In this section you will cover your investing strategy and how you will achieve this, but first here are some things to consider.

Before you start doing anything you must define what your “Top” is. Where do you want to be in 5 years from now, what house will you be living in, how many real estate investments would you have done successfully. This is very important because this will be the basis of your investing strategy.

The next important thing for a good investment strategy is passion. You must work towards your goals with passion or else you will not get to where you want to be. The easiest way to be passionate about something is to see, in your mind, what reaching the goal you are busy with will bring you ones you’ve achieved it.

A good investment strategy can only be successful if you have the will to put it into action even when things aren’t going as well as you want. Don’t give up, you never know how close you are to achieving your goal, what if you could look into the future only to realize that if you just tried a little longer you would have been successful. Nothing worthwhile in life comes easy but with passion and will it becomes exciting.

Master the skills needed to achieve your goals. You must never stop learning and always try to be the expert in the field you are pursuing. You might just one day realize that you have become the expert and other’s look to you for help and advice.

Now let’s get to the good stuff, your personal investment strategy.

Setting realistic goals.

First of all I would like to say that I believe that everybody has the power within them to achieve whatever they want, but you have to be realistic or else you will be disappointed. I always have three sets of goals, long-term goals, midterm goals and short term goals.

Long-term goals

Long-term goals are the goals you would like to achieve one day e.g. “I am 65 and a professional real estate investor and my portfolio is worth 1 billion dollars”, note that I always write my goals in the present tense. I believe that by doing this my mind accepts that I am suppose to achieve this and then helps me focus on doing so.

Mid-term goals

Mid-term goals are the ones I will achieve quicker once I achieve my short-term goals e.g. “I am a 30 year old real estate investor that makes a living out of real estate.” Again I write in the present tense.Both your long and mid-term goals will be the basis of forming your investing strategy.

Short-term goals

Short-term goals are the driving force towards achieving your mid and long-term goals. These will also help you put your investment strategy into action e.g.”This year I bought one bargain property and made a $10 000 profit.”Did you notice that I put time frames on these goals? That is very important, you must put a time frame on your goals or they will just be nice ideas you speak about to friends and family.

Memorize your goals

Once you have the main goals that will form your investing strategy you must memorize them so that you always keep your focus on achieving them.

Visualization

Another method to keep focus is to use visualization as a tool to achieve goals. Set aside a couple of minutes per day and imagine the end result of your goals, see it, feel it and live it now.

Time and money

If you want your investing strategy to work you will have to spend time and money on it. Go to real estate investing seminars, buy real estate investing books and learn as much as you can, remember that knowledge is power.

Surround yourself with excellence

Spend time around people that will help you achieve your goals; real estate investing advisors will help put your investing strategy into action. Talk to real estate agents and find out what’s for sale in your area and ask them what they think of your investment strategy, but always remember that not everybody you talk to is an expert, do the research before you do anything else.

Every single day

You have to put your investing strategy into action each day to ensure that it will work. By doing this you will get closer to achieving your goals every day.

Persistence

Be persistent and don’t give up. You have the power, no one else is going to do it for you so get up each day and go create your future.

Let me give you an example of all of the above:

Long-term goal“I am 65 and a professional real estate investor and my portfolio is worth 1 billion dollars”

Now I ask myself: “How did I do it?”

Answer: Mid-term goals

“I am a 30 year old real estate investor that makes a living out of real estate.”

At 30 I work for myself and I can spend my time on finding great investment deals and build my wealth.

Now I ask myself: “How can I achieve this?”

Answer: Short-term goals

“This year I bought one bargain property and made a $10 000 profit.”

Now I start researching which real estate investments I will use to achieve this goal and as soon as I feel ready I go out and look for that deal that makes me a $10 000 profit.

So to recap:

Always start at where you want to be and then ask yourself: “How did I do it?”, and you will achieve anything you set your mind to.

Buy to let, in a nut shell, is when you buy a property with the intention to rent it out to a tenant. With this method you can have a positive cash flow, if the mortgage is less than the rental, and get capital growth over the long term. This type of investment is a great example of using other people’s money to pay off a property.]The advantages of this type of investment are that you get rewarded from the start, with the monthly positive cash flow, and you get rewarded for your patience, the capital growth over time.

The disadvantages is that you have to go out and find those properties that could be buy to let properties, and they aren’t that easy to find. You also run the risk of not finding a tenant and then you will have to pay the mortgage out of your own pocket.

Here are some tips:

• Location, location, location. This is the most important thing to remember. The location of the property should be desirable for your tenants, close to public transport, local amenities, restaurants and bars. There has to be a parking facility nearby. If you are catering for the student market, proximity to the university would be an excellent selling point.
• Ask the local letting agents which properties are in demand and what rent you can expect in the area you are looking in. Remember not to overcharge; this will make it difficult to find a tenant.
• A well maintained and clean property will attract more tenants so always make sure your property is in good condition.
• You could furnish the property, if you do, do some research to find out what tenants like. Your letting agent could be a good source for this type of information.
• When you buy property it is important to remember that you will not be living there, so buy for your target market, not for your personal taste.
• Get a letting agent to manage the property for you, this will free up your time to look for more deals.
• Shop around for a mortgage; there are lenders out there that cater especially for buy to let properties.

