INTRODUCTION:
Welcome to Investing 101 a systematic manual to assist you in the
purchase of your first of many investment properties.
Investing for over 30 years has taught me many lessons; the most
important is to never stop learning. There are many ways to do the
same thing, yet they are all different. Seek out those ideas that make
sense to you and customize them to fit your needs.
Real Estate investing can be something enjoyable and profitable, but
is it right for you. You are the only person who can answer that
question, but I will attempt to guide you to that realization. You must
be willing to deal with people in your business. I follow the “Golden
Rule”, but I also tell my tenants that I expect the same from them. Be
firm and decisive, but at all times fair. Make sure everything is in
writing and everyone is on the same page.
There are ways to get around those late night phone calls, but you
must be willing to work at it. It may be as simple as making sure that
all the plumbing lines are new, when a tenant moves in, to writing
clauses in your contract that the tenant is responsible for the first
$100.00 of any repairs.
Evictions and bankruptcy are issues you might face, regarding
tenants, but they are also manageable. It is always best to
communicate your intentions and negotiate with the client for
possession of your property.
If you are still with me then continue to read on and I will try to
make you a successful investor for life.
CHAPTER ONE:
Who are you really and should you be investing?
I began investing in real estate after watching my father for many years.
I could not get the feeling out of me after looking at his face and
watching how much joy a piece of real estate brought to him. It was a
great accomplishment and pride to see him work on his newest project
and see the pride of ownership when it was complete.
I bring this point up because we must all know ourselves and be able to
handle the ups and downs of owing a piece of real estate. During the
numerous seminars, books, and other teachings, I encountered a
gentleman in Arizona that I will share with you. In John Burleys’1 book,
“Seven levels of Investor” he discusses where you might fall in his
hierarchy.
Level Zero - The Non-Existent
“This type of investor is the Non-Existent. This person lives their
Financial Life with their head in the sand like an ostrich. They
essentially have NO investments or savings.”
Level One - The Borrower
“As implied above, the Borrower is often in a far worse financial
position than the Non-Existent, though their potential for change
may be greater. The Borrower often has very high debt.”
Level Two - The Saver
“The third type of Investor is the Saver. This person usually puts
aside a “small” amount of money on a regular basis.”
Level Three - The Passive Investor
“The fourth type of investor is the Passive Investor. These investors
are aware of the need to invest and usually participate in their
Company/Government retirement plan (IRA, 401k, Pension, Social
Security, Superannuation, CFP, etc.).”
Level Four - The Automatic Investor
“When you reach the level of Automatic Investor, your investment
success is assured. You are truly on the path to Automatic Financial
Freedom.”
Level Five - The Active Investor
“The top two levels of investor are reached by only a very small
percentage of people on planet Earth. Contrary to what most people
(who do not have money) believe, you do not have to become a Level
Five or Level Six Investor to become wealthy. But you do at least
have to master the habits or Money Steps of a Level Four Automatic
investor.”
Level Six - The Capitalist Investor
“The seventh and final level of Investor is the Capitalist (remember
we start at level Zero-The Non-Existent). Few people in the world
ever reach this level of investment excellence.”
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