MINDSET: WHAT DO YOU BELIEVE ABOUT YOURSELF? PART II

By: Mark Frentz
www.akerahomes.com
mfrentz@akerahomes.com

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Part 2: Self-Image

In my previous post on belief about self I focused on the basic idea that what we talk about has a strong influence on how we feel about people, jobs, and situations. In this post I'm hoping to develop an idea that is more difficult to understand. To get more out of this concept and understand more completely you can purchase the book "Psycho-cybernetics" by Maxwell Maltz. It is a classic that is under-appreciated in what it teaches. 

I recently heard a story about a person who asked Bob Proctor what the one thing he would most desire to pass on to the next generation. Bob said something along the lines of: give every effort in life to protect your self image. That's it, and from a man who has accomplished quite a bit in life and understands motivation and success on a greater level than any average person does. 

"Self image is so important. The way we see ourselves determines how we interact with others and, eventually, what we realize in life."  -Maxwell Maltz-

Each person typically has 2 images. One is an image we present to the world and hope others will see, a second is the how we see ourselves. A good question to ask yourself is: how do I view myself and is it any different than what I hope others will see? If the answer is that you present someone else to others, it most likely means you struggle with your own self-image. Now, I'm not saying this is good or bad or right vs. wrong. All I'm stating in this post is that it is helpful to understand this all better so that you can begin to realize more out of life than you may be experiencing right now. If you are experience shame when you see yourself you will not reach the same level in any areas of life (fulfillment in relationships, material wealth, success in a sport or activity/hobby that you enjoy, etc.).

The Secret

How you think affects your emotional state and outlook on life. It also affects what you get out of life. If you have watched the movie "The Secret" or read the book you could get the idea that there is a simple law to life and that if you simply think about something, you will receive it. While I'm not a hater of The Secret, I don't believe it portrays an understanding of life that is accurate. I don't believe there is a magical way to get everything you want out of life and I believe the movie suggests this magic. Here is how I believe what you focus on and think about affects you; how I believe the law of attraction works. 

Are you most likely to talk to a person on the bus or street that scowls at you when your eyes meet, or gives you a warm smile and asks "Isn't it beautiful outside right now?" Are you most likely to invest with someone who is upbeat and asks questions about you, or a person who simply talks about a product and never invests or even knows what you need? I know someone who is brilliant at her job and truly a genius in what she does, but she is extremely negative. She wonders, at times, why she isn't getting out of life what she wants and my simple explanation is that while I admire and respect her for the hard work she has put into her chosen field and believe she is excellent at much of her work, I typically don't want to spend too much time with her because I don't feel as good afterward. I don't think other people do either. It's pretty simple really.

I think the key to the law of attraction is two-fold. One part of it is that if you present yourself to others in a certain way, you are more likely to find people respond in a certain way back more of the time. The other part is that if you want to present yourself to others in a certain way, it will have to be genuine to get the best results and to be genuine you will need to actually think in a different way and have a different outlook on life. There is a third element to this, but it applies to more of life than simply the happy things we want out of it: confirmation bias. Confirmation bias basically means that we notice in life what we are focusing on. I'll give two quick examples:

1. If you are looking to purchase a certain make and model of a vehicle isn't it amazing that, all of a sudden, you start noticing that vehicle everywhere on the road... It almost seems as though every third vehicle is now the one you are thinking of buying.

2. You read a fortune cookie or read your horoscope and you begin to realize that it was extremely accurate in its prediction.





What is actually happening here is not that everyone purchased the same vehicle you are looking at purchasing last night and are now all driving them or that the fortune cookie has any basis in reality (sorry for those who love your astrology, but I don't believe there is any real accuracy to it).

While I could go on about the law of attraction at some length, for this post I simply want to present the idea. I sincerely believe that when a person changes the way they think about themselves they will begin presenting themselves in a very different way to others and they will begin realizing different results from what they are doing.

So What?

I had a professor who, after teaching us something about history or anything else would yell: SO WHAT?! What he meant was: information is important, but it is much more important to know what to do with that information. Here is a way you can begin to work on your own self image. This is simply a way to begin moving in the right direction and not the be all end all of everything you can do. Again, I'd highly recommend Maltz' "Psycho-cybernetics". It honestly is a classic.