Investing Basics is where you will start and every successful investor needed help with investing before they made their money. If you build a good foundation you will be miles ahead of everybody else so grab a cup of coffee and let’s start.

Real Estate Investing is not about property but about people

The first thing you should know about Investing Basics is that Real Estate Investing is not about property but about people. Yes, people. Never assume you know why a person is selling their house, ask them and you might be surprised.

I bought a property from a nice couple that was immigrating so they just wanted to sell their house as quickly and painlessly as possible. So I made them a fair offer and they accepted it. They were happy because they sold their house quickly, and I was happy to buy a bargain and make a nice profit.

So try to find out why someone is selling a property and you could be buying a profitable investment.

Your tenant may never be one of your friends or family

The next important thing about Investing Basics, let’s say you happen to have a vacant apartment the exact same time your friend Fred happens to be looking for a place to stay now that he has returned from his overseas travels as a backpacker.

You think this is a great opportunity to get a good tenant and he is thinking what a nice landlord you would be. This is not completely true. What you are actually thinking is that you will have a tenant that will pay his rent on time and keep your property in good condition. He is thinking that you will give him a “rent break” over Christmas and that you probably won’t mind if he keeps a few interesting pets he found on his travels.

The fact of the matter is that your friends that still only know how to be tenants don’t know how much work and money you have put into your real estate business. And as soon as you start charging him penalties all your other friends, that are also friends with Fred, start treating you like the bad guy.

A final word on friends and family as tenants, there are a lot of investors out there that did not take the time to learn about real estate investing and end up having to sell their investment property at a lower than market price, because Fred did not pay what he owed. This of course is an opportunity for you to get your hands on a bargain so keep your eye on those property listings.

There is more than two real estate investing methods

Another Investing Basics topic is the question of “What is the best Real Estate Investment?” the answer is simple, there is none. All of the different techniques have their advantages and disadvantages.You find real estate investing gurus that will tell you that residential real estate is the only way to go, another will say that flipping and fixer upper real estate investing is the only way to go, or rental properties and capital growth.

Be careful who you listen to, you will miss great real estate investing opportunities if you only focus on one type of investing but it is a good idea to listen to as many different “Gurus”, that way you will learn all the different real estate investing techniques out there. Always find out who these “Gurus” are before you believe everything they say, remember that bad advice can cost you money.

When you start investing in real estate it is of course a good idea to start with one type of investing, but as soon as you understand the basics learn another technique, and that way you will grow to become an ultimate real estate investor.

Don’t believe everything your future tenant tells you

This is probably one of the most important topics of Investing Basics. Your future tenant will lie to you.

It is very importance that you do thorough checks on future tenants. Check their references, make sure that the businesses they worked for exists. Check their drive’s licenses and phone previous landlords they had dealings with.

If you skimp on this section you will have tenants from hell. They will not pay their rent on time and damage your property. Cross reference everything. A good tenant will help you build your property portfolio, a bad tenant will destroy it.

Never stop learning

Another important topic for Investing Basics is that Real Estate Investing is a learning process that never ends. You have to keep on top of what is going on in real estate.

When I started I didn’t have a clue what to do in real estate. Now I know how to protect my assets through trusts, how to ensure that I don’t over pay in taxes and how to find the best deals out there. The best of all is that I am still learning new things I can use to be a successful real estate investor.

Remember, make it fun and learn as much as you can. Go to real estate investing seminars, read real estate investing books, but most of all get started, you learn the most through experience.

If you are thinking of selling your property privately, read this first.

Most private sellers make the following mistakes when trying to sell their property without the help of a real estate professional.

Overvaluing

This is a common mistake. If you think your property is valued more than it actually is you will not sell it at all.

Do your homework, get an estate agent to give you a valuation before you try to sell your property, this way you will know exactly what you should ask for your property.

Undervaluing

This is the worst mistake private sellers make, undervaluing their property.

If you don’t sell houses all day, how will you really know what your property is worth. I once knew a seller that wanted to sell his house for R 350,000 but when, after convincing him to get a valuation done, the property was in fact worth R 520,000. That is a difference of R 170,000!!!

Unforeseen Costs

If you are not a property professional you might not know all the costs involved when selling your home. Again you should consult people in the industry to make sure you know what selling your house will cost you.

People think they are going to save when selling their property privately, but this is not always the case.

Negotiation

This is where professional buyers walk all over private sellers. Most people do not have the necessary skills to effectively negotiate the sale of their home.

They are too personally involved.

A good estate agent knows how to negotiate and get you the right price, I know there are some “shady” ones out there, but if you use a respectable company you should be fine.

Estate agents spend an average of 7 hours with the seller and up to 32 hours negotiating with the buyer, these people know how to get the deal, so let them.

The most important thing to remember is this, you can sell your home privately, just make sure you have the know how to do so, and be careful, you could ruin your chances to get your new dream home if your current one does not sell.

Property sales are down, real estate growth is down, is this the end of the South African property market?

Not at all. There are so many factors that contribute to the current situation in the real estate market like:

• The looming recession in the USA
• The NCA (National Credit Act)
• ESKOM
• Interest rates

But when you speak to the people that are in the industry they will tell you that history shows that this is always happening and the market always comes back.

So don’t panic yet, as soon as this current situation is over, which some say is 18 months from now, everything will stabilize and you can relax and live again.