Investing Without Cash or Credit with Peter Conti

Worlds #1 Greatest Commercial Real Estate Mentors Issue Bold Challenge

Because we have been called the “Worlds #1 Greatest Commercial Real Estate Mentors” it’s not a surprise to anyone that we get attention from two very different types of people. The first category is people like you. Someone who is serious about taking big steps in their life and isn’t afraid to search for knowledge or guidance to make sure that you get where you want to go.

The other category contains those who say they want to do big things but when push comes to shove, they quickly come up with a thousand reasons why they can’t do something new. I don’t have the money yet, I’m going to wait for a better time, real estate would be great but only if I got started ten years ago... and they go on and on. By coming up with excuses to give to other people they convince themselves in the process that they are doing the “right” thing by playing it safe.

We believe to the core of our being that a willingness to step up to the challenges life offers us is what makes champions of us all. There is a reason that you are reading this book. It just may be that you are finally ready to take the first step towards living the life of your dreams. To prove that commercial real estate investing is really possible, we recently took the bold step of issuing a challenge to the press to prove that anyone, and we do mean anyone, can make $1 million or more by investing in commercial land development.

After all, if a former auto mechanic and introverted engineer can make a fortune investing in commercial real estate, then you can, too.

Here’s the challenge that we sent out to 3,159 TV stations, radio stations, and newspapers:

“Give us a team of people who are committed to going after their dreams and within 90 days they will have a land development deal under contract and within 180 days the project will be fully underway. By the time the team is done they will have developed the knowledge and confidence to be able to put together commercial deals on their own and they will have made $1 million or more.”

 

We believe that the key to making things happen is in making a commitment that you can’t back down from. We have publicly put ourselves on the line and now the pressure is on. We are going to win or lose with the whole world watching us. To watch those we’ve picked to be on the challenge team in action and cheer them on, go to www.landdevelopmentchallenge.com.

3 Powerful Negotiating Tips For Real Estate Investing Deals

There are many aspects to investing in real estate that need to work like a symphony. All must do their part and perform well. And it doesn’t matter if you’re investing in homes or commercial property.

 
One of your most powerful skills is your ability to negotiate. But don’t let that word scare you.

 
As you’ll soon discover, negotiating a winning deal is simply a skill that can be learned. You’ve been negotiating all your life. We all do it every single day to get something we want.

 
Here are three very powerful negotiating tips you can use right away in your own investing adventures.

 
1. One of the greatest concerns a seller has is the fear of making a mistake. A person who’s driven by fear during negotiations tends to constantly look for something wrong. And that tendency causes a seller to disagree with almost anything you say.

 
What you’ll do is simply turn it around. Here’s how…

 
Your goal is to lead the seller through a process of admitting obvious truths with you instead of defensive arguing. And you can skillfully turn this into a winning deal.

 Here’s a quick example…

 Seller: I listed the property several months ago with a local real estate agent.

 You the investor: And that’s been working well for you? (Turning it around…instead of saying, “That hasn’t been going so well?”)

 

Seller: No, not really. We haven’t found anyone who’s serious.

 

This is a very typical scenario. Notice the seller still disagrees with you. But the difference is the seller is telling the obvious truth. And there’s no ‘defensive’ arguing leading to building walls with you.

 
2. Learn the language patterns of reluctant buyers. There are specific language patterns used. You can simply learn them to become a more effective negotiator.

 
The most often used pattern is how everything is ‘qualified’ before saying it.

 
Here are just a few patterns you can use:

 
“I’m not sure about this, but maybe we can…”

 
“This might not be possible, but what if…”

 
“I don’t know if my partner will agree to this, but what if I persuade her to go along with…”

 
What’s happening is you, the reluctant real estate investor, are subtly stepping back from a deal. You’re not totally backing out. The effect is subtle when properly executed.

 
And this creates psychological space.

 
The natural tendency is for the seller to move forward to fill that empty space. It’s a natural human thing to do. We’ve all done it in various scenarios in life.

 
This is very powerful once you’ve mastered your own style with this technique.