1. Your subconscious mind is very much like a computer or guidance system in many ways. It will begin influencing you to go in the direction that is suggested by what you put into it. If you put in a lot of television you will be motivated to buy stuff and drink cheap beer. If you consistently put in statements like: you don't need money to be happy, or I'm not very creative, or there's something wrong with me... you will begin moving toward not having money, doing nothing creative, or consistently making poor judgement calls on anything in life. If, on the other hand, you begin to put in your head things that will motivate you toward the things you want: Money allows me to help myself AND others, or I'm learning new things and skills all the time, or I am becoming someone I'm proud of... you will realize the exact opposite.

I'll leave you with a final statement for today's post... It's already getting longer than usual. I think these last words are far better than anything I would come up with myself (even if I forget where I got the quote... probably Bob Proctor).

"Your results are a direct reflection of your image"



Here's to your future of risk-averse investing!

If you would like to learn more about investing in real estate please contact me at the email address listed at the beginning of this article or go to my website at: www.akerahomes.com/investing-in-real-estate.html

INCREASE YOUR PROPERTY'S VALUE

By: Mark Frentz
www.akerahomes.com
mfrentz@akerahomes.com

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Any Idiot

My apologies in advance if this comes across as rude... I don't mean it that way. Any person, regardless of their understanding of real estate or investing, can make money in an up trending market. Every person who purchased a property in Calgary in 2004 and sold in early 2007 made a ton of money even if they overpaid on the purchase price and got way less money than the property was worth when they sold (they could have even destroyed the property while they lived there and would have made a bunch of money or had tenants that didn't pay rent for half the time). It is extremely easy to make money in real estate when your property value increases, without any help from you, by over 35% each year! What every serious, long term investor really wants to know is how to make money in ANY MARKET. If you belong to this latter group keep reading.

Five Tried and True Tips

1. The first tip I will always mention to increase value is to underpay, or at the very least not to overpay for the property when you purchase it. I know a lot of people who overpay for their property. Here's a tip... find a local wholesaler of real estate (through your local investment clubs) and get a deal on the property. When you do this you aren't necessarily increasing the value of the property, but you are automatically increasing the amount of equity in your property which is basically the same thing.

2. When upgrading the interior, focus on only the most important features. a) paint the walls b) redo the flooring with laminate c) if the kitchen needs upgrading put in an inexpensive set from Ikea d) if your property is older and only has 1 bathroom, put another one in that is simple and functional (no granite counters!). All of these ideas give you the most bang for your buck. If any of these areas doesn't need upgrading... DON'T. The general rule is don't spend money on something that doesn't help your bottom line even you really like it. What you like isn't important when selling or renting out a property. What a majority of other people like is important.

3. Turn a bonus room into a bedroom by, again, purchasing a relatively inexpensive Idea set. When potential buyers AND potential tenants are looking at a 3 bedroom house rather than a 2 bedroom house, they expect to pay more for it.

4. If it is an older investment property that you are keeping for yourself think about suiting the property (this depends on the type of property you own; bungalows typically work best because it is easier to do and costs less)

5. Put in a garage. In Calgary this can cost around 15-20k, which is expensive. If you are paying 4% interest on borrowed money to put in a 20k garage your payments will be $800 each year. If you put in a double garage in the backyard you can now (I'll underestimate) charge at least $125 per side each month. This means you will end up making $3,000 each year in garage rental or $2,200 after the interest payments. You've increase the value of your property AND increased the amount you make every year on that property. You could put the other $2,200 against the borrowed money and after 9 years you would be simply putting the $3,000 into your pocket each month.

Why Add Value?

There are four reasons I can easily think of to add value to your property:
1. People will pay more for the property when you sell it
2. People will pay more to rent the property
3. You will attract better tenants if the property looks and feels better. These tenants will often be easier to communicate with on many levels if you are doing your job of managing the property properly
4. You can refinance your property for more money and put that money toward another property sooner

Last Words

Getting more value out of your property is not difficult, but it is very worthwhile if you want to retire and reach some of your dreams in life. The key to real estate is treating it like a business. In my opinion the vast majority of people who own investment property do not treat it like a business. If you are the one who is different and makes more money in the business you will stand out as someone different and become far more successful than the average investor. What is one way you can make a larger difference to both yourself and your community by treating your nest egg like a business this month?




