Real Estate Investing Contracts on Toilet Paper

Even if your real estate contract has been written on toilet paper, it’s valid.

Content of your real estate investing contract is what’s important.

Your financial destiny in real estate investing is sealed BEFORE you walk into a real estate closing as a buyer. You have set in

concrete your profit (or loss) before you turn the door knob to enter the office of your attorney or title company at closing. The payoff of the transaction under anticipation is predetermined when the contract is signed between you as the buyer and the other party who is the seller.

The interpretation of these cold, hard words is that you must recognize the importance of the real estate contract that ties together the property transaction. Your contract contains implications for determining profits in advance.

When we strike a deal in real estate investing, we usually just reach for some pre-printed contract form that came from a real estate office or stationary store. We usually forfeit many of our closing rights to some stranger who put together traditional jargon and processes without recognizing that we ourselves have the right to charter this course. Subjecting ourselves to legalese of an attorney who may not even be a real estate investor nor own more than his own home is the pattern followed by most who purchase and sell real estate.

The first order of business in writing contracts is understanding that any sale or purchase of property is negotiable. While the payment of certain closing costs may be customary or traditional for the buyer and the seller, we are not bound by this protocol. Without differing specification in your contract to dictate your personal direction, the closing agent simply resorts to customary convention.

But by understanding your rights as buyer or seller of real estate property, you can actually INCREASE your profits on a transaction by the wording of your contract. However, these settlement terms must be in writing on your contract in advance of the closing. Otherwise, potential profits fly out the window.

One of the most euphoric feelings I have ever experienced in this business of real estate investing was walking out of a closing with a check payable to me for $75,000 on a package of a few cheap real estate properties! As with anyone, I had a use for that cash! But those profits were dictated on my special personal contract in advance of closing.

Much more cash at closing is available to real estate investors who take control of the options available by independently choosing wording in the content of their own purchase contract and sales contract. This choice is readily available to the real estate investing professional who understands these rights and applies them in the construction of a personal contract.

The suggestion in this article is not legal advice but encouragement to take advantage of an opportunity available in real estate investing. This suggestion is not encouragement to become greedy with legal rights but to give notification that negotiation is available over the dictates of closing costs. Sometimes transactions are profitable only when these considerations are understood.

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Starbucks Coffee – What Commercial Real Estate Investors Should Know

Company Summary

Starbucks Coffee, sometimes referred to as Fourbucks Coffee is the largest coffeehouse chain in the world. It opened its first store in 1971 in Seattle’s waterfront Pike Place Market by three partners: Jerry Baldwin, Zev Siegel, and Gordon Bowker to sell high-quality coffee beans and equipment. In 1982, Howard Schultz, the current Chairman and CEO joined the company as the Director of Marketing. He was impressed by the popularity of the espresso bars in Italy after he traveled to Milan in 1983. Back to the US, he convinced the founders of Starbucks to sell both coffee beans and espresso beverages. However, the idea was rejected so he left the company and founded Il Giornale coffee bar chain in 1985. In 1987 Howard Schultz and Il Giornale bought Starbucks with $3.8M and renamed Il Giornale coffee bars to Starbucks and turned it into the Starbucks you know today. The company went public with the symbol SBUX in June 26, 1992 at $17/share with 140 stores. Since then the stock has split 5 times. As of May 2008, SBUX is traded at about $16, down from the high of $39.43 in November 2006.

Starbucks opened the first overseas store in Tokyo, Japan in 1996. The company currently has about 16,000 stores, employs 172,000 partners, AKA employees as of September 2007 in 44 countries. It has annual sales of over $10B with most recent quarterly revenue being $2.526B. About 85% of Starbucks revenue comes from company-operated stores.

Starbucks does not franchise its operations and has no plans to franchises in foreseeable future. In North America, most stores are company-operated. You may see some Starbucks stores inside Target, major supermarkets, University campuses, Hospitals, and Airports. These stores are operated under licensing agreements to provide access to real estate which would otherwise unavailable. Starbucks receives licensee fees and royalties from these licensed locations. At these licensed retail locations, the workers are considered employees of that specific retailer, not Starbucks. As of 2008 it has 7087 company-operated stores and 4081 licensed stores in the US. Internationally it has 1796 company operated stores and 2792 joint-venture or licensed stores in 43 foreign countries. The pace of expansion is slowing down as the company plans to open 1020 US stores in 2008, less than 400 stores in 2009 down from 1800 stores in2007. In addition, it also plans to close 100 stores in 2008.