 
3. Never discuss specifics of price, terms, or numbers until you’ve spent time talking through the seller’s motivation to sell the property. In addition to helping solve someone’s problem, your benefit will be getting a great buy.

 
I’ll explain why this is so important…

 
First, emotional reasons are at the core of all buying and selling decisions. People make emotional decisions justified with logic to make us ‘feel’ like we did the right thing.

 
The seller realizes and is intellectually aware of the motivations for selling the property. But spending time bringing out the motivations through sincere discussion will make the seller feel it. The focus shifts from a mental awareness to emotional feeling.

 
And when that happens you’ll also get to the real motivating reasons for selling the property. The last and most powerful benefit from doing this is…

 
You’ll be creating an emotional rapport, or bond, with the seller. And that leads directly to the single most powerful negotiating tip of all.

 
Master the ability to create an emotional connection with people.

 
The only way to achieve high success investing in real estate is to negotiate great deals the seller and you feel good about. The seller feels good because you’ve met her needs. You, as the investor, feel good because you made a healthy profit.

 
Creating an emotional connection compels the seller to work with you. Rapport builds trust and a willingness to work with you as a ‘team.’

 
Use these tips in your own real estate investments because they work. They are just a small handful of what I’ve used in my own investing career.

5 Mistakes To Avoid When Investing In Apartment Real Estate

Commercial property can seem like the ultimate form of real estate investment. And when proper due diligence is done apartment properties can become a cornerstone of your investing business.

The ugly flip side is a field of scattered and broken dreams.

Many investing failures could have been prevented if only a little homework was done before inking the deal. It’s not hard and it isn’t rocket science.

Here are just a few important areas you should be aware of before taking the plunge. They may seem like common sense to you as you read them. But you’d be shocked if you knew how many commercial investors overlook the simplest things.

      1.  Failing to inspect      the apartment buildings...again, just before closing. Of course               you’ll      inspect the apartment during your initial evaluations. You decide to buy      and             secure your financing. You’re all set to take over in a month or two.

 Be darned sure you have a close look before you close the deal. This is important especially with older apartments. But even newer complexes can have their issues.

 
It’s a smart idea to have a professional inspector do this. This is what they do for a living. So they know what to look for. More often than not, they’ll uncover new problems or even problems overlooked by you.

         2. Only work with      experienced commercial property lenders. Forget your regular bank.         They do      not specialize in apartments or commercial property investments.

 
Commercial mortgage brokers understand more than you do, or your bank, when it comes to investing loans.

3.

Don’t invest in      apartments under the assumption you can just raise rents and make a lot of      money. The real world doesn’t quite work that way. Ask yourself this      question...

Why is the seller unloading this property? If it was so easy to just raise the rent, why doesn’t the seller just raise them and make more money?

 
The critical observation in any scenario is to look at the existing rent prices for the property. How does that mesh with the asking price?

 
Take existing rent fees into consideration for your offer. And think critically about any statements on the rent being too low. Again...if the rent is too low, why doesn’t the seller just raise them?

4 .

Failing to      comprehensively examine income, expenses, and taxes over a period of time.      Sometimes you’ll find potential landmines just waiting to happen.

 Always ask to see the corporation’s returns for at least the last several years. This will help you have an accurate idea of how the property performs in real life.

 Then contact the county assessor’s office and ask about the location’s tax situation. The important items include last years taxes, the current years taxes, and if taxes will increase next year due to the sale of the property.

 Doing this can reveal potential large, unexpected costs to you in the future.

 Looking into the      future and pretending you’re the buyer...5 or 10 years down the              road. This      is a bit of a judgment call on your part. But you’d be surprised at how      you          may feel about the property and location.

Take a good look around and imagine what the grounds will look like in 10 years. How about the surrounding area? How are the neighborhoods nearby?

 
If things look a little run-down, how will they look in the future?

 
If there’s a lot of open space next door...fields or woods, for example, you might want to find out about it. Who owns it? Are there any existing plans to develop it? You never know, maybe someone wants to turn it into an industrial operation.

 
How will any surrounding developmental plans impact your apartments?

 
Use your imagination as you do this. If you don’t have good feelings about it, then listen to that and act accordingly in your best interests.