Here's to your future of risk-averse investing!

If you would like to learn more about investing in real estate please contact me at the email address listed at the beginning of this article or go to my website at: www.akerahomes.com/investing-in-real-estate.html

MINDSET: WHAT DO YOU BELIEVE ABOUT YOURSELF?

 By: Mark Frentz
www.akerahomes.com
mfrentz@akerahomes.com

Remember: Please share this article if you find it enjoyable

What do You Believe about Yourself?

Why in the world am I writing a post about belief in self in a blog about real estate investing? Because what we believe about ourselves affects how we view our future and what is possible. If I believe I am an idiot and will always be an idiot, it doesn't make a lot of sense to learn about investing because I will most likely fail at it anyway. If I work on beliefs and become a person who truly believes I can retire at 50 with good cash flow and great investments, I will automatically work toward those goals and achieve them in much the same way I was avoiding them before. In this post I will simply discuss how our thinking affects our outlook on life. In my next post I will discuss how our thinking and outlook influence our behaviors and what we end up receiving in life.

First Things First

Before changing beliefs, we must recognize what we believe in the first place. What you need to begin doing is to start paying attention to how you talk about yourself and interact with others. Do you apologize all the time even when you haven't done anything wrong? What about what you say under your breath when you stub your toe, make a mistake, or drop/break something? Ask someone close to you how you talk about yourself (ask someone who is both safe enough to be vulnerable with as well as someone who cares about you enough to tell the truth even if it may sting a bit.

Another help in understanding how you judge ourselves is to begin looking at the way you think of others or talk about them to yourself. Do you call them names? Are you harsh? I'll let you in on a secret... The way we judge others is often a glimpse into how we judge ourselves. It's fascinating and sad to me that most people are so hard on themselves. Why do we need people calling us names when we are able to use much harsher words for ourselves?

Reality is Subjective

If you repeat something enough times you will begin to believe it even if it doesn't make sense. This is how our brains work and you can begin to use it to your advantage. Here is an experiment you can try for the next 60 days. Whenever anyone asks you about your job, your boss, your partner, or your kids paint a good picture and focus on the positives of what you are asked. The key here is not to lie "My kids are incredible! They never fight and one is most likely going to graduate from Stanford when she is 13 years old". Tell the truth and focus on the positives: My wife works hard for our family, I love that I am good at what I do for a living and I especially enjoy... I think you get the picture.

I learned this lesson well when I was working on my bachelor degree. I worked as a landscaper in the summers and one summer was struggling with my attitude. I decided to only talk well about my job after being confronted by a friend. By the end of my 4 months summer holidays I realized I was really enjoying this work again: I worked outside all summer, I had a boss who was easy going and tried to treat us fairly, I made decent money for what I did, I worked with friends, and I repeated just the positives of my job each and every time someone asked. I ended up working in that job for a bunch of summers and from that point really enjoyed my job. Was it a perfect job? Absolutely not! The reality is that what I focused on changed how I felt about the job. The fact is that our emotions are influenced by our thoughts and beliefs which are influenced by what is repeated in my brain through my own words or other people's words if I hear them enough.

Brainwashing Yourself?

Am I suggesting that you brainwash yourself? Absolutely! Am I suggesting you stifle uncomfortable emotions like anger, grief, and fear? No. Be honest with yourself and if you are feeling terrible, deal with it in an appropriate way (crying, telling someone who is safe to tell, etc.). In my experience it is the people who are always suppressing their uncomfortable emotions who also struggle with PRETENDING they are happy when they aren't. If you aren't happy, admit it to yourself... then work on how you talk to yourself.