Risks to Real Estate Investors

Starbucks coffee buildings remain a popular investment for many investors. When you consider investing in a property occupied by Starbucks, you need to understand the following risks of your investment:

  1. Recession-sensitivity: a hungry man can survive with a Big Mac & fries but can live without a four-buck Frappuccino. This means Starbucks is very sensitive to economy downturn as seen in 2007 and 2008 compared to Burger Kings and McDonald’s. This may be the main reason sales at stores in the US open at least a year are expected a mid single-digit percentage decline, the first drop ever. It triggers Howard Schultz to return to the CEO post. The company plans to double its marketing spending to $100M in 2008 to drum up sales. It began an aggressive coupons campaign offering free drinks every Wednesday through May 28, 2008. This may be a sign of desperation. On April 22, 2008 Starbucks cut its outlook for the year citing weak economy.
  2. Calorie & Sugar: Starbucks drinks have more sugar and calorie in which consumers are more and more concerned due to explosion of obesity and diabetes epidemic in the US. For example, its Strawberries & Crème Frappuccino® Blended Crème – whip has 120 grams (over 1/4 lb) of sugar, and 750 calorie on its Venti 24 oz size. If it becomes a trend that consumers decide to cut down on the sugar drinks, or stick to low-carb diets then it will have impact on Starbucks revenue.

  3. Competition: McDonald’s, Wendy’s and Dunkin Donuts now also offer espresso at lower prices to compete with Starbucks. They will capture some revenue from Starbucks, especially from cost-conscious customers. The current Starbucks prices are already pretty high; it’s very hard for Starbucks to increase the prices in the near future without affecting the traffic to its stores.

  4. High-expenses business model: while Starbucks profit margin is high as it pays an average $1.42 per pound for the unroasted coffee, its business is very labor intensive just like any other foods businesses. It takes between 10-20 employees to run one store. All eligible part-time and full-time partners in the US and Canada receive benefit package consisting of stock option plan, 401k with company matching, medical, dental & vision coverage. Starbucks is voted as the 7-th best company to work for in the US in 2008 by the Fortune magazine employee’s survey. What is good for employees may not be good for the employers. These benefits are normally only available to key employees or managers in the restaurant industry. Historically, the costs of these health benefits rise faster than the rate of inflation. In the long run, they may have negative impact on Starbucks bottom line. Should Starbucks not perform well, it may be under pressure as a public company to close more stores.

  5. Special-purpose building: Starbucks freestanding building is a special-purpose building designed specifically for Starbucks. Should Starbucks decide not to close or not to renew the lease, it’s hard to re-lease the property. There are few tenants out there willing to pay the high rent like Starbucks. It’s hard to use it as a fast food restaurant due to a relative small square footage. Besides, it does not have a commercial kitchen. Once vacated by Starbucks, the property value will most likely go down.

Starbucks Real Estate Operation

Starbucks divides the US & Canada into 17 real estate territories, each has its own store development office to develop the market in its territory. The developers constructed freestanding buildings about 1800 SF with drive through in a location with high visibility, heavy traffic. Once the location is approved by the territory office, Starbucks typically signs a 10 year NNN lease with 2 five year options in which landlords are responsible for roof and structure. All the leases normally have corporate guarantee which means Starbucks will continue paying rent in the event it has to close the store. The lease often has 10% rent increase every 5 years. The rent is between $1.65/SF in a store in Utah to $5.84/SF in New York. This rent survey is based on the rents at just 30 Starbucks properties, 18 of them are free standing, on the market for sale through out the US as of April 2008.

Starbucks Location with Minimal Store Closure Possibilities

During tough times, e.g. in 2008 when sales are declining Starbucks will attempt to cut costs and close underperforming stores. As a real estate investor considers investing in a Starbucks building, you don’t want to invest in a property that will be closed in the future.

