The Fermi Technique: How to analyze investment properties in under 5 minutes 

Over the last decade,  I have worked with many successful long term real estate investors. They have different personalities, different professions and often employ different strategies. But they all have one critical thing in common: Successful long term real estate investors possess the ability to quickly and accurately “size up” a potential deal.  If someone were to call you on the phone to offer you a potential real estate deal, would you know how to evaluate it quickly and accurately … [Read more...]

How to avoid “getting married” to a rate of return and a pyramid scheme story

The year was 1997 and the country was on the brink of civil war. Just under two years prior, several “investment” firms had appeared offering a very enticing opportunity: Invest a sum of money and in 90 days receive three times the amount. People could smell that something wasn’t right but they felt drawn to the easy profit nevertheless. So they started investing small amounts: $100 at first that became $300 in three months time. And the word started to spread as more and more people decided … [Read more...]

How to properly calculate the return on a long term real estate investment

This may come as a surprise but in my experience, most real estate investors don't know how to properly calculate the return on investment on a particular piece of property. Couple that with the fact that ROI is the metric most investors use to make crucial decisions about investing and you have a recipe for disaster. Or at the very least, a recipe for missed opportunities. First, let's illustrate how most investors calculate the return on investment by looking at an example. Suppose there's … [Read more...]

How to find and screen tenants for your investment property

When you are trying to reach your retirement goals using a long term real estate investing strategy, there is a multitude of factors can make the crucial difference between success and failure. To mention a few, the quality of the location and school district, the price to rent ratios in your portfolio and the terms of your financing are all factors that lead to underwhelming results when compromised. But if I had to pick one factor that all successful long term real estate investors must get … [Read more...]

How to tell if your investing strategy is working

Most long term investing strategies have one element in common: They all require hope and faith. The basic premise goes something like this: You will feed your 401k/IRA/mutual fund account regularly for 40+ years and then hope and believe that at retirement your nest egg will be sufficient to avoid Walmart employment at 65. Don't get me wrong - you will periodically receive detailed statements about your account balances and positions throughout the four decades. But those balances and … [Read more...]

How to find an investment property in a hot real estate market

Every real estate market brings its own unique set of challenges for real estate investors. Back in 2005-06, the foreclosure wave hadn't quite made it to shore yet, but it was giving its first signals. Long term real estate investors could purchase investment properties with as little as 10% down on a conventional mortgage but interest rates were just under 7%. Fast forward a couple of years (2008-10) and the recession was in full swing, foreclosure deals were a dime a dozen and Bernanke's … [Read more...]

How to have your cake and eat it too with real estate investing

Picture going into your investment advisor's office to talk about your impending retirement, 15 years from now. You proceed to tell her that what you'd really like to accomplish is to quadruple your investment AND draw a six figure income at retirement. Now picture her chuckling and you being dressed down to more realistic expectations. When you think about it, most other investment vehicles consider the growth of your capital and the income derived from it to be mutually exclusive. If you want … [Read more...]

How to minimize turnover and maximize returns in your investment real estate

Few things affect the results of a long term real estate investment strategy like turnover and vacancies. During the time a property is not leased it becomes an expense rather than an asset to the investor. Turnover has similar effects - every time an existing tenant leaves and a replacement is found, the investor incurs make ready and lease out expenses. If high turnover and vacancy cause investor returns to decrease, it follows that taking measures to minimize them as much as possible will … [Read more...]

How to retire in 7 years with real estate investing

Real estate investors' goals vary in nature: Sometimes it's about growing their portfolio's value or income from it to a certain amount. In other cases though, it's all about time. How can they achieve what they want (retirement, financial freedom, quit the job to stay home with the kids) in X number of years? How many assets do they need to purchase and what level of invested capital will be required? And most importantly, how do all the pieces fit together in a coherent strategy? Our … [Read more...]

How to create a six figure income with real estate investing

Have you ever thought about what your life would look like if you could create a six figure annual income from your long term real estate investments? Today's post is about how the investments we plan and execute today could get you there at some point in the near future. The math of creating a six figure income from your real estate investments is quite simple. Essentially, there are two, very different routes to get there: The Blueprint Method we advocate involves fewer properties and much … [Read more...]

7 Powerful Tips on investment property management

The number one reason investors shun long term investing strategies is the perceived hassle of "landlording". The concern is that this type of investment brings with it tenant calls at three o'clock in the morning, relentless maintenance, collecting trouble and the like. Since real estate investing success has as much to do with its return on investment as the overall investor experience, this is a valid concern that shouldn't go unaddressed. So, I put together a list of 7 powerful tips to … [Read more...]