How to Collect More Than
100 Percent Rent
​​© 2018  BY M. MITCH FREELAND
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“People think landlording is dealing with people—but I deal with machines too. The only difference is, is that machines can be fixed quickly—with people it takes years.”
 
In the real estate business, it’s called ancillary income—income derived from other sources outside of rental income.  Ancillary income can be many things: coin-op laundries, soda or vending machines, cleaning service, pet fees, and almost anything you have the imagination to charge a fee for—including late fees.
           
A common add-on fee is caused by late payment of rent.  You can charge 10% after the fifth day. You could also collect the interest from deposits—and of course, you charge an application fee. All states are not the same, so check with your state regarding how much you can charge for late fees and whether tenants are required to receive interest on their deposits.
           
I had a tenant who did not get her pay check until the 15th of each month.  Since rent was due on the 1st of the month and late after the 5th, this tenant could never save enough money to pay by the 5th of the month.  She always paid her rent every month on the 16th.  The tenant’s rent was $750 per month and a 10% late fee of $75 was routinely charged each month.  She paid the late charge every single month—like clock work.  It was paid each month for over a year this way.  She was so consistent about paying on the 16th of the month, we stopped notifying her of her late rent—it always came in at the same time each month with an extra $75.  That is an extra $900 at the end of the year for those of you counting.  She was a good tenant who paid up, albeit late, each month.
           
There are many ways to increase your cash flow and to collect more than 100% rent.  Here are a few common ways to make more than just rental income:
 
(1)   Application Fee.  An application fee should be charged to everyone who wants to rent from you; a $50 minimum fee with an additional fee of $25 per adult (18 years of age) living in the unit.  This fee is nonrefundable and part of it will be used for credit checks and your time to call references and employers and to verify other information on the application.          
                                   
(2)   Late rent fee.  This was noted earlier with an example, but typically, you should charge a late rent fee of 10% of the total amount late.  Hopefully, you will never need to collect a late rent fee—but this would be highly unlikely.  Late rent fees do add up, so don’t neglect to collect them and make it a business practice that your tenants know they have to pay up when they are late with the rent.  Notify tenants that you have to pay your billed by the first of  each month, as well.  And if you do not pay your mortgage and utility bills on time, you are charged a late fee.
 
(3)   Pet fee. Nearly 50% of all households have pets.  If you decide to not allow pets, you will alienate a large possible tenant population.  You will also eliminate the possibility of receiving a monthly pet fee.  Pet fees can range from $10 to $50 per month or more, depending on the pet and the number of pets per household. 
     
Pets can also cause damage, so we take on an additional security deposit of $25—with large dogs you can charge $250 per dog.  The extra income you make by accepting pets is well worth the damage they may potentially cause; this is especially true when you have the same tenant for many years.  The nice thing about charging pet rent is that it costs you nothing to implement.
 
(4)   Soda Machine.  With an apartment building of 15 or more units, a soda machine can gross between $150 to $200 per month.  You can purchase soda from 23 to 28 cents each and charge 75 cents to $1 per can.  Electricity to run the machine will cost $30 to $50 per month depending on your location.  Soda machines are free from Coke or Pepsi distributors as long as you buy your sodas from a distributor.  A distributor will also deliver to your location. Operating a machine, however, does require some work and may not be worth the hassle for a monthly net profit of $100.  If you have a larger apartment building of 40 or 50 units, then you could show a monthly profit of $300 to $500 per month.  You will need to stock the machine about once per week.
 
You will also need a place to store the sodas. You can use a storage closet at your apartment building. Make sure to put a good lock on the door to prevent break-ins.
 
Increasing cash flow is one of the most important concepts to the proactive investor. The ideas presented here are from the book The Millionaire Real Estate Landlords.  Investors serious about making money in real estate and increasing cash flow should obtain a copy of the book Cash Flow & Co.: A Super-System for Real Estate Investors; this is a book designed specifically for the aggressive investor looking for ways to increase cash flow and receive more than 100% rental income. With seventy proven ideas, this book is referred to as the “Bible” of ancillary income and is scheduled for release in Summer 2019.
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​Buying Real Estate:  Which is Better Price or Terms?
© 2018 by M. Mitch Freeland


​​Some real estate experts feel if you cannot get the price you want for a property, at least you can try to get favorable terms from the seller.  It is not a very good idea to fall into this trap.  In most situations, price is definitely more important and profitable than terms.  The price you pay will allow you to sell quickly, when you need to, and for a profit.  If you rely on terms, you are generally obligated to hold the property for a longer period of time than you may be comfortable with or had planned on.  Here is an example of what we mean:
 
You find a house advertised “No Money Down, Owner will Finance”.  You talk to the owner on the phone and he tells you the house is for sale for $200,000 and he will carry a note for the entire amount at 10% interest over 10 years and amortized over 30 years. 
            After further investigation you find the following:
 
            1.  The comparable homes in the area are priced at around $170,000.  This makes the house 17.6% over priced.  But still, you are not interested in buying at market, you want below market.  So, the property is actually close to 40% over valued to you.  You should be buying the property at about $120,000 to $130,000 depending on the amount of fix-up it would need.
 
            2.    The house has been completely rehabbed.  You cannot add any value to the property.  You can not force appreciation; there is nothing for you to do to make the property more valuable.
 
            3.  The monthly mortgage payment is $1,755, with a balloon for the balance at the end of 10 years.  You realize the rental rate in the area is $1,400 per month for that type of house.  This will give you a negative cash flow of $355 per month.  You further realize the market has slowed and inflation is low.  Real estate in your area is forecast to appreciate about 3% the next couple of years.
           
On the terms offered buy the seller, you may think, “Great, no money down and I don’t need to go to a lender and get financing; this is an easy deal.”  Wrong.  It’s ridiculous to think that terms can beat price on any transaction.  Lets breakdown your possible loss: (1)  $30,000 over comparables; (2) $355 per month negative cash flow; (3) property taxes and insurance of  $3,600 annually; and (4) $1,000 miscellaneous expenses, repairs and vacancies.  You will have negative cash flow of $8,860 your first year and a $30,000 equity loss because you over paid for the property.  If the property appreciates 3% for the year, it would only appreciate from the comp rate of $170,000, the average home price in the area; and 3% appreciation from that figure would come to $5,100.  After the first year you would still end up losing about $33,760.  Some people get caught up in this trap; don’t let it be you.  It would take many years for you to come close to breakeven.
           
There is a flipside to this story.  If you are the seller and you are trying to sell the property at 17% over the current comp price and secure a high interest note with the buyer, then it could be a good deal for you to sell on terms. However, danger lurks. With higher monthly payments than what can be collected from rents, you may want to sell to an owner/occupant rather than an investor.  An investor will have to deal with the negative cash flow and there could be the possibility the investor grows tired of being in the red.  And you may even have to foreclose if the investor folds under the pressure.
           
Another situation where terms are actually good for you as the buyer is when the property price is low enough to show you a handsome monthly cash flow.  Securing good terms from the seller when a strong cash flow is possible is a good situation when you do not have to come up with much money for a down payment and you have the funds for the repair work covered.  It is more difficult to get positive cash flow from a rental house with very little money down, unless you buy it for a very reasonable price. Multi-family properties have a greater probability of showing good cash flow with a low down payment (10% or lower) and good terms than a single rental house.  However, a single rental house will typically have lower tenant turnover and is usually less management intensive.