Location—— 1mile——3miles——-AHI/yr—–Size (SF)—-Base rent /yr—Rent/SF/mo –Price—–Cap(%)

Ohio……………296……..2609………$88375….1613………$58,590……….. $3.03……….$868K…….6.75

Florida………..9186……55270……$68595…..1816………$75,000………..$3.44……….$1.2M………6.10

Georgia………5717……57201…..$143936….1750………$74,000………..$3.52……….$1.091……..6.75

Mississippi….188……..4923……..$77372…..1816………$112,184………$5.15……….$1.558M…..7.2

Texas………….5944…..40970…….$75043…..1752………$92,914………..$4.42……….$1,327M….7.00

Table 1: Rent Comparables for Free-standing Starbucks Buildings

Location——SBUX rent/yr—SBUX Size—SBUX rent/SF/mo—Other tenant Size—Rent/SF/mo—Difference

California…….$30096……..1248 SF…..$2.01……………………1245 SF……………..$2.50………….-19%

Kansas……….$43200……..1600 SF….$2.25…………………….1600 SF………………$1.33………….68%

Utah……………$38568……..1950 SF…..$1.65…………………….1200 SF……………..$1.86…………-11%

New Mexico..$92004………2000 SF….$3.83…………………….2500 SF……………..$1.92…………100%

New York…….$125004……1785 SF….$5.84…………………….2819 SF………………$2.75…………112%

Table 2: Rent Difference in Multi-tenant Starbucks Retail Centers

Since Starbucks does not release sales revenue for a particular location, you just need to make an educated guess. Based on annual revenue and numbers of stored operated by Starbucks, the average annual revenue per store is about $1M. In addition, if the annual rent to revenue ratio is less than 10% there is a good chance the location is profitable. For example if the base rent for the Starbucks in Ohio is $58,590 then the annual revenue should be more than $585,590. Besides picking a store at a good location (refer to the article titled “What ‘Location’ Means in Commercial Real Estate” by this author), and the cap rate you should consider the following:

  1. Densely-populated area: more people mean more customers size and thus more revenue. The Starbucks in FL, GA and TX on Table 1 are more promising. Note: the author tries to be sensitive by not disclosing the exact locations.
  2. Low-rent: the Starbucks in MS pays $112,184 for base rent. To be reasonably profitable it needs to have annual revenue of $1.12M. However, since there are only 188 people within 1 mile and 4923 residents within 3 miles radius from the store, it’s less likely the store ever achieves that revenue. Besides Starbucks pays $5.15/SF which is very high compared to just $3.52/SF in a fast growing, high income, densely-populated in GA where there are 57,201 residents within 3 miles radius and Average Household Income (AHI) of over $143K/year. It’s hard to understand how the Starbucks in MS could be an irreplaceable location in an area with just 188 people within 1 mile radius from the property! While offering the highest 7.2% cap, this property appears to be a good investment but it actually has the highest risk of underperforming and could be closed down in the future. Alternatively, Starbucks could attempt to renegotiate the lease with lower rent during tough times. While Starbucks has not asked for rent reductions yet, it is not surprised if Starbucks will do so to improve its bottom line in the future. In either case, the property value will go down.

  3. Rent premium: while most Starbucks properties are freestanding in which it occupies 100%, you may see a Starbucks in a small multi-unit strip center with a few other tenants. It normally occupies the end unit with drive through and thus is expected to pay a premium compared to the adjacent unit. However, most of the time Starbucks pays substantially higher rent. For example, in Table 2 it pays $5.84/SF compared to just $2.75/SF by a tenant in the unit next door in a center in New York or 112% higher. In this strip center should the rent for the unit occupied by Starbucks be reduced (due to closure or lease renegotiation) the value of the center will be reduced substantially. You certainly don’t want to invest in this property.

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Five Keys to Real Estate Flipping Success

Make your fortune in real estate. It is not that hard once you get the hang of it. Real estate flipping can be an extremely high paying career, but I see way too many people give up on it. The turnover in this industry is exceptionally high. I noticed the high turnover early on and have watched to learn why some people kill it while others disappear. This has been important to monitor to help myself and my clients last in this amazing business.

I have been in the real estate field for the last 16 years and my hard money lending company finances around 150 deals a year. Here is what that experience has taught me about being a successful fix and flipper.

