Three Strange Real Estate Investing Techniques That Work!

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Becoming a real estate investor is the dream of many Americans. Whether you have been watching the Home and Garden shows that make investing in real estate look sexy, or simply know it is the best way to create a passive portfolio, you got hooked!

Becoming a Wealthy Real Estate Investor is Many Americans’ Dream!

I have had some success, and some failure over the years in real estate investing. I only knew a few ways to make money in real estate. Since I don’t want you to do the same thing I did, here are…

Three  Strange (Yet Highly Profitable) Ways to Invest In Real Estate Without Ever Seeing a Property!

You know that having another stream of income (or several) is the best way to build wealth, but you just don’t know how to get started…

Until now!

Most people fail at real estate straight out of the gate because they drink the Kool-Aid and think it is simply another easy way to riches.

buying property

I did.

In fact, in 2003 I bought my first property, but it wasn’t until 2007 that I thought I could make it a career…

Bad timing to say the least!

I lost my shirt, and had to start from scratch, so I figured I ought to learn how to invest in real estate in a way that wouldn’t cost me everything.

 

That’s when I discovered these three powerful investment strategies that most “gurus” aren’t talking about, which is why I want to share them with you today!

These strategies have been used by countless millions of people throughout history…

People like J.P. Morgan, Warren Buffet, and even the Beverly Hillbillies!

So what makes these strategies so appealing?

Simple…you don’t even need to see the property to get started!

This means no painful sales process for you…

Older Man Sitting on Beach

No hammer and nails…

No contractor licenses…

No ongoing maintenance…

No tenants….

No midnight wake-up calls for repairs…

Virtually no ongoing involvement at all!

Of course this is because we are shifting away from you investing all of your time, and instead using a resource that is much more readily available…

And renewable!

Your Cash!

Time to think of real estate investing like you would any other investment…

You INVEST your money, not your time, blood, sweat, and tears like so many others laying in the real estate investor graves right now.

You simply find a reputable person to put your money with, and then start using these strategies as an alternative investment vehicle.

This way you can diversify your portfolio even further, and maybe, just maybe, hedge your losses and amplify your gains even better!

So, what are these strategies?

Let’s see, shall we…

growth1. Bank on the Land!

This strategy, actually called “Land Banking” is a way for a person to buy property that has yet to be developed. This goes to Will Rogers’ saying, “Buy land…they aren’t making anymore of it!”

It might seem strange to discuss just buying property outright with nothing on it that will make money, especially when I just said you don’t need a thorough understanding of the whole buying and profiting aspect of real estate!

However, Land Banking refers to a way for a group of investors to buy a very large amount of land in what is considered the “Path of Progress.”

Simply put, you are banking on the fact that the city, town, or rural area will eventually start or continue developing in a certain direction, and investors simply buy the land well ahead of this progression.

The beauty of land banking is that there is really no ongoing expense other than property taxes, which are generally very low since there is nothing on the property.

Then, as developers come in and start building apartments, housing complexes, strip malls, industrial and commercial buildings, etc., you will be poised to profit.

In many cases, the land gets sold to a developer who sees the potential as well, but only once he/she knows the land can be developed for a profit.

At this point you sell the property for a nice profit and simply let someone else do the heavy lifting.

As an example, say you purchased 5% of a 100 Acre property for $25k five years ago.

Today a developer comes in and wants to purchase all 100 Acres for $2 Million.

Since the total purchase price was originally $500k ($25k x 20 Investors at 5% each), the investment just gave a 400% return in 5 years, or 80% per year!

Of course many opportunities might take longer than this to develop or not return such a high rate, but you get the point.

2. The Land Beneath the Land

Another interesting strategy is to own the land and everything else under the surface of the property.

Yes, believe it or not this is a thing.

Most people aren’t aware that there are valuable resources underneath their land that many companies are willing to pay for.

In fact, several oil and gas drilling companies don’t actually own the physical property where they drill. The instead purchased the land’s…

MINERAL RIGHTS!

This simply means the owner of the mineral rights gets to extract whatever is under the surface (usually crude oil or natural gas), and will pay the land owner for the privilege of doing so.

However, a cool strategy for you would be to purchase the mineral rights in an area where drillers already found lucrative minerals or resources, and then sell the rights to a drilling company on a royalty basis.

It isn’t uncommon for mineral rights investors to earn 18% per year for several years, even decades, without ever needing to do any of the work!

This is exactly how the Beverly Hillbillies got their fortune! Of course you won’t have to shoot a bullet in the ground to make money doing this!

3. Be the Banker!

Of these three strategies, this is the least bizarre way to profit in real estate, but quite possibly the most lucrative.

When the average person thinks about buying any type of real estate, the first place they turn for financing is a bank, right?

What if you could become that bank for someone else?

You would be able to get a good return on your money and help someone else out in the process!

In fact, the PRIVATE LENDING world has grown dramatically since 2008.