​5 Ways to Getting and Retaining Good Tenants
​© 2018  BY M. MITCH FREELAND


​A good tenant is really worth his or her weight in gold. That might seem like a common compliment, however, it is very true—ask any landlord. Better yet, ask any landlord who has had bad tenants.  I have managed hundreds of tenants over many years, and have learned a few things about attracting and retaining good tenants. Here is a quick list to check and find good and qualified tenants:

  1. A tenant should make 3 to 3.5 times the rent in monthly income. If the rent is $1,000 per month, the tenant should have a monthly income of $3,000 to $3,500. Income of $3,500 per month would certainly be better.
  2. A tenant should have a good and long job history, and preferably with the same company.  If a tenant has been with the same company for many years, it shows a pattern of responsibility and consistency. 
  3. The tenant is family orientated.  Tenants with young children are great. Children encourage conscientious responsibility.
  4. The tenant preferably has a checking account and credit cards, and a clean and newer model car. 
  5. A tenant should have reasonably good credit.

​To learn more about getting good tenants get your copy of The Millionaire Real Estate Landlords. Secure your copy today


​How to Bid Correctly at an Auction: Your Top 5 Ways to Bid and Not Over Pay
​© 2018  BY M. MITCH FREELAND

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​“Auctions are full of manipulators. The only way to get your price is to determine in advance the highest bid you will make and never go above it--ever.”
 
Have you ever been intimidated, confused, anxious, or boondoggled at a real estate auction? Sooner or later, if you are serious about making money in real estate, you’ll get excited about the auction process and the deals or steals available will wet your appetite. After you’ve located a property that fits your criteria, you’ll attend the auction and try to purchase the property with the highest bid—your bid.  Here are five ways to bid correctly at an auction and not over pay.
 
            (1)        Know your market well.  Knowing your market well is critically important.  The number one reason people overpay at auctions it that they do not truly know their target market thoroughly enough to access an accurate price on the property being bid for.  If the property you want to bid on is a three bedroom, two bath house, you better know what a three bedroom two bath house is going for in your neighborhood.  If it’s a four bedroom—know what a four bedroom goes for.
 
            (2)  Liens and other encumbrances.  Courthouse auctioned properties do not come with a clean title.  You’ve got to check the recorders records of liens, taxes and judgments attached to the property.   Sometimes it is hard to locate these encumbrances. 
 
We (Brother John and I) purchased a property several years ago at a courthouse auction for $52,000. We paid cash, same day as required. We did our normal searches and found the property unencumbered.  To our shock, about a week later we received a letter from the city saying we owed $320,000 on a code enforcement fine that had been running for over two years.   The previous owner had a tough time with local code enforcement.  We were either going to get this reduced to zero, zilch, or we were going to loose $52,000.  The property was a fixer-upper and was not worth more than $100,000 as it stood.  After explaining our case and how we planned to fix up and beautify the property, the lien was dismissed.  But if it hadn’t been, I would have never bought another property at a courthouse auction and I would have ended up suing the city for fraud or something, since the code enforcement lien was hidden from public record, so we thought.  Eventually, the property was fixed, rented and flipped a year and a half later for somewhere in the neighborhood or $190,000.   Fix-up costs was about $10,000, showing us a healthy profit in the end.
 
            (3) Set a price.  Again, knowing your market well will give you the knowledge to set a firm price you’ll want to pay for the property.  After you’ve figured out the fix-up costs and recording fees, auctioneer’s premium,  and other fees, you’ll have to know the “after repair value” of the property.  After you know the post-rehab value, then you can set a price for what you’ll pay for the property.
 
For example, many times a house that may need some rehab will sell for about a third of its fixed up value.   Here’s the rundown:  You find a house at the auction you like. Fully rehabbed homes in the area are selling for $150,000.  You estimate a fix up costs at $20,000.  A third of $150,000 is $50,000.  With $20,000 allocated to fix up, you’ll be in for $70,000 after everything is said and done.  This gives you plenty of room to work with.  Remember, most of the properties you bid on at the courthouse, the ones the banks do not want, are junked properties and some may need serious fix up to them.
 
            (4)  Know the premiums.  Before you make a bid, you should know all the premiums you’ll be paying.  A 10% premium is standard in many private auctions; for example, if you are the willing bidder on a house for $50,000, an additional 10 percent or $5,000 is added to the price.  The $5,000 is the auctioneer’s fee.  Recording and stamp fees could also add up to 1% to 1.5% on average, and there may also be other fees and premiums involved. 
 
            (5)  Watch the action first.  Never be the first one to bid at an auction.  Watch the action first and always wait for the last moment to raise your paddle or call out the number of your offer. Sometimes property gets bid up quickly by uninformed and inexperienced investors.  And sometimes in certain local courthouse auctions, a handful of speculators who regularly attend and bid on property raise prices by bidding up properties, and then dropping out, leaving the inexperienced buyer with a property that had been overbid, and is now overvalued. This is done so the new investor is dismayed at the whole process and never attends another auction.
 
Not all properties offered at an auction are worth your while.  It’s important to set your objectives and stick to them.  Never forget the reason why you are buying—you are an investor and buying property correctly takes intelligent, dedicated work.  And it is a process few investors master. But it is away of acquiring investment property for good prices and it can be mastered with intelligent effort and a clear objective.  Follow the steps outlined above and you’ll find yourself on the better end to profits.  Do your homework and know the market for the type of property you will be bidding on; know your market well, the fix-up costs and the eventual resale price.


​TOO MUCH PERSONAL PRIDE IN REAL ESTATE SALES
©2017 by M. Mitch Freeland


​It’s not what you do sometimes that doesn’t make you a success in real estate sales; it is what you refuse to do because of personal pride.  I’m not talking about having pride in your work or taking pride in your appearance, I’m talking about pride by believing you are “above this” or “above that” when it comes to work—that is, work that is necessary to grow your business, expand your venture or make you a better you. 
 
Let me demonstrate what I mean here so we’re all on the same page.  For our example, let’s say you are a real estate agent—a very mediocre one at that.  You closed four transactions last year and made a whopping $24,000.   If all you are making is $24,000 and you say you are a full time agent, then why are you in this business, you’re a fraud—you’re pretending to be something you’re not. A professional, full-time agent should be making $100,000 per year.  You are completely independent to work as hard and as intelligently as you possibly can and your income will be evidenced by how much effort you put out.  To boost your income, you’ve got to meet more people, market yourself (promote), and simply hustle to get the business.   Many people do not succeed because they are unwilling to due activities that might make them look average, foolish or beneath their dignity.  If the activity or task is not immoral or unethical, and if it does not offend God, then our activity is perfectly all right. For example: Have you ever seen a car with magnet signs all over it advertising the services of a real estate agent and said to yourself “How tacky—I could never do that.” 
 
Have you ever walked up and down streets, knocking on doors and meeting homeowners, introducing yourself and asking if they are in the market for selling or buying another house or investment property?  Have you ever seriously farmed an area heavily for two years, getting to know many of the resident home owners, and getting to know them on a first name bases?  Some agents would rather go broke than work an area on foot. Smart agents know that you have to get in front of customers to get listings. They also know that people do business with people they know, people they like and people they respect.  When you are out there hustling, meeting people, and working hard, you will earn the business because you will earn the respect of customers who witness to your efforts. Don't let personal pride stand in the way of your success. Get out there and meet lots of people in your neighborhood.
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The 5 Top Principles to Investor Longevity in Real Estate
© 2018  by M. Mitch Freeland


​​Investor longevity is a rarely achieved goal for many investors. The reason behind investor failure or disenchantment is the result of many factors; and two many to mention in this space.  However, there are five powerful reasons for Investor longevity: (1) Research and diligence; (2) know why you are doing it; (3) don’t over spend; (4) take risks; and (5) managing assets consistently.
 