Mindset: This is where it all starts. For the last 3 years, I have felt myself fall into a little lull and have realized that this occurred because of my mindset. Your mindset could be a lot of things, but the basic concept is that what you believe will happen… does. Sometimes just convincing your mind that you will hit a goal takes work. Not to mention the work that it takes to actually hit that goal.

Focusing your mind on positivity is a great start, but you really need to believe you deserve the success you desire. Meditation and affirmations are fantastic ways to accomplish this.

Hustle: Nothing is going to be given to you. When I was going through my struggles to hit some financial goals, I had to keep reminding myself of this. Times can get hard and things can feel unfair, but the reality is, no matter how much you don’t want to believe it, you are the only one responsible for your success. I would tell myself this over and over. “If I want it, I need to earn it” I had to get up in the morning. I had to deal with the problem on my plate. I had to stay up late or work on the weekend. I had to put in the work to get the results. Because I decided to be successful, I decided to work hard.

Network: As we have learned. It is not what you know, it is who you know. I constantly try to team up with people smarter than me, that can both help me learn and help me get results. This has resulted in millions in profits. I also feel very lucky to have a network that can solve just about any problem I run into. If I am rehabbing a house and run into a problem, I have a list of people I can call for help. If they don’t know how to help they will know someone who does. I lean on my attorneys, my CPA, partners, wholesalers, and other professionals on a regular basis.

Education: To make my top five list you know I believe this is important in your success. Constant improvement is essential and the exciting thing about this, especially early in your career, is that growth is exponential. As you learn and implement ideas into your business, your business grows at a faster and faster pace. Obviously, for this to work you will need to learn AND implement. Many people learn all about investing and never invest. That comes down to the investor mindset. That’s why, I believe, you need all five of these essential keys to be a great fix and flipper. The good thing is this is possible for everyone, including you.

Access to Money: So, this one might be self-servicing because I am a lender, and this could fall within the Network category but let’s face it, if you don’t have money you don’t do deals. Money can come from many sources including cash you have in the bank, money you borrower from institutions, partners, private and hard money loans. Many times, you will need a combination of these sources to get a deal done or to maximize profits. This can all be learned as part of your education or you can choose to work with a professional that can advise you on the best way to navigate this complicated subject.

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The Keys To A Better Real Estate DEAL

When a homeowner, hires his preferred, real estate agent, his hope is, the individual will be, at least to some degree, one of the keys, to a better DEAL! This means, not merely, getting the best possible, available price, but, also, achieving it, in the shortest period of time, with the least amount of hassle, stress, and tension, possible! While there are many factors, and some, may be, more under one’s control, while others may not be, it’s important to choose, a representative, to serve and represent your needs, and get things accomplished, on your behalf, and in, your best interests! With that in mind, this article will attempt to, briefly, consider, examine, review, and discuss, using the mnemonic approach, what this means and represents, and is an important consideration.

1. Delve deeply; discover; dollars: A professional will delve deeply, and consider the best strategy, and approach, from marketing and selling, to closing the deal! Doing so, he should discover options and alternatives, the specific niche for the specific house, and the so – called, target market! He or she, must be proactive, and extremely responsive, paying attention to the best way to get the homeowner, his desired dollars, without undue stress, and with a realistic expectations. He must size – up, potential qualified buyers, and know, how to negotiate, in your finest interests!

2. Empathy; emphasis; endurance; excellence: Choose someone, who begins, by effectively listening, and learning, what your priorities, perceptions, and expectations are, and will, with genuine empathy, discuss, how you can best work together, with finest teamwork! Understand the emphasis, and maintain the endurance, to seek genuine excellence, from start, to finish!

3. Attitude; attention; articulate; aptitude: It takes a genuine, can – do, positive attitude, to put things into perspective, and look at obstacles as challenges to overcome, instead of problems! This requires more than, merely, paying keen attention (although, that’s essential), but also to develop and maintain a well – honed, skill – set, and aptitude! Great agents clearly articulate, to their clients, prospective buyers, and other agents, in a well – considered way, which consistently maintains a negotiating advantage!

4. Listen; learn: An experienced, real estate agent, consistently learns, and uses his knowledge, experience, and judgment/ wisdom, to serve his client’s best interests! The ability to effectively listen, and respond, in a timely, well – considered, inspiring, motivating manner, goes a long – way, towards making the finest deal, available!