 
Learning how to spot potential pitfalls can save you a lot of money and headaches. Investing in commercial properties such as apartments can be lucrative if done right. And the smartest thing you can do is become educated and learn from those who’ve traveled before you.

How to Make $20 Million Starting Today

Greetings from Annapolis

The leaves are just starting to fall here - it's not hot yet you still don't need a jacket at night.

Today is the final day we are editing our latest book:

Investing in Commercial Real Estate for Dummies - to be released in January 2008

Here's quick sneak peek from Chapter 1

My name is Emily  and I’ve used the information in this book to go from being a 22 year old college student and in less than 5 years reach a level of wealth and lifestyle that is.. well… I guess you’d call me a multi-millionairess.  In my senior year of college I went to some real estate investing clubs and I discovered creative investing.  I knew it was possible because they said you don't need cash, and you don't need credit, and I knew I qualified for that. 

But I didn't know the step by step the details of what needed to happen next.  When I joined the Residential Mentorship Program, I was actually shaking and sweating because it was the biggest check I had ever written but I said, “Please God; if this just helps me get my first deal, I know that it will all be worthwhile.”

It seemed like I had it make when I signed up my first creative purchase of a single family home just 23 days after getting started. Well, this and a few other deals ended up falling apart over the next six months mainly because I didn’t quite have all the confidence that I needed yet. When people asked me why I didn’t give up I told them that I knew real estate worked. I had seen it work for other students in the Mentorship Program and I wanted to prove to myself that it could work for me.

I’m glad I stuck with it because the next month I bought the first of many homes using Peter and Peter’s system. Then after buying houses for a number of years I went to their Commercial Training. I met several people who partnered up with me to buy a commercial property for $560,000. We used the Instant Offer System to get the owner to carry back 95% of the financing. To make it even better we used Peter’s Money Principles to get an investor to provide the 5% down payment.

Most people would die to have a commercial property like this that creates a cash flow of over $8,000 a year right from day one. I found that people in the Mentor Family have continued to encourage me to grow. In one of our recent deals we raised over $4 million dollars in outside funds so we had the money to purchase a property that is worth $20 million. After we split this property up and change the zoning it will be worth over $40 million.

Looking back, it is hard to believe.  When I started I was making $10 an hour at a part time job. One year later I would have been thrilled to make $50,000 on a duplex.  Now I own over $80 Million of real estate in my various partnerships.  The key to escaping the rat race was to start small and then hang around with other investors who think big.

7 Essential Habits To Successful Real Estate Investing

People always ask me how to become successful investing in real estate. Over the years the one thing I’ve noticed is the puzzled look I usually get after telling them. Maybe people think there’s something magical about it.

 
There really isn’t...

 
But there are definite behaviors and habits the most successful investors tend to cultivate. And my own personal success didn’t take off until I started doing the same things.

 
Today I’ll share seven important qualities you can start implementing right away to ensure your own real estate business success.

 
1. A strong, deep sense of self-belief in your purpose and goals. And this faith propels you to go out and meet with prospective buyers and sellers. Even if you feel a little shaky and nervous about doing it. You have enough belief in what you’re doing to call people on the phone, or go out to people’s homes and talk to them.

2. Presenting a trial offer. Afterwards, anything else needed to transform the offer into a win-win deal is negotiated. Successful investors understand the power of an initial psychological commitment to selling a property.

 

3. All successful people understand and practice the simple power of focus. Being focused on their goal without getting bogged down or distracted in other things. It’s like having too many irons in the fire. Your energies get spread out and too thin. And this is a perfect recipe for lack of success.

 

4. Consistent, constant lead generation. They do this even when setting up a fantastic deal. I’ve seen lots of people get starry-eyed after finding a great deal. And then to only let things slide a little. It’s understandable to rest on your successes.

 

But don’t ever do it. Not when you’re starting out, or even if you’ve been investing in real estate for a while.

 
Persistent lead generation gives you constant profits. Plain and simple. And you’ll have the courage and ability to walk away from any deal that isn’t right for you.