1.  Research and Diligence.  To make prudent investments you must do the appropriate research on the property, its location and the costs associated with fix-up and the price you will sell it for after it has been rehabbed. You must know the local economy and in what price points properties are selling quickly. 
           
Much of your research can be completed online and the county assessors site and other real estate websites such as www.Realtor.com can be very useful.  These sites will give you the necessary information as to prices and comparables, and the properties legal description. 
           
Conducting due diligence on the full package; for example, local growth, business development, rental rates, city incentives and many other informative measures should be researched if you are new to an area and unfamiliar with investment property.    
 
2.  Know Why you Are Doing It.  Follow your plan.  Your plan has a great deal to do with your goals.  Do you ever ask yourself, why are you doing this or that? And how do you reply to yourself?  “I have to get it done,  or, do you stop, think for a moment and reply:  “Why am I doing this?” Then stop doing it and concentrate on doing something more worthwhile with your time and energy. 
           
The purpose for what you are doing should be in the foundation of your goals.  It must be a means to an end. And if it isn’t, then stop doing it and focus on activities that will move you toward the achievement of your goals.
 
3.  Don’t Over Spend.  Always look for ways to reduce your operating costs and keep close watch over your expenses. When you are rehabbing, set a firm budget and find ways to narrow the budget as you progress; it will not be easy, but keep this in mind. Your rental properties do not need the best fixtures and items--they need clean and functional items.
 
4.  Take Risks. Have you asked yourself:  What is the indirect costs of not taking risks?  Everything worthwhile has a risk to it, and real estate investing can certainly be risky if simple rules are not followed.
 
Typically, the larger the risk, the higher the return, is a saying that is not always correct with real estate investing. A great deal of successful real estate investing is knowing more than the other fellow who is bidding on the same property or not bidding.  Your knowledge of costs associated with repairs and current market conditions, your relationships with contractors, inspectors and mortgage brokers, and your money management skills are the advantages you possess over others in the real estate investment game.
           
Every investment is unique and the risks associated with each property you purchase will be more or less risky than the previous one, but may present a higher profit return with more or less equity at risk.  Be courageous. Risk is necessary for your personal growth and the growth of your wallet. Always evaluate the risks involved with any transaction first.  How much can you lose on the investment and can you handle the loss, psychologically and financially.  You must also know what the upside is before you buy.
           
The indirect cost of not taking risks is future security.  For, there is no security in poverty or mediocrity. And there is no security in any action or non-action you take.  Don’t let fear hold you back; take advantage of the opportunities presented to you today, for they may not be there tomorrow. Poker great Doyle Brunson said:  “Feed your courage and your fears will starve to death.”  We couldn’t agree more.
 
5.  Managing Assets Consistently.  When you are in a position to buy two or more properties in a short period of time and each property is in need of renovation before it can be rented or sold, evaluate the properties and budget your funds and your time equally among the properties. There would be only a few occasions, outside of adequate funding, that you wouldn’t begin renovating the properties around the same time. Don’t make the mistake of buying properties and have them sitting around for months before you begin work.  Your carrying costs will soon eat away at your bankroll, this is the money you’ll need for renovation. Your time will be limited, so make sure you have honest and capable contractors. You could use one general contractor to manage construction crews at each property. 
           
When you begin on the acquisition trail, manage your rentals consistently. When it comes to managing rentals, many investors neglect less valuable and troublesome properties and spend more time with properties that are closer to where they live and have better tenants--that is the wrong approach, and it should be the exact opposite.  You should spend more time at your troubled properties and get them up to par or simply put them up for sale and exchange them for better and more profitable investments.


​The Top 5 Places to Find Bargain Real Estate
​​© 2018  BY M. MITCH FREELAND

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​“A bargain is not simply buying a cheap piece of property. 
A bargain is holding the property cheaply.”
 
This is the debut essay  of the “Top 5” weekly article series.  For some time now I’ve been thinking: “Why does everyone have a “Top 10” list when a “Top 5” can do the trick with the most essential and effective information per the particular topic?”  Items 6 through 10 are usually filler and not of much importance compared to the essential “Top 5.” There is a website I recall called “Top7business.com.”  Here you will find articles with headings using the words, “Top 7 Ways and Top 7 Things and Top 7 Reasons, 7 this and 7 that” and so on.  Why seven?  The number seven is considered to be a lucky number and most people seem to like the number seven—looks good, sounds good, feels good, feels right.  But other than that, I think a “Top 5” list cuts through a lot of the unnecessary reading and time spent thinking about items 6 through 10.
 
The important thing is getting through the article quickly and getting down to business with the right information to propel you in the right direction for fast results.  So, each week, part of my blog, I will present a new series of writings covering the “Top 5 ….”  They will be concise—to the point and readable in less than three minutes.  This will arm you with the information you need quickly.  If you are interested in a particular “Top 5,” email us and let us know.  We will design a “Top 5” list for you.
 
Don’t get us wrong, we will still offer lengthier articles that get a bit more in-depth.  We know there is just so much that can be said in a “Top 5” list.  The idea is to present information to you quickly, concisely and effectively, and let you get on your way.  Now, as the article states, let’s move to the Top 5 Places to Find Bargain Real Estate.
 
*     *     *
 
As you may know, bargain real estate is everywhere you look—you just have to look for it, keep your eyes open and be observant of what’s around you.  Here is our Top 5 Places to Find Bargain Real Estate:
 
            (1) Online.  Begin with the MSL (Multiple Listing Service).  If you do not currently have access to the MLS go to Realtor.com or Loopnet.com for multifamily and commercial property. For single-family homes, you would search the MLS and Realtor.com.  You can also go to eBay and look for property in your target area or in areas that fit your criteria.  As you mature as an investor, you may want to expand your search area.  If you are planning to “flip” properties, you can buy anywhere, provided you are buying at a low enough prices to insure a reasonable profit.
            These three primary websites (MLS, Realtor.com, and Loopnet.com), will allow you to access information quickly and you can obtain preliminary info for selected properties without leaving your house—that is, if you have an internet connection at home; during this day and age it is essential.
            You must know your target market to make your visit to these sites worthwhile.  If you start at Realtor.com, these are the steps you take to begin your search:  (1) Enter the zip code of your target area.  You can also enter the city and state if you do not know the zip code; (2) while searching for single-family homes, enter your price range in the spaces indicated. You are looking for cheap property, so enter amounts like $20,000 to $100,000.  You will have to know a little about the price ranges in your target area, but starting low will present some excellent property choices that pop-up on your screen; (3) next, enter number of bedrooms (make it three) and number baths (make it one); (4) on the left side of the screen, check the single-family home spot and delete all the others.  You are not interested in land or condos—only singe-family homes; (5) look for homes that are at least 1,000 square feet in size; and finally (6) press enter and check out what pops up.  Start from the lowest priced houses and move your way up.
            When searching for properties on eBay, pay close attention to houses and property for sale with “no reserve” price.  You can do a lot of research right on the internet if you are not familiar with a particular area.
 
            (2)  Drive the area.  Once you’ve decided on a particular area (target market), drive up and down the streets slowly and look for signs, such as “For Sale by Owner,” or “Foreclosure,” or other signs indicating a possible distress sale.  Get to know the area.  Call on signs of houses that are unkempt, rundown. These types of properties could be good investments with motivated sellers.  Motivated sellers sell at bargain prices with good terms.  Remember this, fair terms and a low price equals bargain.
 