Great representation means making the finest DEAL! Pay attention to this asset, and find enhanced results!

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A SMART Approach To Real Estate

There are so many aspects, contingencies, scenarios, and differences, in real estate, it serves little sense, to seek, some, overly simplistic approach, but, rather, it makes more sense, to look at the bigger – picture, and proceed, with a SMART way/ method! Some of the considerations, should include: current economic state, as well as foreseeable future; consumer confidence; specific, personal needs; present finances; personal comfort zone; future financial possibilities; region/ area/ neighborhood, etc. With that in mind, this article will attempt to, briefly, consider, review, examine, and discuss, using the mnemonic approach, why this matters, and why, it is the wisest, possible approach.

1. Systems; sustainable; strengths; solutions; sense: When considering houses. it is wise, to avoid, simply, following, any emotional first – look, but, taking the time, and making the effort, to consider, all the specific house’s systems, and see, which might best serve your needs, etc! Consider, what you believe, the foreseeable future, may, offer, and select a sustainable place! Know, identify, and consider, every property’s strengths, as well as weaknesses, and determine, which one, makes the most sense, in the longer – run, and has the finest solutions, for your personal needs, etc.

2. Money; motivating; meaningful: Begin, by giving yourself, a check – up. from the neck – up, and in an introspective, objective manner, and knowing, if you can afford the up – front money, as well as the future financial responsibilities of home ownership! Your home must be personally, motivating, because, for most of us, the financial value of a house, represents our single – biggest, financial asset. Make the finest, most meaningful, personal, well – considered, decision!

3. Attitude; attention; aptitude; actions: Focus on why, and how, you can, instead of cannot! Proceed with a true, positive, can – do, attitude, and pay keen attention, the your options, etc. Learn as much, as possible, so you are prepared, and develop, the most relevant, skill – set, and aptitude. Proceed with taking personal charge of your life, and take the actions, needed and necessary!

4. Relevant; responsibility/ responsible/ responsive; realistic: Know your individual needs, and requires, and consider, your quest, in relevant terms! Take the personal responsibility, to take responsible measures, which are responsive to your present and future needs, in a realistic manner!

5. Trends; time – tested; timely; trust: Trust your little – voice, and know, which trends, are best fitted, to you! Learn the time – tested, industry – related, information, and avoid procrastinating, proceeding in a timely manner!

Be your best friend, and use a SMART approach to real estate. Are you prepared?

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The Real Estate Market in Hong Kong Today

Now Hong Kong is a Special Administrative Region of China its star is rising as fast as China’s and the entire real estate sector in Hong Kong is benefiting.

The physical geographic restrictions of Hong Kong mean that there is a finite supply of residential and commercial real estate available for sale and rent; and as Hong Kong further strengthens its already robust economic, trade and investment ties with China, the demand for real estate in the region is intensifying.

Competing for space are multinational companies and their massive expatriate employee base, local businesses and local residents, tourists and students. In fact the demand for residential and commercial space in Hong Kong is at its highest today since the glory days pre-1998. Having suffered an acute recession from 1998 until 2003 real estate prices are for sale at deflated costs and are therefore seen as being undervalued which means the real estate market is in a great position right now to grow and expand.

Because demand for real estate in Hong Kong is so intense…

Because Hong Kong’s economy is going from strength to strength…

Because domestic purchasing power is so strong…

And because the real estate market is believed to be currently undervalued – the wealth of opportunity for profit in Hong Kong’s property market right now is intense.

Real estate investors from around the world are buying into the projected period of growth and are committing substantial funds to the Hong Kong market. In terms of any restrictions placed on foreign investors there are none in Hong Kong…in theory anyone is permitted to purchase property. As with all city based real estate economies property in Hong Kong – though currently considered to be undervalued – cannot be regarded as ‘cheap’. However anyone who wishes to get into the market can get mortgages locally in Hong Kong to purchase and can almost guarantee the rental income they will generate if they choose to buy residential or commercial units to let.

The medium term prospects for the real estate market in Hong Kong are good with analysis showing that the number of renovation and new development projects started in recent years is below what is required for the current level of demand. This undersupply will last for at least the next four years according to expert industry analysis. This has resulted in predictions for property price growth of up to 12% annually for at least the next four years, making the real estate market in Hong Kong today a highly attractive prospect.