One study shows that the market is already at $5.5 Billion (yes, with a ‘B’), and growing (84% year over year growth compared to 2% for traditional/commercial lending growth).

With the JOBS Act of 2012 and Crowdfunding coming into play, this market could rise to $1 Trillion in the next few decades!

As a private lender, you simply replace the bank, and use your money to fund a purchase and possibly repairs on a property.

The easiest way to do this is to find a qualified mortgage broker and let them know you have money to lend, and let them do the rest.

In fact, many private lenders will make 8-12% per year on their money, and the mortgage broker will make the “points” on the loan for creating the relationship.

This way everyone wins!

Of course you could lend directly to an individual if you want, in which case you’d need a Promissory Note completed, and all the necessary documents just like a bank.

If you decide to go this route, always use an attorney or escrow agent to make the transaction.

This way you will be protected, your money will be secured properly with a mortgage, and the borrower will have very clear guidelines on how to pay you back.

 

So there you have it! Three Strange ways to invest in real estate without ever seeing, touching, or working on a property!

And here you thought you had to open an account at Home Depot and start perfecting your hammer swing!

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The Future of Retirement

The Future of Retirement is Here! Are You Ready?

On September 15th, 2008, the world of finance changed. If you are reading this right now, you likely remember everything that has happened since then, but you may not understand the significance of that date.

On that fateful day in September 2008, Lehman Brothers, one of the nation’s oldest and most respected investment banks, FAILED! The bank had to close its doors, sell off its assets, and declared bankruptcy. Thousands lost their job, and the landscape of Wall Street and finances changed forever.

Worse yet, however, was that the US Economy shrank significantly, and the world collectively lost $12.8 Trillion! That is the equivalent of the United States shuttering its doors, and no one receiving a paycheck until October this year!

Further, the way Americans starting thinking about their future shifted dramatically. A peer of mine, Ross, was gearing up for retirement at that time, and was normally a jovial individual, simply happy to be alive.

In October 2008, he had a different demeanor altogether. It turned out that he had just received his 401k statement in the mail the day prior, and the news was anything but pleasant. His portfolio had taken a 40% decline in the course of two months, and his employee stock had fallen by over 90% as well!

To say he was depressed was an understatement. His years of sobriety nearly went up in flames as we talked that day. I have never seen someone’s mood shift so drastically in such a short period of time.

It was almost like seeing a close friend the day after their spouse passed away. It was utterly depressing, and all I could do was feel sorry for him.

It turned out that Ross had to extend his working years by seven additional years! He was prepared to retire in 2009, and to this day he is still working, trying to recoup those massive losses!

Unfortunately, Ross isn’t alone. According to the Bureau of Labor Statistics (BLS), the largest working population right now is comprised of Baby Boomers, the people who should be gearing up for retirement, if they aren’t already retired! This of course has major downstream effects on our economy and work force, but that is a story for another day!

This is indicative of an even greater problem: our Retirement System is Broken!

According to other studies:

•    80% of workers 30-54 will not have enough money to retire…ever! (Source: Statistic Brain Research Institute)
•    63% of retired individuals are completely reliant on the government, friends, family, or charity to support their quality of life! (Statistic Brain Research Institute)
•    1/3 of all Americans have no money saved for retirement…at all! (Federal Reserve)
•    By 2037, the Social Security system will be bankrupt! (Social Security Trustee Report)

Given these statistics, is it any wonder why so many people fear (and completely avoid) the thought of retirement? Retirement planning has become one of those “taboo” phrases one ought not to mention in public!

I’m here to tell you there is a different and better way to plan for your future. My book, The Ultimate Guide to Self Directed Investing & Retirement Planning outlines a new way of thinking about retirement…one that isn’t reliant on anyone other than you to prepare for your future!

The premise is simple: Don’t plan on getting a single red cent from anyone else the day you plan to stop working! If you ask yourself that question, how does it change the conversation in your mind?

The first comment most people make when I suggest that idea is, “Well that’s why I have  a financial planner, and I have a good one!”

Well today, in 2015, most people have this false belief that their financial planner is good. Most people also held that belief in 1996 and again in 2007. Unfortunately, we seem to have a very limited capacity for recalling what our thoughts and beliefs were prior to a cataclysmic event such as the Great Recession!

I want you to question your assumptions about what you know, and recall where you learned these ideas. Did you learn how to plan for your retirement from your “financial planner”? If so, what bias do you think he or she might have had in educating you?

Instead, just assume the market is going to drop by at least 30% again (or more) in the next few years. Did your financial planner get you out of the market before it dropped last time? What chances do you stand of getting out before the fall next time?

I want you to start asking yourself, “How can I prepare for my retirement knowing that neither I nor my financial planner can predict the markets?”

If you begin with that question in mind, the conversation starts taking on a new dimension, and opens doors to unlimited possibilities!