            3)  Other landlords and investors.  One of the best places to locate bargain property is from other landlords and investors who are overextended or retiring from the business.  Joining a local real estate investment club could start you in the right direction to meet other investor or obtain referrals.  Many of the bargains my brother John and I have purchased came from other investors.  This is also a good way of acquiring a bundled package of properties at a good price.
 
            4)  Neighbors and acquaintances.  Let your neighbors and acquaintances know you are a real estate investor and open to investing in all types of property.  You want them coming to you and dropping you referrals.  Someone always knows someone who wants (needs) to sell and is looking for a quick and painless closing.
 
            5)  Auctions.  The two most popular auctions are held at your county court house, or auctioned by U.S. Home Auction. Nearly all the homes are foreclosed properties.  Some good deals can be had at auctions, but bad ones can be had too.  It takes time and research on your target property if you plan to bid at an auction.  Property at courthouse auctions may have city leans and other encumbrances attached to them; hence, you should do enough research to ease your mind before biding.  And again, you will need to know your target market very well, not to over bid. 
 
Post-foreclosed properties that are owned by the lender can typically be purchased at a discount.  You will usually need to make a cash offer (your cash or someone else’s) to get the deal accepted.
 
Always estimate how much you will be investing in fix-up dollars before you bid on or buy any property.  Stick with a 50% to 60% percent per return goal on property and fix-up costs.  With a reasonable margin, you’ll be able to sell in an emergency at a good price and still secure a worthwhile profit.

For more information on where to find real estate at bargain prices and how to flip houses like a pro, get your copy of The Millionaire Real Estate Flippers (a comprehensive book to give you the confidence you need to jump into the lucrative world of flipping fixer-uppers).

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​DOES RENT CONTROL DESTROY PROPERTY VALUE?
© 2017 by M. Mitch Freeland


​Free market supply and demand dictating prices of rents are completely side tracked when city governments place price caps on rental rates.  This practice will typically cause prices of rental properties to drop over the long-term or cause slow growth to make it unappealing to investors and future development.
           
Rent control is nothing more than a socialist act.  It restricts the owner of a building to charge what the market demands.  Most liberal cities have areas of rent control.  In fact, it is a way of social service; local governments adoption in support of renters. This is in direct responds to the so called “defiant rich” and once powerful landlord.
            
Rent control has several effects on property values. Most economist agree that it is not a constructive measure, and that it has the opposite effect of rents in surrounding areas and only benefits those who are “sitting tenants” in the controlled area.
            
Rental rates rise in the uncontrolled areas and around the controlled area.  This is because of short supply of rentable units caused by controlled area tenants remaining for very long periods of time.   Rent control also has a way of creating pressure on investors to invest in communities far outside of controlled areas. 
            
At the same time, new investment in multi-family housing in controlled areas is diverted to other areas.  Investors do not want to be stifled by building in rent controlled neighborhoods.  A study has also shown that current controlled buildings are not maintained by landlords because there is little need to attract new tenants; there are typically tenant waiting lists for controlled units.
            
In fact, nearly a third of controlled properties are in a state of severe disrepair.  On the opposite side, only 8 percent of non-controlled  properties are deteriorated. (Walter Block, “Rent Control,” The Concise Encyclopedia of Economics,  The Library of Economics and Liberty)
            
There are a number of obstacles investors must overcome in rent controlled areas. The problem to increase cash flow is one of the most important concerns.  A landlord cannot raise rents even during times of high inflation or when demand warrants it.  Because of this, and many other growth options, property values have had a tendency to not appreciate as well as property in uncontrolled areas.  Naturally, there are simply fewer investors interested in buying in a rent controlled area.
            
Whenever government places controls on rents, it has proven to be a loosing proposition for investors.  Even in areas were there is a perception that rent control may be instigated in the future has caused investors to stay away.  Therefore, investors should stay clear of rent controlled areas. As noted by even a socialist economist, Assar Lindbeck:
 
“In many cases rent control appears to be the most efficient technique presently known to destroy a city—except for bombing.”  (Walter Block, “Rent Control,” The Concise Encyclopedia of Economics,  The Library of Economics and Liberty)

​
Does Cash Still Talk in Real Estate?
© 2016 by M. Mitch Freeland


​It is understood by most successful real estate investors that cash has a way of talking to people and I would agree.  Nearly every offer I write up is not contingent on financing; I make it a cash offer.  That doesn’t mean it is my cash all the time, it’s somebody’s, but not mine.  Other times it is cheaper after you have done a few deals to buy bargain basement, fixer-upper property using your own cash and financing it after you’ve completed the repairs if you plan to hold it for a while.  This way you get a lot more cash out of it should you decide to hold the property for a longer term.  Here is an example of how it would work:
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You find a fixer-upper and get it under contract for $110,000.  You tell the seller you will pay all cash and you can close fast, within two weeks or upon receiving clean title.  The seller is motivated; however, he does not want to hold any paper (seller financing).  You cannot get a traditional loan because the house is uninhabitable; besides you have average credit.  You can go to a hard money-lender and get a loan, but that will cost you 2 points and 15 percent interest and it will be due in a year.  You have some money saved, so you decide to use your cash of $110,000 and another $25,000 for the repairs. You know the house will be worth about $300,000 when you’ve finished.  You decide to refinance the house for $250,000 once all repairs are completed. The house is finished two months later and the house, being in excellent condition, is appraised at $315,000.
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​Are all Landlords Rich?
© 2016 by M. Mitch Freeland


​​Most people think all landlords are rich; however, that isn’t necessarily the case.  Many new investors and landlords, who have been investing for a few years, are not rich. They have more than most people, but they also have large mortgages on properties and little positive cash flow if any. Many are working hard to build a real estate portfolio one property at a time.  They are focused on the long-term, and the benefits of cashing-out with a large retirement nest-egg. They are not yet millionaires, but many landlords are on their way, and they will be millionaires in the near future, should they remain consistent with their real estate investing.
           
Most real estate investors, who have been investing consistently for a period of seven or more years are millionaires; they have a net worth over a million dollars.  And some are doing well with over 10 million in net worth. These are average people who stayed the course through thick and thin and worked hard at their real estate investing. Persistence, diligence, tenacity, discipline and a positive attitude are common attributes of many millionaire real estate investors.
           
There are more millionaires created from real estate than any other investment class.  This is because, over time, inflation works its magic in most locations.  And many who have purchased the home they live in and hold onto that home for decades can simply build a large long-term equity position in their property(s).

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​Why Developers Charge Greater than Current Market Prices, and How can You Benefit From This?
© 2017  BY M. MITCH FREELAND


​​Is government meddling the cause of high real estate prices? We all know that Developers need a large amount of capital to complete a project. We also know that much of the money used is borrowed.  Construction loans are common and all builders use some type of financing. When local governmental planning departments levy heavy requirements of cash reserves on developers, it usually takes longer for the development to be completed and prices are generally increased on the real estate being built.  Usually, the longer the project takes to develop, the greater the end price will be for the buyer.  Developers will pass the cost burden onto buyers, and property values will typically increase in the general vicinity.
 
Because of burdensome requirements from building and zoning departments, developers have been forced to stretch timetables for completion of projects into the future.  This long process costs the developer much in the form of interest payments, workers compensation, property taxes and a slew of other expenses over a long period of time.  The only recourse for the developer is to increase prices to the eventual buyer.
 
Learn more about how government intervention increased property value and where investors could make smart investments get your copy of The Real Estate Hustle. 