Here are some ways you can begin to work on this area of your mindset so that you enjoy more of your time on this planet and get sick a lot less often:

1. Practice gratitude and watch how it affects your mood over a period of time
2. Talk about people, your job, and your current situation in a positive light. Not because it is perfect, but because often things aren't as bad as they sometimes seem.
3. Reframe how you look at experiences and situations: People who become strong in business are often those who are looking at problems as opportunities. On one hand it is terrifying to lose a job even if you didn't enjoy it in the first place... On the other hand, if it allows you the opportunity to do something you are actually passionate about there are positives there. Let the positive things motivate you even while you mourn the loss of your old job and deal with the frustration of putting out new resumes.
4.  Don't complain about something to someone who does not have the ability to fix it or help you with it. Do share difficult situations and emotions with people who are safe to do this with. If you don't have anyone safe to do this with... you need to start making a different kind of friend, but in the meantime pay a therapist to listen.

Summary

Basically what I am saying is that there is a fine line between lying to yourself and learning how to change the way you think about life on one side as well as suppressing emotions or dealing with them in appropriate ways on the other side. What I see around me each and every day is a lot of people who either whine about life or pretend to be happy when they are dying inside. There is a better way, but it takes a lot of practice. I currently have someone in my life who simply doesn't believe me when I say I'm doing well. That's her choice and her paradigm and I'm sad she doesn't currently see that I do have frustrations as well and do deal with them in healthy ways. My rule of thumb regarding uncomfortable emotions and frustrating situations was stated in #4 above.





If you would like to learn more about investing in real estate please contact me at the email address listed at the beginning of this article or go to my website at: www.akerahomes.com/investing-in-real-estate.html

WIN IN EVERY REAL ESTATE MARKET

By: Mark Frentz
www.akerahomes.com
mfrentz@akerahomes.com

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Before I Begin

If you are thinking of investing in real estate you need to fully understand what you are getting into. The more you have prepared beforehand or can rely on by joining with and experienced investor, the better you will manage your risk and the more money you will make for the first day of investing. There are two aspects of real estate that most people I meet don't typically understand when thinking about investing in real estate. The first is that you need a ton of your own money to invest. This is simply not true. It is true you need money, but you can also help other people invest and provide a fantastic service for them by providing great returns and use this service to help build your own portfolio. The better you take care of others, the better you will take care of your own future. The second aspect that many people do not understand is that you only make money in real estate when the market trends up. This is absolutely NOT TRUE! In this post I will be growing your understanding of how to make money in real estate no matter what market you are in.

The Basics

To be able to determine which strategy you are going to pursue at any given time you need to understand where you are in the market. For the sake of simplicity and keeping this post short there are 4 basic parts to a market (you can see this from the picture above):
1. Recession is sometimes called a buyer's market and takes place when the market is down trending 
2. Recovery is basically the bottom of the market where it provides a solid base from which to grow for a while
3. Expansion is often called a seller's market and is when a market is growing in prices and building on the momentum gained from a market's recovery
4. Contraction is basically the top of the market where prices are about to turn downward (supply has grown beyond the demand for properties)

Types of Real Estate Transactions

While I won't go into deep detail here (I will explain these concepts in a later post). You need to come up with a basic real estate investing strategy before you begin investing. Where are you going to make the bulk of your money? There are two basic strategies when it comes to making money in real estate. The first is long term buy and hold strategies and the second is shorter term flipping strategies. Here are some examples of both and what you can do with them in different markets

1. Buy and hold

This is a long term strategy (For me a buy and hold needs to last over at least 7 years) and you can help yourself in this strategy no matter what the market is giving you
     -Recession: This is the time to purchase new properties at a discount! Even though the market may not be at the bottom yet, the money you are saving in a great deal and the security of knowing you got a great deal will make up for it in the long run. It isn't the person who hits the exact bottom with a purchase that wins, it is the person who consistently gets great deals, period.
     -Recovery: Paying attention to this end of the market pays off as well. If you have any capital left, now is the time to purchase another property or two. While the deals aren't as good as in recession, you can do something quick because it is most likely that you won't get a better chance for another 7-10 years or so. It's time to shore up your portfolio and get ready to focus on managing properties.
     -Expansion: The opposite, in many ways, to a recession market. Now is the time to refinance and/or sell certain properties you currently hold in your portfolio. Why would you sell at this time if your strategy is to hold? Because you may have started your portfolio with a single family home and want to pick up a suited place when the market trends down next time. Another example is offloading suited properties (maybe a few) and then getting in on larger multi-family properties later on (possibly a building with 8 or more doors). Expansion is also a good time to lock in some of your good tenants for a few years if possible at fair rates and find better tenants in the properties that have had less than ideal tenants up until now because this market is usually mirrored in the rental/tenant market; many tenants and less properties to choose.
     -Contraction: Now is the time to simply refinance your properties. Make sure not to over-leverage yourself (See my post on cash flow), but also make sure you are pulling money out of properties when the money is good so you can expand your portfolio in the coming few years.