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Real Estate Broker Requirements: The Qualifications

The real estate broker requirements will give you an idea that shifting from one career to becoming a real estate agent is fairly easy. In fact, the qualifications do not vary much from one state to another because the demands are practically the same too. Although there might not be any particular degree required to become a good broker agent, it would not hurt if you have one because it will definitely be a good back up for whatever you are pursuing. And yet one of the most important requirements is that one needs to be able to take a series of exams to earn the license of being a broker.

Since the market of a real estate agent is huge and yet very competitive, one must be able to start with a real estate firm to work with. Usually a broker needs the help of broker and if you are just starting a career in real estate, it is best to find a broker you could work for. Then, the next thing that you need to do is to find people who are selling their properties and after that you need to search for people who want to buy that property. The more people you find, the more likely that you would be able to sell. This only means that you would have more chances of earning money.

In addition to what was already listed, becoming a broker agent is not easy but some say that it is definitely worth your time and effort. Not only will you be learning the tricks of the trade but you will also be equipped with the knowledge of the legalities that brokers have to deal with and keep up with. In fact, one of the major requirements of becoming a broker is working with technological advancements like the computer. If you do not have any knowledge about how to use it or how it works, it might be minus points for you. This type of profession demands for your diligence and perseverance because if you are determined to be the best broker, you can be one and the monetary rewards can be fulfilling too.

Perhaps by now, you have realized that the requirements are quite easy to meet and becoming a broker agent is actually within your arm’s reach. Here is a breakdown list of the requirements that you need to prepare so that you can immediately start with your broker agent career.

• Age requirement

• Pass the background check

• Completed real estate courses

• Pass the real estate state exam

• Completed application form with needed attachments

• Payment of the fees

The requirements being asked from those who wish to become broker agents are not totally difficult to gather. In fact, they have one of the simplest application systems yet it is one of the most rewarding in terms of payment. Just look through the basics of application, you might just convinced yourself that it is a good career to shift to or at least you might want to try.

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How To MEASURE Your Prospective Real Estate Agent?

When you decide, to either, buy a house, or sell your present home, wouldn’t it make sense, to take the time, effort, and pay keen attention, so you hired the best possible, real estate agent, to serve and represent your needs, goals, and priorities, and provide a degree of protection, in terms of what, to most people, is their single – biggest, financial asset? A wise consumer will take this hiring process, seriously, by thoroughly, interviewing, prospective agents, and doing so, in an informed, meaningful way. However, most people discover, they may not, fully understand, and/ or, realize, some of the necessities, or necessary assets, you should be looking for, in terms of deciding, the best individual to hire. How would/ should someone proceed, to effectively, MEASURE, and properly consider, their personal needs, and requirements, in terms of any prospective agent? With that in mind, this article will attempt to, briefly, consider, examine, review, and discuss, using the mnemonic approach, what this means, and represents, and why it’s important, and relevant.

1. Meet; motivate; marketing: Take the time, to meet, and better, discover/ learn, who you need, to hire. What about someone, tends to motivate you, and do you believe, might be motivating, to potential buyers? Discuss the basics, and basis, of his proposed marketing plan, and how it addresses, your needs and priorities, and will achieve its purposes.

2. Empathy; effective; excellence: Pay attention to, whether any individual, listens more than he speaks, and pays attention, in order to proceed with the utmost degree of genuine empathy! Why do you believe this individual, will be effective? Does he seem, to strive for his utmost degree of personal excellence, or will he settle for, good – enough?

3. Attitude; actions: You need an agent with a real, positive, can – do, attitude, and the focus, to take the necessary actions, to get you the finest results!

4. System; strengths; selling/ sales: What about the person’s system, will focus on the strengths, of your property? Examine his selling skills, and, whether, this will translate to quality sales, which benefits you!

5. Useful; usual/ unusual; unique: What unique characteristics, assets, etc, does a specific person, possess, and deliver? How useful someone’s ideas are, and whether they consider, both, the usual, as well as unusual factors and possibilities, is essential to fully consider, discuss, and evaluate!