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WHY DO BOTH HGTV AND DIY NETWORKS HAVE SO MANY FIXER-UPPER AND FLIPPING HOUSES SHOWS? 
© 2016 by M. Mitch Freeland


​​The simple answer to the popularity of fixer-upper shows is the premise of attacking an ugly house and making it beautiful—or maybe it is Chip and Joanna Gaines and their stunning personalities. Perhaps? But more likely a combination of comfortable, cozy, and warm interior and exterior designs with two personalities that complement one another.
 
The business of flipping fixer-uppers is part art and part business. To do a successful fixer-upper you have to think artistically--have the imagination to see the finished product. As for the business end of it, you have to run the numbers, do your comps, and sell the property for a healthy profit.
 
What is Flipping Houses Exactly?
Flipping is buying a property and holding it for a short period of time, usually under a year, then selling it for a profit.  Most flips, and we would assume (no information to support our assumption) that 99% of all flips are sort of slimy. To get the best deals (prices), you need to get the houses that have been seriously neglected--the ugliest of ducklings pay the largest return on investment. The house that nobody wants--nobody except an experience, professional flipper.
           
Flip properties are properties that are typically rundown when purchased, fixed up or completely renovated and resold at a reasonable market price.  They are typically purchased at low prices because they are usually inhabitable in their current condition or have had interiors that are extremely outdated and unwanted among the vast majority of buyers.

​Plain Flip
You purchase a property at 20% below value; you think it is a good deal.  You then resell it without doing any fix up work to it.  You price it 5% to 10% under appraisal for a quick sale. You sell the property yourself to minimize your costs. You make about 7% to 10% on the value of the house.  If you paid a commission to an agent you would make about 3% to 5%, on average.  The percentages are not big enough considering the risk.  I do not recommend doing a “Plain Flip” unless you acquire the property at 60% of appraised value.
 
Quick-Fix and Flip
This is the correct method of doing a flip that will ensure you the greatest return on investment with the least risk. A quick fix is typically two to three weeks.  However, many of the projects you will undertake will take about four weeks.  Here you will be adding value to the property by making improvements that will force the appreciation and give you the advantage to make a much greater return on your investment. Here is an example of a quick fix.
 
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You purchase a post-foreclosure fixer-upper for $105,000; it is a 3 bedroom, 2 bath house in a lower working class neighborhood, with 20% down ($21,000).  You assess the fix-up to costs $15,000 and it will take about three weeks to fix.  The fixed up homes in the area are valued at about $180,000.  You decide to list the property for $170,000 after it is fixed.  Your costs including fix up is $122,000, carrying costs of $2,000 included. Two months pass and you get the property under contract for $165,000. You sold the house yourself and saved 3% sales commission, but you also paid out 3% or $4,950 sales commission to the buyer’s agent and another $900 in closing costs and title insurance.  Your total purchase price, and costs total $127,850, less your sales price of $165,000 and you have a profit of $37,150.  The transaction closed in 30 days and you made 30% in three months.  You put up $21,000 cash $15,000 for fix up and another $2,000 carrying cost.  Your profit is almost 100% from the cash you put up (Total cash outlay: $38,000 vs. $37,150 profit).
 
 The house in the photos was one of over a hundred fixer-uppers we completed.  The house was purchased from a foreclosure auction for $93,000.  Fix up costs was $33,000 and the house was appraised at over $235,000 after fix up.  If you would like to participate in fixer-uppers with us, shoot me an email: MMitchFreeland@gmail.com 


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​How to Sell Real Estate Quickly in Any Market:  Your 5 Step Plan
© 2016 by M. Mitch Freeland


​Whether you are an investor, real estate agent, or homeowner, selling your property quickly is essential in almost all cases. There is a reason for selling and the seller must consciously understand this reason and to act expeditiously with good judgment to make it come about.  More money is lost my property owners and sales agents not understanding the basic rules of selling—that is, following the rule governed by product “value.”  What does the customer “value” from the product you are selling, your property?  Show them the value and they’ll buy, and they will pay your price or close to it.  It is as simple as that; yet, many sellers do just the opposite.  They try to convince themselves the value of their property instead of trying to convince the buyer.  This is one reason properties sit on the market for long stretches.  Another reason is that real estate professionals listen too much to their customer when it has to do with listing price. Sometimes agents take the listing even when they know the listing price is too high.  Agents do not do the necessary research revealing the properties true value to the greater majority of buyers. And sellers do not do the required market research, personal property inspection, or prepare the property for sale, before listing it.
                                                                                          
A lot has been said and written about selling property quickly and getting the most out of it, and a lot of articles in numerous magazines address this subject in generic form.  Much of the information available these days from books and articles about selling property for top price is always somewhat useful, but not entirely complete, leaving many questions among readers, and property sellers still to be answered. There are always too many variables when it comes to selling real estate.  This is because every property is different—very different. In this segment, I hope to answer, that is, fill in the gaps, to the five steps every property owner or real estate agent should come to understand and then apply. There are five steps to sell property quickly and effectively. 
 
What is your five step plan to sell your property quickly?: (1)  Pricing your property correctly; (2) pre-qualifying the buyer; (3) Preparing for the sale; (4) make all repairs before listing; and (5) Creating creative sales strategy.
 
 
STEP 1:  Pricing Your Property Correctly
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While this may present itself to be a simple subject often introduced as to why properties do not sell, it is nonetheless one of the most important, if not the most important reason properties stay on the market for lengthy durations.  Most homeowners are out of touch with property prices and values in their own neighborhood.  Many investors seem to go more by the money they invested in the property, thus determining what there sales price will be, and many agents simply want the listing, so they listen to the seller and decide to go with a sellers ideas regarding price.  All three ways to determine a listing price are wrong and most of us know this.  Deciding to sell a property at a price that is too high is nothing more than an amateurish business decision that becomes a huge time waster and costs money to sellers, investors and agents. 
 
 
The question now remains:  How do you price a property correctly to sell quickly and get the highest price possible?  Here is the breakdown for you—and it’s easier than you think.  Rule number one is to not get stuck on a price.  The market will tell you what to list it for.
 
1)   Do not be a greed monger.  Flexibility allows contracts to close. 
2)   Get accurate comparables from the past two months. A CMA (Comparative Market Analysis) should be prepared by your agent.
3)   Comparables should be set for around the same style house or property with the same square footage.  A 1,000 square foot house can not compare to a 2,000 square foot house.  A 2 bedroom 1 bath cannot compare to a 3 bedroom, 1 bath.
4)   Focus on sales prices not list prices.
5)   Focus on properties within one to two miles of your area only.
6)   List your price 2% to 10% below all competing properties in your area
7)   Make a list of all competing houses in your area and have the list available to prospective buyers (this list will show all the advantages of your property, including the price advantage—make it hard for the buyer to say “no” to your property).
8)   Compare your property to others and then adjust your price up or down depending on the extras, the amenities your property offers.
9)   Get an appraisal, and then set the price 2% to 10% lower.  Show this appraisal to all buyers.
10) When you decide to lower the price, do not lower in small amounts.  Shock for interest—lower it 8% to 10% or more.  Show the world you are motivated to sell.
 
 
STEP 2:  Pre-Qualifying the Buyer
 
Do not waste time my signing a contract with a buyer who does not qualify to buy your property.  Does the buyer have a pre-approval letter from a lender?  In tough times and with new investors, it may be difficult for a buyer to obtain such a letter, or sometimes new homebuyers who do not have a buyers agent and has occurred to them.  If this is the case, get a copy of bank statement and other financial records to verify they have enough funds for a suitable down payment.  You will sometimes work with buyers who do not have agents.  You may have to work with them and even locate lenders for them.  But don’t sign a contract until they are qualified.
 