 
5. Always discover the real needs, desires, and motivations of the

people you’re dealing with. There are several important reasons for doing so.First, you’ll know the truth about why a particular property is on the market. Sometimes you just may want to walk away from a deal if it’s not a good fit for you.

 
Second, in order to flesh-out the real needs and motivations you’ll need to ‘get involved’ with the other person. You’ll need to create and build rapport. And that creates an atmosphere of trust. It builds an emotional connection that compels the other person to want to do business with you.

 
6. Persistence until you win. Remember that not every deal will turn out like you imagined. You won’t land every deal. But when things are looking less-than-rosy, keep putting in your very best effort. Believe there are great investing deals out there just waiting for you.

 
Remember...tough times never last. But tough people do!

 
7. This last piece of advice concerns a universal issue that so

many people seem to have. It’s certainly not specific to investing in real estate.

 
Fear of making mistakes.

 
Sure, no one likes to make mistakes. But understand when you’re learning something new, then going out and putting it into action...you will make mistakes.

 
I can’t begin to tell you how many blunders I made when I first entered the investing arena. But each and every successful real estate investor has made many mistakes along the way.

 
The important thing to do is learn from them. Very simple.

If you desire to invest in real estate, all you really need are two things. Getting the right knowledge. And developing the best mental habits that successful investors possess and use. You can start including these seven tips into your mental ‘game’ today to become a more successful investor.

How to Snap up Deals in Today's Market

When you are out looking for deals today, you are going to find TONs of motivated sellers. If you don’t have more deals than you can go out and look at then you simply aren’t doing it right. In this fast paced market you need to have automated systems in place to collect, sort thru, and qualify all of your leads before you go out and meet with someone. I prefer to have sellers come to me.


The reason I do this is because it’s a quick way of taking all of the leads that have been filtered by my system and giving the seller one more reason to opt out. If the seller isn’t motivated enough to drive across town to meet with you then why would you want to spend any time with them? Especially in this market. The first thing you’re going to look for is the seller who’s in trouble because of something other than their payments have gone sky high. You know, job loss, relationship problems, medical issues, that type of thing. If the payments are less than what you can get from your end buyer (by selling on a rent to own or by selling with owner carry financing) then sign it up right now baby as a “subject to” deal.

What about the other sellers? It’s probably no surprise that they are in trouble. Sub prime loans, easy credit, people buying houses that were too big for their budget on ARM loans means that you will have plenty of properties that can’t pay for themselves. You see, properties are like your kids when they get to be adults. They should be able to pay for themselves.

So if a property can’t pay for itself – meaning it is going to have a positive cash flow – then you shouldn’t buy it. So what do you do with all of these properties where the seller is super motivated? They even drove across town to meet you. But the payments are way higher than what you might be able to sell the house for on terms or on a rent to own basis. In this case you’ll probably end up buying the house using a short sale.

I prefer to go after a short sale when the house meets these three criteria:

1) the seller is behind in payments, at least 2 or more
2) There is a big 2nd mortgage
3) The house doesn’t show well or even better, needs plenty of work

Getting a seller to agree to a short sale is relatively easy. Trying to connect with the lender and get them to approve your short sale has caused many investors to give up in frustration and give up. They’ve chosen to walk away from the tens of thousands of dollars in profits that my new system allows you to get without hardly any effort. You see, I found with my own short sale deals that it just wasn’t worth my time to be dealing with the loss mitigation department at the bank. So I took my own advice.

When you ask me “Peter, what is the fastest way for me to get ahead?” the answer is always the same. Find someone who is already doing it way better than you and do what ever it takes to connect/model/mimic what they are doing. In some areas like my Residential Mentoring Program it’s already all done for you. All you have to do is fill out the application.

In this case it wasn’t so easy. I tested and tried a number of relationships and methods over the last 3 years and failed way more than I succeeded. I won’t tell you how much this quest has cost me because at this point it really doesn’t matter. It’s not how many times you fail that counts, it’s how many times you get back up and keep going after what you want in life. I finally discovered how to do just the easy part – getting the seller to agree to a short sale – and I’ve created a system that takes care of almost everything else for you. Stay tuned as I'll post it here as soon as it is ready for release

To Your Success

Peter