6. Realistic; relevant: Empty promises, unrealistic, pie – in – the – sky, listing prices, etc, are generally, not in your best interests! You will benefit, when you hire someone, who is realistic, and offers, relevant suggestions!

7. Emphasis; energy: You need someone, with genuine, inspiring, energy, plus the emphasis on your best interests, instead of their personal, self – interest!

Before hiring your real estate agent, take the time to MEASURE your prospects, and alternatives! Doesn’t it make sense, to protect your asset?

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Positioning Strategies For Real Estate Agents

Just recently I was asked to do a talk for my good friend and co-author

of our best-selling book in Singapore titled Get Rich Now: 15

Strategies from a Self-made Millionaire, Dr Dennis Wee. (Dr Wee is one of

Singapore’s most celebrated entrepreneurs. Despite not having completed his

high school education, he managed to start and build up his own real

estate company, Dennis Wee Group, to become of Singapore’s leading real

estate companies generating S$3.8 billion worth of sales in 2006.)

He wanted me to share some marketing secrets with his real estate

agents and I was more than happy to do so because I believe there’s so much

more that agents can do to position, brand and market their services.

Sadly, most agents, whether in real estate or financial services

(insurance) or any other industries, tend to see themselves just as a

salesperson. This perception of themselves is limiting their growth and income!

By thinking that they are just salespeople, they don’t see the

possibilities of growing their careers into full-fledge businesses. There are

so much more benefits for someone to think big and build a big business,

compared to just existing, and making a living. Donald Trump said: “If

you’re going to be thinking, you might as well think big.” But that’s

another topic for another session.

Here, I’m going to show you some detailed examples of how an agent can

differentiate himself using some simple positioning and branding

strategies that I have used with other clients to great success.

Many people perceive that being an agent in any industry is like being

a salesperson. Someone who is always competing with all the other

thousands of salespeople in the industry. To a certain extend it is correct.

Those other agents are also looking for the same deals that you are. It

is a matter of who gets the deal first. So they are relentlessly going

out there to cold prospect.

Now, I am not a fan of cold prospecting. To me, cold prospecting is

like bashing your head against the wall, hoping it will crumble before you

start bleeding… most people just end up being very disappointed. Why do

you think new agents don’t last long? I strongly suspect it’s because

they realized that their heads can’t go against the wall.

But there are ways to turn the table around. In my talks I like to ask

the audience: Would you prefer to work hard and look for prospects, OR

would you prefer to let your prospects seek you out?

The answer is obvious.

But more than just having less work and an easier time, there are

deeper psychological advantages to being able to let your prospects seek you

out instead of you cold prospecting them. Simply said, when you seek

someone out, you will be open to the person’s ideas, advice, expertise.

That is the reason you seek him/her out in the first place–to get expert

advice.

There won’t be the wall of resistance you’ve grown accustomed to when

you cold prospect. In fact, now it’s them who are jumping over hoops to

seek you out in your domain. Man, it’s always exciting to talk about

this!

Believe me, it’s a whole new paradigm. Imagine you becoming a celebrity

overnight and people are just doing everything they can to get in touch

with you. Think of stars of reality shows like Survivor and American

Idol… It is that powerful!

So how can you achieve that?

Let’s look at a typical scenario:

You have probably have opened your letter box day after day only to

find it stuffed with piles of flyers from various real estate agents. Just

take a closer look. You will realize that all of them claim to be the

“specialist” in the area. Now if everyone is a specialist, then does it

matter who you call? Absolutely NOT!

“But I’m different from the rest. I have more experience, quality,

etc…” you protest.

Let me be upfront. It doesn’t matter who you are or what your

background is. If the prospects don’t recognize that straight away, you are just

like everybody else. No matter how different you think you really are.

Repeat after me: If you are like every-body else, you are a no-body.

Remember: It’s all about their perception, not yours.

So instead of being just another area specialist, be different. So far

I’ve not come across any agent who positions him/herself as the

specialist to serve “first-time home buyers”. Do you think that is powerful?

Absolutely!

First-time home buyers are inexperienced. They don’t know what to

expect, what the whole buying process is going to be like, how long will it

take, what possible hiccups might occur, etc. They are in a place where

they don’t know what they don’t know. Do you think they have different

needs/concerns compared to those who have bought a house before? Of

course! If you are able to gain their trust, do you think they will look

for someone else?