A few points to remember:
 
1)  A buyer who is not qualified is not a legitimate buyer until qualified.

2)  Refer lenders to buyers who do not have pre-approval letters.

3)  Get at 3% to 5% earnest money deposit from the buyer (a $10,000 deposit for a $200,000  house shows that the buyers are serious).

4)  Set a ten day inspection period and state in the contract the deposit is not refundable after the 10 day period under any circumstances.

5)  Talk to the lender to ensure the funds will be available on or before the closing date.
 
 
STEP 3:  Preparing for the Sale
 
To sell quickly you’ll have to prepare your property for sale.  This could take as little as a few days or several weeks depending on the size and contents of your property.  Rule number one is clean it up and clean it out.  Here’s the breakdown:

1)  Clutter is a big turnoff.  De-clutter your property inside and out. A house must feel rooming inside and expansive outside. Large furniture should be removed to open up living areas. Get a storage unit and move everything out. 

2)   Clean everything twice.  And I mean everything.  The interior should be spotless: walls, baseboards, counter-tops, mirrors, carpets, windows, doors, floors, sinks, knobs and inside and outside cabinets, ceiling fans, everything—got it.  The property has to be ready to be moved into and the buyers need to see that it is ready.
 
3)   The garage should be orderly. The garage should be emptied if possible and cleaned. Garage floor paint should be applied. You can also give it a clear coat and have it shine.  This is easy to do and the benefits are huge. The garage now looks like a custom job.
 
4)   The yards, front and back should be in green condition. Plants should be cutback, trimmed from the house.  Plants need to look healthy.  If they are dead, dieing or ugly—get rid of them.  Everything living or not should appear that it has been cared for.  Make it your goal to exhibit “Pride of Ownership.”  This is what buyers want; it’s what turns them on.
 
5)   Everything must be in good, if not great condition.
 
6)   When the time is right, and you’ve done all the clean-up, interview three real estate agents who specialize in your area. Ask each of them what they will do to sell the property quickly. Then hire the one who is going to hustle for you.

 
STEP 4:  Making all Repairs Before Listing

The overall condition of your property will in most cases determine your selling price and the speed to which it will sell.  Many times the reason why properties do not sell quickly is because there are repairs to be made and the seller simply does not want to deal with them.  No one, unless it is an investor will purchase property with needed repairs.  And when a professional investor buys it he will typically buy at wholesale prices.  So unless you are willing to sell at wholesale (25% to 50% discount) you better make the necessary repairs.
 
What are the necessary repairs, big and small?”

  1. Bad roofs do not sell houses—fix the roof.
  2. Faucets, toilets, cabinet doors, ill-fitting doors need to be repaired before listing.
  3. Air conditioning and heating units, water heater, and lighting fixtures need to work.
  4. Appliances should be replaced unless they are a few years old
  5. Broken wooden yard fences and block fences and gates should be repaired.  
  6. Blinds and curtains, and broken windows are necessary repairs.
  7. Light switches and electrical outlets must work properly.
  8. All plumbing must work properly.
 
Don’t hold your breath hoping the buyer will overlook something that does not work right.  Most items are brought to the buyer’s attention by a qualified inspector.  And when repairs are needed—the buyers offer price will always drop.  So, make all the repairs before you list the property.   
 
 
STEP 5:  Creating Creative Sales Strategy
 
The location of your property is a strong factor determining price and time on the market.  There isn’t much you can do here for improvement, but if you are in a very desirable location, make it known to buyers and make it known early.  Is it near the ocean, lakes, parks, excellent schools, shopping, etc.?  Is it in a transitional area with expanding city services and federal funding for major improvements?  Make this information available to buyers immediately.  Contracts are not submitted because buyers do not know enough about the property; that is, they do not know all the good things you know—so let them know. 
 
Creative selling means being open to many ideas; here are a few things you could try.
 
1)   First things first, get feedback from people who saw your property and were not interested.  Find out why they weren’t interested in submitting an offer.

2)   Let all your neighbors know you will be selling, and even before you list with an agent put together a flyer and distribute it to several blocks in your neighborhood.  Over 40% of sales come from people living in your neighborhood.

3)   Think of inexpensive ways to market your property with cards or flyers: church affiliations, public boards at supermarkets and large companies near you. 

4)   List your property on Craigslist.org and other message boards.

5)   Make special offers in the sale: a free car, boat, motor home, trips, etc.
 
The idea is to sell your property quickly.  This is your aim, your number one priority.  To do this, you will need to hustle.  And in a deflating market, you’ll have to take charge and move with lightening speed.  Realize that real estate markets change quickly.  Once robust markets are busted markets, and once busted markets are now robust.  This is the nature or cycle of business—the ups and downs of any commodity, supply and demand economics plain and simple. 
 
Follow this five step plan as noted and you’ll sell your properties when you need to.  Focus on the activity, the process, and the results will come.  The stronger your focus the faster the results.
 
M. Mitch Freeland, with his brother John, have flipped over 100 properties and have managed over 100 units and engaged landlords.  To learn more about house flipping, real estate investing or proactive, successful landlording, get a copy of The Millionaire Real Estate Landlords, The Millionaire Real Estate Flippers.
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​How to Overcome the 21 Deadly Sins of Real Estate Investing:  Part II
© 2016 by M. Mitch Freeland

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​In Part I we covered sins 1 to 10.  In Part II we cover sins 11 thru 21, and two bonus sins, 22 and 23. 
 
            11.  Poor Financial Management. The root of this can originate from undercapitalization or complete financial incompetency. Over-spending, under-budgeting, and overestimating cash flow are common occurrences and a recurring occurrence in real estate investing and particularly in fixing and flipping properties. The budget has to be set and proper estimates on fix-ups must be as close to accurate as possible.  Through experience, financial planning, and management of project funds positive growth can be realized.  But it is also true; some investors will never realize this and will find themselves on the sidelines every few years or so, or even permanently incapacitated during deflating economic times.
 
            12.  Poor Labor Management.  As in all successful businesses, management must be able to work well with, understand, and effectively manage labor.  If you cannot lead or get along with others, you will have a tough time making a success of yourself as a real estate investor or any other business requiring people.  It’s okay to have a turnover of 200% to 300% of the people you hire each year until you locate the right people for the job.  If your turnover is higher than this, you might be the problem. It’s time for a little self-assessment.
 
            13.  Carelessness and Recklessness.  Like a compulsive gambler, you may not be able to control yourself.  As with any business venture, clear thought and calculated risks are important.  But when you start to become reckless with your capital, or careless by not conducting the property due diligence, you are on the road to ruin.  You must operate a business like a business—with effective decision making and with consistent work ethics.
 
            14.  Lack of Discipline.  It takes discipline to create any meaningful degree of success and the lack of discipline will be the downfall of many investors.  It takes hard work to build a successful business.  Without discipline, you will never achieve much of anything, believe this fact. Learn to do all you can do everyday and become the person of discipline. There is no other way around to succeeding than a well disciplined work ethic.
 
            15.  Perfectionism.  Too many people believe a perfectionist attitude is necessary to achieve high results.  This is false.  A realistic attitude is needed.  Knowing what is necessary to get the job done is the vital difference in saving time and money in real estate investing. Try being a realist by offering value.  Perfectionism is a self-indulgent activity which serves only you, not your customer or buyer.
 
