course. It will fly by, a few weekends and its over, but the perspective and the information you gain from the class is priceless. It gives you vision, ideas and understanding. You will have an edge over every other investor who has not done it.

I had an instructor, who by some stroke of luck, I was privileged to be taught by. His name is Steven V. and he is truly a genius. This guy could make millions if he applied himself to real estate investment but he chooses to teach and give back to others in that way. He is very comfortable in life and money is a by-product for Steven. When I finished the class, I had appraisers wanting to hire me to go to work. Now I dont want to work as an appraiser. I just want to think like one and that is why I took that four-weekend course. That class taught me more than both of my real estate licensing courses combined. The reason for that is real estate classes deal with state laws, contracts, regulations and ethics. Appraisal focuses on evaluating real estate and that is what you want to learn as an investor.

A real estate license can actually hold you back from being a savvy investor and heres why: #1 You have to announce to every seller that you are an agent. Its an ethics rule and a disclosure law. Well, now the seller is on guard for all kinds of reasons and you waste precious time overcoming negative reactions. #2 When you go to sell your real estate, the same things apply but add to that scenario the fact that if you make large profits on property that you sell, people can come after you, saying you took advantage of them because of your expertise. And they win!

So you dont need to go to college for 4 years and you dont need a real estate license. What you do need is a guy like me to convince you to go to appraisal school and read books like the one you have now.

Then go out and do it, using a lawyer to protect you every step of the way. Again, here is a good point to make. Simply weave into every agreement or offer you make the following statement: This entire agreement is subject to my attorneys approval. I cant stress that enough. Thats one line of text. That covers it all. It gives you time to investigate deals. It protects your interests and keeps you from getting burned in this business. Here are a couple more beauties that I use to protect myself and you should too.
These are used with initial purchase offers:

1. Willing to pay X amount of dollars or appraised value, whichever is less.
(That says, Im only going to pay so much but if the appraisal is lower than

what I offered, than I am going to get it for the lower price. I dont get

burned!)
2. Subject to my partners approval. (My partner was always my wife, and if she

didnt like it, the deal was null and void, cancelled, over, kaput, finito.)

Now nothing says my partner wasnt my dog, so if theres no fire hydrant, well the deal could be off.

Those are examples of escape clauses that could be abused to the point of being called weasel clauses. Dont be a weasel! They give you a short period of time to have the option to buy something first with the right to cancel the deal, contingent upon something or someone elses decision.

I use them to protect myself and to get a little time to do my research on the property. Dont use them to unfairly tie a sellers hands. Be fair and try to move quickly when you do employ them.
What you are doing is creating a short time, zero-cost option to buy real estate. Here is a little trick and I dont use it very often but it can be used in a fair manner so I will give you the nugget. When you write an offer to purchase property, on the top line of the contract is a line that indicates who the buyer is. On that line in certain cases, I will write my name plus the words or assigns, like this:
Buyers: Dan Auito or assigns

What that word assigns does is this: it allows me to sell by assigning my right to buy the property to someone else. Dirty dealers will take advantage of people with that word if they can get away with it.

Heres where I would use it. In real estate, a lot of bargain hunters look for distressed property. You know, the fixer-uppers, the abandoned, condemned, fire-damaged stuff. I go a step further and look for distressed sellers such as death, divorce, relocation, but a lot of times I dont specialize in that type of property.

Thats OK because if its a steal and I get it for 40 50% off, I will assign it to someone who does deal in that type of property and make a profit by assigning it.

Ill always ask the distressed seller if that is a problem and if it is, I will buy it outright, then flip it but it costs more to do that. So Ill explain this to the seller and get their permission to use it. I dont slip it in on them. You will have a miserable existence if you practice real estate by deceit. Natural law will crush you; play fair! Purpose, passion and desire cannot be achieved or acquired by deceit. Thats a quotable quote. I hope you remember