NARREIA was geared to help our clients purchase investment properties of all
sorts across the United States. Experienced investors can jump right in and
start contacting our Advisors, but most of our clients are newer to investing
and should learn to walk before they learn to run. As the Advisors in our network
have helped literally thousands of newer investors, we've learned
the natural progression on how our Clients have learned to invest, and we've
replicated that process right here on the website.
The main steps are:
Educating oneself on the various Investment Vehicles and Finance Options
Developing an Investment Strategy
Researching the Best Markets for your Strategy
Locating Viable Investments
Again, as easy as this might sound, it is a major process to go from never
owning an investment property to being the next Donald Trump. It takes determination
and discipline to develop and execute a sensible but profitable portfolio. Don't
let that scare you off; while we only want to work with people who are serious
about developing a strong real estate investment portfolio, most people can
start from scratch and begin to purchase properties in a long weekend.
In a Nutshell
Okay, here's the plan in a nutshell. First, we're going to provide plenty of
material for you to read and learn about the various investment vehicles and
financing options. Once you get that down, we'll help you develop a strategy
(or plan) to build an investment portfolio that suits your own needs. Once you
know what you want to buy, we'll show you how to determine where
you want to buy it. We'll then introduce you to some honest Realtors who know
a lot about real estate investing, and they can help you find the properties
you want and need. That's pretty much it. Oh, and we're not going to charge
you anything to do all this because we are paid a commission from the sellers
of these properties, so they're paying for you to learn and buy their property.
For Experienced Investors
If you are an experienced investor, you can cut to the chase and start locating
properties for your portfolio. If you know what markets you are interested in,
jump to the page with the list of our Advisors across the nation, identify the
Advisor(s) you would like to work with and contact them. You can also get on
our mailing list and we'll email you properties that we find especially worthy.
If you would like a little more assistance than just making contact with an
Advisor in a market, skip to the section below that interests you.
Education
If you are brand new to real estate investing, the first step is education.
Most new investors realize that they need to determine what kind of real estate
investment vehicle they need to be looking for, and most already have an idea
of what interests them. Some are looking to build a portfolio heavy in rental
properties to capture the appreciation that has blown us all away in the last
few years. Others are looking for rental properties to develop a healthy monthly
passive income. (Frankly, I advocate balancing your portfolio with both
types of these properties.) Whether you are looking to flip new construction
properties or want to get into rehabbing, we have plenty of material for you
to read here on the website. Click here to take a look at the material we have
prepared for you.
It's important to note that we don't have a specific investment vehicle that
we hawk or preach. So many of those "Real Estate Education" companies
are one trick ponies, and they'll charge you hundreds, if not thousands, of
dollars to learn how to obtain one kind of investment. We, on the other hand,
are not married to Zero Down Investing, Condo Conversions, Flips, Rentals, Foreclosures,
or Rehabs. There is a place and market for each of these vehicles, so we hope
that you'll brief yourself on them all to determine which fits your investment
style. We highly encourage you to read books from acclaimed authors
such as Gary Keller, Robert Shemin, and Tom Lundstedt.
Be wary of anyone proclaiming they have the ticket to real estate
investing, as there is no one ticket. There are things I disagree with in every
real estate investment book that I've read, and I'm sure that every single real
estate investment author would disagree with some aspect of NARREIA's
material. Heck, even our own Advisors will debate the merits of a particular
investment vehicle, technique, strategy, or financing plan. Why? Because as
much as we want to make real estate investing a science, it is very much an
art, too, and that leaves a lot open for interpretation. The bottom line is
there is no perfect solution. Furthermore, each individual has their
own needs, desires, risk tolerances, and priorities, so while a strategy or
vehicle might be good for one investor, it might be absolutely the wrong way
for another investor to obtain their goals. The point here is to augment your
NARREIA education with outside reading, and to remember that none of the authors
or self-proclaimed gurus are absolutely right. You need to use your brain here
and figure out what works best for you.
What most newer investors don't realize is the significance of the loan program
they are using. A loan program can make or break some investments, so it is
very important to understand the various financing options before you start
investing. You should discuss this with every Advisor that you work with, because
you can learn from each one of them. Another reason to prod your Advisor for
information on financing is that the picture is constantly changing. For example,
I'm writing this in early 2006, and the yield curve is inverted. This means
that the interest rate for a given 30 year fixed loan is actually lower
than the rate for a 5/1 ARM! This doesn't happen often, as it takes a lot
of unusual factors to be in place, but it is happening today. Many investors
are spring loaded to go for a 5/1 ARM because the interest rate can be 0.5%
to 0.75% lower under usual circumstances. By talking to your Advisor, you might
realize that there might be another loan program out there that you had previously
written off.
Developing an Investment Strategy
Once you have figured out what kind of real estate investing you want to do,
you need to come up with an investment strategy. In the upcoming version of
the NARREIA website, there will be an online Wizard where you'll be able to
enter the amount of capital you are ready to start with, it will ask you a series
of questions regarding your investment vehicle preferences, your risk tolerances,
your goals, and some other pertinent information and it will spit out a full
outline along with links to and contact information for Advisors in the markets
that you should be considering. Sounds neat? Well it will be, but until then,
you have to do it the old fashioned way: talk to us. After you have determined
what kind of investment vehicles pique your interest, call or email one of our
Advisors and they can help you determine where you might want to buy. Some people
like to contact the Advisor nearest them, and some know a good market and go
straight to the Advisor in that market. If you want, you can contact me,
or my teammates, Jeff
Klein, Scott
Deserve, or Kurt
Van Ness. We can go over your objectives and help you determine what vehicles
and markets would be best for your portfolio.