            16.  Self-Doubt and Indecision.  All successful investors have a high self-image of themselves; thereby, decision making is easy. Those with self-doubt are usually and regularly indecisive. You have to be a good decision maker to be a good investor for the long haul. The more decisions you make, the better you become at it.
 
            17.  Lack of Integrity.  Without integrity, an investor will always be scratching at the bottom.  In the long-run, only the investor with high integrity wins; and the others fade away into the abyss, never to be heard from again.
 
            18.  Over Analysis.  The smart investor studies the numbers and when they make sense, he makes an offer. Over analyzing properties potential will usually leave the investor behind the eight ball with no investments. A smart investor acts quickly with the information available.  Don’t “guesstimate” all the “what ifs,” they typically don’t happen as frequently as some would want you to believe.
 
            19.  Complete Lack of Fundamental Analysis.  Some people simply neglect the numbers; it’s true.  They like it, they buy it, they rehab it, they put it up for sale, and they sell it for a loss or a miniscule profit—not worth the time or effort.  They then complain that real estate investing is a tough business with tight margins and large risks.  They did very little work in crunching the numbers and working the figures. If you want to succeed in real estate investment, take the time and discipline yourself to work the numbers. Without the right profit margin you’ll be wasting your time with small profits or large losses.
 
            20.  Lack of Persistence and Follow-Through. The more persistent you are simply signifies the measure of your belief; that is, how strongly you believe in yourself and what you are doing.  If you are not persistent and you do not follow-through with your objectives then you will never accomplish very much in real estate investing or in life.  If you have little faith in your own ability to transform your world, then look for another agenda that excites you—that interests you and stop wasting your time and the time of others.
 
            21.  Inflexibility and Close-Mindedness.  You must be flexible and keep an open mind when investing.  Use your peripheral vision and look around you.  Learn to be open to new ideas, listen to other investors and be aware.  What are other successful investors doing?  Where are they buying and why?  Don’t blindly follow them, but study their motives.  Some ideas might be good ones.
 
            When buying or selling property, whether in a bad or good market, you must be flexible in price and possibly terms to close a transaction.  You can not afford to be close-minded and rigid.  More money has been lost when investors refuse to work with buyers and sellers.  Some of this has to do with stubbornness and pride rather than good sense.  Remember, to keep in action you need to be flexible—you need turnover.
 
Bonus Sins
 
            22.  False Beliefs or an Ill-Conceived Strategic Plan.  A positive attitude is great, but with an ill-conceived strategic plan and unrealistic beliefs, you will be on the road to ruin.  Before you invest in any property, first write down your plan of action.  A strategic plan starts with your goals—that is, it starts with your mission:  What do you plan to accomplish? 
 
            23.  Don’t over-hype yourself over any property.  It is an investment—a commodity to be bought and sold (for a meaningful profit).  Focus on a real profit margin of about 50 to 60 percent of after fix-up costs.  This should be your goal.  It is a realistic goal, and one that should be desired.  Set your plan in motion with clear and focused thinking.
 
           
Now that you know the sins of real estate investing, it’s best to avoid them.  Think about this list and read it over regularly; you might just end up doing the right things.  Becoming successful in real estate investing is easy once you’ve followed the rules.  Many of these rules are dictated by the natural laws of good, honest, business. Living right and abiding by the natural laws of the universe, Bible, and common sense.
 
If you are interested in learning about the lucrative world of landlording and rental property investing, get a copy of The Millionaire Real Estate Landlords.  There are many concepts in this book that are not covered in mainstream real estate books.

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​How to Overcome the 21 Deadly Sins of Real Estate Investing:  Part I
© 2016 by M. Mitch Freeland                      


​​When I first began writing about this topic, I tried to narrow it down to the top sevensins of real estate investing; similar to the seven mortal sins in the Bible; but the more I thought about it the harder it was to limit it to just seven. I thought of mistakes I’ve made and mistakes other investors have made that I’ve seen throughout the years. After serious thought, I had to increase the list. And so, here we have a list of twenty-one sins and two bonus sins, making it a total of twenty-three sins that real estate investors should stay clear of. Practicing any one of these sins can ruin your business and cause you more harm and stress than you’d think possible.  Many have caused some investors to give up altogether.
 
I cover the first ten sins in Part I:
 
            1.  Lust. We all know what this means—well, most of us do.  Don’t lust over any property. A property is a commodity in your trade, nothing more. When a property comes up for sale and it appears to be a fantastic buy, do not get caught up in a bidding frenzy. Look at it objectively. It is a commodity to be bought, fixed and sold. Don’t lust over it.  Don’t ever have the attitude, “you just have to have that one.”
 
            2.  Gluttony.  Don’t buy or invest in more property than you can handle. Even when great deals appear one after the other, you can’t buy them all.  Pick and choose the best of the best and the ones that make the most sense at the right time. Always think about your current and future cash flow and the manpower needed to produce the results you want on a speedy basis.  Don’t over invest.  Don’t become a glutton.  Keep on a steady pace.
 
            3.  Greed.  Greed is the forbearance of gluttony. Wanting more and more and more is not the right way to invest. Wanting an unrealistic price for your property usually leads you to long holding periods and a price below what you could have sold it for at an earlier time.  Every greedy investor I’ve known has always taken a bath—with dirty bath water.  Greed doesn’t pay. Greed in my book equals ignorance and laziness and unwillingness to come to terms with true value and market prices.
 
            4.  Sloth.  You’ve got to hustle; you’ve got to be a “go-getter.”  When you invest in real estate, you cannot be lazy.  Slothful living produces nothing but anxiety.  Slothful work habits produce poverty. The slothful perish silently.
 
            5.  Wrath (Anger).  I’ve seen many investors and landlords repeat mistake after mistake because they were unable or unwilling to curb their anger. Anger has a way of turning some people into imbeciles, buffoons.  Have you ever seen a grown man get angry—verbally, physically and look like a nut?  It’s okay to be discontented about a particular incident or situation, but drop the anger and think of a solution to overcome your current problem—or, overcome your challenges, or situations as some would say.  Curb your anger—it leads to unclear thought and rash decisions which typically results in wrong decisions.
 
            6.  Envy.  Every property is unique. Every investment or project is different. Do not envy the competition. Envy will lead you to do things that may not be right for your investment.  It’s okay to admire, but it is not okay to envy.  Envy is a destructive emotion that has no room in your investment life. Do your work and do it to the best of your ability and let others envy you—that is to say, let them envy your work habits and your creative genius.
 
            7.  Pride.  Taking pride in your work is good, but don’t over do it by becoming arrogant.  Never be too proud to do the really hard or menial tasks when called upon.  Not only will it very possibly save you some time and money, but is also proves to the world that you are a person of flexibility and that you are grounded, committed and believe in your project. 
 
            8.  Fear.  Fear in the single greatest emotion that holds people back from greatness. Fear has a way of crippling you into inaction. There is no room for fear in your life if you truly want to succeed in real estate investing. Many investors confuse fear with caution. Learn to distinguish the difference between the two. If you do your homework and study your market, there will be no room for fear in your investing life. Fear mostly puts a halt to your growth. Fear of action causes more failures and poor decision making than any other emotion encompassing the investing process.  Again, do your work, build your confidence and drop the fear and focus on moving in the right direction.  There is a saying that the fear of loss is a stronger emotion that the desire for gain.  Reverse this, and make the desire for gain a stronger emotion than that of fear and you will realize the success you deserve.
 
            9.  Impatience. We all have to be aggressive in planning and working towards the things we want, but it doesn’t mean we practice impatience.  Impatience moves us into areas we are not quite ready for—we haven’t done the right research, study or proper investigative work needed to ensure the right degree of profitability.
 