2. Flips

There are a few types of flips. The most often used are: purchase fix and flip, rent to own, and wholesale deals. I don't consider flips a valid type of investing because they fit better into a simple business plan; I see these as viable business strategies to put cash in your pocket or into buy and hold strategies, but these aren't technically investing for me because they are simply cash and you are basically only making money on 2-3 of the 9+ ways to you can in real estate investing. If you want more information on all the ways to make money when investing in real estate please visit the many posts I have, to date, on the various ways to make money in real estate (see: 'Why Real Estate is The Best Investment' on the right-hand side of this page under 'categories').
     -Recession: Rent to own deals, if the focus is about a 3 year option at least, can be done at this time because they take a little while to set up and the purchase of a property for good rent to own deals (discussion for another post) in the best interest of the tenant/buyer can be picked up at a great price. Wholesale deals are ripe for the picking at this time in the market. You can pick up fantastic deals and, as long as you have your investor pipeline set up, you can immediately turn them around to people looking for good buy and holds. I would recommend holding off on fix and flip deals unless they are larger projects you are doing on your own with little help from outside contractors because fix and flip deals need to be short term to consistently make good money. An example of a fix/flip that works in recession is an infill. For early stages of infills, this can be a great time to get into a property.
     -Recovery: Now is the time to really move on purchasing any type of flip. Every strategy should work if it is purchased at this time because you make your money in a few months from now (for the most part) when things continue in stability or begin increasing in market value.
     -Expansion: Early expansion can be even more lucrative than recovery, but this is now a time to be closing down your deals rather than getting into them. There is no single individual on the planet who can tell you what the market will be in 6 months. An example of this in the Calgary market is that we were gearing up for later expansion when oil prices tanked. This sent us very quickly into the contraction market stage and now we are in recession. Again, take what the market gives and don't get greedy. There is always more money to be made if you are patient and take what the market offers. There will always be another expansion... just wait for an average of around 8-12 years.
     -Contraction: If you have any flips in your portfolio now is the time to get rid of them, even if it is at a discount. You NEVER want to be holding a flip on the way down in a market because you will end up chasing prices the hold way. I have two real estate agents in my family and they have told me multiple stories of many people holding out for another $5k and because they were a little too greedy didn't follow professional advice and chased the market all the way down. These people tend to lose tens of thousands of dollars (one example was about $150k) because of their greed.

Tip: One way to consistently make money in real estate for many years is to 'always leave money on the table'. I will always choose to lose a few dollars today to make hundreds of dollars tomorrow. If you squeeze people out of every penny a deal is worth you will ruin relationships and end up with less deals in the future. Remember that 50% of a smaller pie is always more money than 100% of a big deal that falls apart.

Summary

The biggest reason I invest and encourage others to invest in real estate is it's versatility. You can make money in every market in real estate and you can make money in many, many ways in real estate (again, read my former posts on the subject of the various dimensions of real estate because it is too much to cover here). If you invest in stocks, precious metals, or  you have very limited options compared to real estate. From the people I talk to it seems like average mom and pop type investors would probably disagree with a lot I've said here. I've made sound arguments that any market you are currently in is a great market... you simply have to take advantage of your opportunities by investing in your own education or paying someone who knows more than you to help you out.




Here's to your future of risk-averse investing!

If you would like to learn more about investing in real estate please contact me at the email address listed at the beginning of this article or go to my website at: www.akerahomes.com/investing-in-real-estate.html