When you are developing an investment strategy, you'll need to know how much
capital you have to work with. This amount should not only be used to cover
the down payments on your properties, but your closing costs, repairs, and any
negative cash flow you might incur.
Researching the Best Markets for your Strategy
Right now, the best way to get the information on the various markets is to
get information from the local area experts. These are the NARREIA Advisors
we have in each market. The first step is to go to our section that lists all
the market reports for the area you are interested in. Frequently we have multiple
Advisors covering a market, and they give independent perspectives to help you
build the whole picture. Once you have done this, you can identify a specific
Advisor that you want to discuss the market with. Their contact information
is found on their profile page, and you can contact them via email or phone.
There are investment in all markets, but the Advisors know if their
market is suitable for the investment vehicle that you are looking for. Because
you are looking for a single property to start with, you should be able to research
and identify the various markets that will be best for you in a day.
Locating Viable Investments
Here's the part you all have been waiting for: How to find good investment
properties. There are a few ways to go about it. From the easiest to the most
involved:
Elect to be on the email list that sends you Hot Properties.
Contact an Advisor to request they look for properties specifically for
you.
Contact an Advisor about visiting them in their market and the two of you
can drive for properties.
The Hot Properties List
The first is the easiest way, because all you have to do is sit back and wait
for the properties to come in. Right now we're sending about 2-3 properties
out a week. Some weeks, nothing meets our standards, others we'll have five
or six. Once our volume reaches a higher level, you'll be able to specify from
which markets you want to receive emails. You'll also be able to specify which
kinds of investment vehicles you receive.
These properties are so hot, they don't last a day, so you're typically buying
them based on photos, printouts, spreadsheet calculations, and a good, old fashioned
phone call to the Advisor representing the property. What? Buy a property sight
unseen? Believe it or not, yes, many real estate investment transactions are
initiated by Clients who have never seen the property. This does not preclude
you from doing your Due Diligence, and if you find problems with the property,
you can get out of the contract within a specified period of time. In Las Vegas,
for example, where I practice real estate, we have a clause in our contract
that basically gives our clients a way to completely cancel the transaction
during the Due Diligence period (typically 10-15 days). Of course, this is not
to encourage you to put an offer on every property that floats your way, only
to cancel within the Due Diligence period, and if we see a trend of a Client
who habitually does this, we'll stop working with them. But there are very good
reasons to exercise your right to cancel during the period, and once you get
comfortable with our Advisors and the quality of the data they provide, you
may become comfortable enough to initiate the transaction sight unseen.
A lot of people have asked us why we don't have a section devoted to post the
properties on. It's a reasonable idea, except that the properties we send out
are so hot, they tend to be snatched up within a 4-12 hours. What we will do,
however, is develop a Classified section for our members to post their own properties,
or for Advisors to post properties that don't meet our Hot Properties criteria
but are still decent investments.
Have an Advisor send properties to you directly.
If you are looking for a property in a specific market, it might be more effective
for you to contact the Advisor directly. For many reasons, some Advisors submit
a lot of properties to the Hot Properties system, while others tend to work
more directly with the client. When you contact an Advisor, let them know what
you're looking for, and they should be able to accommodate your needs. Realize,
they are not magicians, and if you ask for a property that is 30% below market
value in a rapidly appreciating market, and it has to have $1,000 positive cash
flow on it, it is very unlikely that you'll get a response. We're here to find
you good, viable, realistic investment properties. Again, we're a team.
The Advisors are not servants, they are highly professional local area experts
with knowledge and connections that are valuable to you. Using common sense
and common courtesy will get you a long way with the Advisors, and they can
make you wealthy along the way.
To contact an Advisor, visit the Advisor list. Some markets have more than
one Advisor, so read up on the choices and either call or email the one you
would like to work with. Realize, some are stronger with some investment vehicles
than they are with others. If you're looking to purchase a specific type of
property, see if there is an Advisor that can specifically address your needs.
If not, pick an Advisor and contact them, as they may have a connection that
will be able to find what you're looking for.
Once you contact them, the Advisor will be able to get the information to you
for you to be able to buy a property via email and fax. Or perhaps you would
like to play touchy-feely and get your feet on the ground in the market...
Visit an Advisor in their Market
As much as we love the development of being able to sell properties over the
internet (via email and fax), nothing replaces the experience of going out and
looking at homes. Not only does it give you a better perspective on the property
or properties that you're buying, but the time you spend with the Advisor is
extremely educational and informative. Every one of our Advisors is very happy
to have you come out and visit them to learn about their market and get your
feet through the doorways of potential investments. (One reason they are so
happy for you to come out is so you can see how much work really goes into screening
out the good properties from the mass of lousy properties out there.)
Taking a trip to a market is as easy as identifying an Advisor, contacting
them, and setting up the appointment. To do this, just go to the Advisor list
and start contacting them.
Summary
Hopefully you now have a good understanding about how to get started in utilizing
NARREIA. Once you educate yourself about the investment vehicles, financing
options, and markets, you can develop a strategy. Then contact an Advisor or
get on the mailing list, and start finding properties!