It takes time to succeed; it takes patience.  Do your best work every day and let the laws of nature, the law of cause and effect, take its course. When you become impatient you miss opportunities, you make rash, ill-thought decisions that almost never work in your favor in the long-run.  Many novice investors lose time and again because of their impatience.  Understand this and do not become impatient.
 
            10.  Over Leverage.  Leverage is great for building wealth and it can be part of a necessary plan for a real estate investor.  But over leverage can cause great stress over the long-term, and can lead many investors to their demise.  A flipper can absorb high leverage if the intent is very short-term—the property is fixed and put up for sale quickly and sold.  Over the long-term leverage will not work well if there is a lack of adequate cash flow.  Leverage over the long-term can only work if there is enough cash flow to support it; otherwise, you’re in trouble.
 
If you are interested in learning about the lucrative world of landlording and rental property investing, get a copy of High Engagement Landlording.  There are many concepts in this book that are not covered in mainstream real estate books. 

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​How Real Estate Investors and Agents Can Manage Themselves for Super Productivity
© 2016 by M. Mitch Freeland

​“If we manage it well, it will only take half as long as if we manage it badly.”—Winston Churchhill
 
You are your own boss?  Do you make the decisions, the correct decisions to advance yourself, to progress in ways others do not, or perhaps cannot?  Do you feel you’ve lost your independence?  Have you lost your discipline?.  Have you lost the ability to prioritize your hours, days, and weeks?  Are you are aware that you are the only one who has the ability within you to change—change your circumstances and thus change the outcome in everything you do?  Change is within your reach; it is within your physical and mental powers.
 
There is but one way investors and agents can manage themselves for super productivity and that is by prioritizing—and to prioritize you must exercise discipline.  Possibly the most important word in all management is discipline. Possibly the most important skill attained by super producers is discipline.  For without discipline nothing of greatness can be achieved.  Nothing worthwhile has ever been achieved without discipline.
 
When managing any number of people, work crews when doing rehabs, or managing buyers, sellers, and assistants for agents, you have to understand that the task of managing people depends first on self-management.  Separating number one, you, from number two, number three and number four is, no doubt, a requirement of organization. 
 
According to Winston Churchill:  “The duties and problems of all persons other than number one are quite different and in many ways more difficult.”  This is always the case when dealing with a group of people.
 
The discipline of prioritizing is all about managing yourself.  Once you are able to manage yourself consistently, then you will be in a position to manage others effectively.   Achieving “Super Production” begins with competent self-management.  Competent self-management begins when you learn to prioritize.  And you learn to prioritize effectively by disciplining yourself. 
 
Follow the eleven rules below and you’ll be on your way to “Super Production”:

1. Focus on what is centrally important at the time.

2. Learn the habit of sticking to it until it is completed. 

3.  Pay close attention to detail. 

4.  Concentrate on the major task and delegate the small ones. 

5.  Ensure clarity with workers, group members and subordinates—and keep communication lines open. 

6.  Be relentless in the completion of the task and do not settle for mediocre performance 

7.  Focus in on the big picture, the reason the tasks must be completed

8.  ​Become organized, regimented—discover a personal system and stick with it.  Example:  You may work bet-ter, more effectively in the evening.  You may work better at home rather than in the office.  Find your “way,” the way you work best and make the change. 

9.  Set a timetable for yourself and set is daily.  Write out your daily tasks.  Write out your top six tasks and prioritize there importance.  Do not do anything that is frivolous and that does not lead you in the direction toward super production.

10.  Information is critical.  Make it a priority to be fully informed of all aspects of the project.  Make it clear that    everyone in the organization understands the purpose of their position, duties and responsibilities.

11.  Prioritize your efforts on the three most important things for your organization and its growth. By prioritizing, number the most important things in order of their    importance.  Complete one task at a time and complete it with full engagement.

The first thing you should concentrate on is the value of producing excellence. Do not accept mediocre work from anyone. And this begins by not accepting mediocrity in any form.  Remember the adage, “You can do better”—then do it better.  You need to set standards and let your team know the standards to which they will be measured. It is not that uncommon to get dragged through the mud from time to time.  Life is tough—that’s the way it is.  But it can be much easier once you begin to get tough with yourself.  The secret to “Super Production” is managing yourself effectively by prioritizing your daily tasks and activities; and you do this one successful day at a time.

Whenever you become stagnant, depressed or lackluster in your production, the time is right to focus in on your major goal; concentrate on it and do not let it out of your site.  Put all your attention in to taking the step, small steps—one step at a time—step by step.  Once you’ve prioritized, your steps become more meaningful—and your steps are backed by discipline.

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​How to Make Your Real Estate Meetings Productive
© 2016 by M. Mitch Freeland


​While meetings come in all shapes and sizes, (one-on-one, small groups or large groups), the single greatest aspect of a meeting is to have its purpose defined upfront:  Why is there a meeting being held?  The leader heading up the meeting should certainly be able to describe the event as well as all member participants.
 
According to Peter Drucker, “The Man Who Invented Management” (Business Week), there are six kinds of meetings:
 
1.  A meeting to prepare a statement, an announcement or a press release.  A draft of the statement should be presented before the meeting.  And after the meeting a final draft should be disseminated. 

2.  A meeting to make an announcement, such as an organizational change.  Only the announcement and question regarding it should be discussed. 

3.  A meeting in which one member reports.  Only the report ought to be discussed. 

4.  A meeting in which several or all members report. Report should be discussed and clarified and questions about the subjects of the reports answered.  There should be a discussion set for each report and a specific time frame set—say 10 or 15 minutes per report. Discussions should include questions for clarification, along with the answers. 

5.  A meeting to inform the convening executive.  Executive should not make a presentation.  He should only ask and answer questions. 

6.  A meeting whose only function is to allow the participants to be in the executive’s presence.  There is usually no effective reason for this type of meeting other than being around an executive.  Perhaps it could be used as a motivating or inspiring measure. 
Having an effective meeting means knowing what kind of meeting you will be having.  Different meetings are prepared differently and require different results.  The leader of the meeting must remain focused on the reason for the meeting and stay with the same format. Also important is the realization of time and purpose—to end the meeting when the subject of the meeting has been satisfied or accomplished.  Good leaders don’t waste time; they recap the points and terminate the meeting.
 
Alfred Sloan, “The Most Effective Business Executive” according to Drucker, was in charge of General Motors from the 1920s to the 1950s.  Most of his time was spent in meetings.  His process of running a meeting effectively consisted of these fine points:
 
  1. At the beginning to the meeting, he announced the purpose of the meeting.
  2. He listened to all who spoke.  He did not take notes and spoke rarely.
  3. He only spoke to clarify issues or if something was confusing.
  4. At the conclusion of the meeting, he summed-up the points, thanked everyone and excused himself.

​After the meeting, he drafted a memo summarizing the meeting and its conclusions, if further study was necessary and any work to be done to.  He sent a deadline for the assignment, and named the individual who was to be responsible for the completion of the work. He then sent a copy of the memo to all participants at the meeting.
 
Meetings can either be productive, effective, and positive, or a complete waste of time, of resources and manpower.  “Effectiveness is a discipline.  And, like every discipline, effectiveness can be learned and must be earned.” (Peter Drucker)

© 2018 BY M. MITCH FREELAND
Landlording is one of the easiest ways to make money with real estate.  Your time commitment is small and the cash flow is well worth it when executed correctly.  Successful landlording is all about managing people, your tenants. 
​Landlording does not have to be difficult.  Isn't it time you gave it a try?