The point is this: you have the information that first-time buyers are

looking for (in fact all real estate agents should know these

information). But by letting them know that you are the expert who can guide

them through the whole process safely, will in itself, earn you a closed

deal.

You might need to make some minor changes in the way you do things,

such as explaining the buying process more thoroughly, going through the

nitty gritty details that you won’t normally need to with experienced

buyers, etc. But all these will help to cement your positioning and

branding as the expert to serve first-time buyers. And once your branding

gets out, you will be busy with so many referrals for other first-time

buyers. Is the first-time buyers market huge enough for you?

Once you have established your branding, it is easy to market your

services. You can easily get the publicity that once used to be impossible

for you. If the media wants to get an opinion on what first-time buyers

think about a new housing policy, who do they look for? They will

interview the expert (you). And after appearing in the media, you will have

gained even more credibility. Can you see how this will snowball into

your profits?

It all starts with creating a powerful positioning, branding and

marketing strategy that is suitable for you.

What other positioning can differentiate you? How about:

o The property investments expert (investors love to work with those

who understand their investing needs, someone who is not just another

agent); or

o Divorce cases specialist (they definitely have different needs as

compared to the usual buyers); or

o Downgraders or upgraders; or

o Serve only those looking for luxurious, high-end houses worth $XX

amount and above (your service must of course reflect that); and

o Many more!

As you can see, it is critical to create a powerful positioning to get

your prospects to start looking specifically for you. I assure you I’m

not an expert of the real estate industry. But I’m an expert in

positioning, branding and marketing. These same principles can be applied in

other industries, such as the financial services industry, perfectly

well.

So start positioning yourself today!

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A Logical Guess: 3 Ways, Politics, May Influence Real Estate, In The Near – Term

One of the greatest, unknowns, throughout recent history, is being able to predict, and/ or determine, whether we will experience a buyers, sellers, and/ or, neutral real estate market, and, accurately, predicting, the anticipated duration! There are many factors, scenarios, perceptions, economic (local, regional, national, and international) occurrences, etc, which impact, real estate’s performance, and, thus, its pricing trends. One of these factors, which is often ignored (and/ or, taken for – granted), is politics. Regardless of one’s personal, political preferences, and/ or, perceptions, focuses, beliefs, etc, there should be very little doubt, today’s politics, will, almost always, have some sort of effect, on how real estate performs, etc. With that in mind, this article will attempt to consider, examine, review, and discuss, 3 ways, present – day politics, impacts the near – term performance of real estate.

1. Interest rates; mortgage rates: Interest rates, generally, fluctuate, over – time! Many, historically, have, either, benefited, or lost, based on their ability to factor these in, and predict the tendencies. When the Federal Reserve, decides to keep interest rates down, either, for policy, and/ or, political reasons, mortgage rates are low. This translates to, considerably lower monthly carrying costs, which, means buyers/ homeowners, are able to afford, more house, for their dollars! When this occurs, generally, we witness rising prices. On the converse, higher interest rates, means it becomes more expensive to afford a house, at a particular/ specific price. These trends, are, nearly always, a major factor, in terms of, whether we witness a buyers, sellers, or neutral housing market.

2. Foreign policy; tariffs: World economic conditions, also, are a significant factor, in the short – term, real estate market. Recently, President Trump’s reliance on tariffs, as a significant component of his foreign policy, has translated to, higher costs of certain materials, such as lumber, steel, etc. In addition, foreign policy, may have a significant impact on consumer confidence, employment, etc.

3. Is a recession looming? Will the current 10 year record, of having no recession, continue?: No one can, absolutely, predict, whether we will experience a recessions! We are currently experiencing, a record, ten – years, without a recession! Many economists have predicted one, within the next twelve, to eighteen months, and, how this might affect, potential buyers, and sellers, perceptions, and behaviors, might have a significant impact on the overall real estate market.

One’s use of real estate differs, and, thus, how certain factors, influence the markets, varies. It is, often, wise, to look at the longer – term, for residential housing needs, However, when one invests in real estate, the rates of return, are heavily influenced by many factors, including the ones, mentioned, above!

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