Getting Started Guide To Real Estate Independence Blueprint What you need to know to get started investing in real estate TODAY. by Dr. Gary Giordano, DO and Maria Giordano, RN
Gary and I love the entrepreneurial path, but it is not without some fear. We know you are sitting back reading this with some anxiety. Let s face it, getting started in real estate and giving up that day job can be quite scary. You re thinking about making the big leap and that is why you are reading this. However, like an infant you need to crawl before you can walk and that s precisely what this blueprint is all about. In the beginning most real estate investors start out by trading hours for dollars. If you think about it, that is what you are currently doing at your day job. You are trading hours for dollars at the company or business you work for. There isn t anything wrong with working for someone else, other than the fact that they have control over your earnings. There is actually a great deal of comfort working for someone else. When you work for someone else you don t have to worry about the money not coming in. You get to collect a paycheck, however, when you stop working, the money stops coming in! If you were really going to be truthful with yourself, that is what s holding you back, isn t it? Your biggest fear may just be not having money or running out of money. Relax! We re not going to tell you to quit your day job until you are ready. When will you be ready? We help you answer that question. We help you get to your FREEDOM number. However, it isn t without some work on your part. We re not here to coddle you and tell you that you can invest in real estate while sitting at home in your underwear. In fact, real estate investing is quite the opposite. It s a boots on the ground strategy. However, with a proven system anyone can do it. Even our blind daughter Aria does real estate. So STOP making excuses! Quick Start Blueprint Step 1
Know Your Why Yogi Berra was quoted as saying, You ve got to be very careful if you don t know where you re going, because you might not get there. in order to become a successful real estate investor you must know and understand why you are doing this. Why do you want to become a real estate investor? Is it simply for the money or is it to have more time to spend with those you love and care about. More freedom to do what you want with who you want. The ability to provide for your family and their future. To know the money is there to send your kids to college or take the vacation of your dreams. To have the home you ve always dreamed of. To become an entrepreneur and no longer spend your days, nights or weekends working for someone else improving their bottom line. These are all great reasons, but you need to know your why. Now write your WHY down. If you don t know why you re doing it you won t succeed. Know your why and goal setting are the first two keys to being a success. Your goals tie back into your why. After your WHY you need to know what you want and how you re going to get there. You need to be realistic. Write your why down.
Step 2 What are your goals? It isn t good enough to just have a goal. Just like your why, goals must be written down too. Goals must be broken down or chunked down into smaller more digestible pieces. You need to know what your 30 day, 60 day, 6 month, 12 month, 3 year, and 5 year goals are. If profit is a goal, how much profit? How much profit do you need? How many deals do you
need to close to accomplish this goal? If you want [something], you have to prepare for it with a vengeance. Denise Morrison. The best way to make this business sustainable and to be a success is to decide on what your goals are. Your goal should be SMART, specific, measurable, achievable, realistic, and timely. Most investors objective is really one of two things. Most investors either want to create passive revenue streams such as your buy and hold or rental properties or cash flow streams. The other method is your quick cash or resell method. In either case you need to research your local market before you make investment decisions. You can certainly incorporate both methods into your real estate investing strategy. But you need to decide if your long term goal is going to be passive income (also called cash flow) or quick cash revenue streams. A cash flow strategy doesn t necessarily have to be done by a full time investor. This strategy can be accomplished part time since it requires a lot less hours and is generally a lot less labor intensive than a quick cash strategy such as fix and flip. A good example of a cash flow strategy is as follows: Acquire 1 property every 3 months or 4 per year for 10 years. Purchase price for properties in this example is $100,000 purchased with 20% equity Finance with hard money or traditional financing. Repair, rent and re-finance at 80/20. Using hard money for the purchase re-finance at 4.5% to 7%. Accelerate loan pay down by reinvesting monthly cash flow into extra payments. Figure 1% of value for monthly rents. Cash flow reinvestment per property of $150. Using a modest appreciation of 2% (typically I use 3% to 5%). After 10 years the investment would be worth in equity $2,368,983. Monthly positive cash flow of approximately $13,000. In the above example you can see that on the 11th year the first four properties would pay off and be owned free and clear. This is when the cash flow would begin to accelerate substantially. After 20 years the entire portfolio of 40 properties would be paid off. The investor s net worth in real estate holdings would be $5,445,85.51. The monthly cash flow would now be over $54,000 per month not including the tax advantages. If you do this in your self-directed IRA the tax advantages and income are even greater. An example of a quick cash strategy is as follows: The investor must go out and find a property at a discount Property must be at a price point which allows the investor to Buy the property
Make repairs Resell the property in the shortest amount of time possible. This type of investing style requires a lot more time and usually the investor will make this their full time occupation. There is a lot more risk associated with this type of strategy. The investor must purchase the property at the right price. If there isn t enough equity in the property when purchased or meat on the bone, this type of transaction is less likely to be a success. The other major obstacle most investors run into is funding. Since most traditional lenders will not deal in this type of a transaction the investor will need to get hard money or find a private money source. Once the property has been purchased it is essential to use a good licensed contractor and make sure everything stays on budget and on time. It isn t unusual to see investors, especially new investors, underestimate their repair budget. This can be due to inexperience, oversight or both. Once all the repairs are made the last hurdle is selling the home. Using a realtor to sell the finished property is usually the best decision. For those new to investing who don t have a lot of time or money you can wholesale properties for quick cash as well. This can be done with properties that need rehabbing, cash flow properties or properties being sold on terms. More on these types of deals in the Real Estate Profit System modules and membership site. It s important to remember that everyone gets knocked down. The difference is winners get back up, but achievers find a way to reach their goals. No matter what your strategy is, write down your short and long term goals now.
Step 3 Knowledge What areas of specialized knowledge do you have? Does your knowledge support your goals? What areas do you need to learn? You are doing what in business is called a SWOT analysis. What are your strengths, weaknesses, opportunities and threats. For example you want long term passive revenue, but instead you know fix and flip or rehabbing. You want quick cash, but are low on funds and want to wholesale properties, but you don t know wholesaling. In other words you must become a lifelong learner. You need to get out there and get the specialized training in the area you want to focus on. It s not good enough to be just good enough. You need to actively seek this education. Much of this education can be attained for free, but beware, you get what you pay for. We recommend all our students join their local real estate investment association (REIA). REIA s are a great source of information. REIA s usually bring in speakers both local and across the country to educate their members on where the market is, what the market predictions are, and different real estate investment strategies. Sure the speakers may be selling something, but the speaker has gone through enormous expense. Remember they have spent years learning their expertise. Some of what they teach has come from expensive trial and error too. We re not saying to buy it, but do go for the free training. You never know when you might hear that one thing that can make all the difference.
We also recommend having a mentor. We ve all had mentors in our life. Whether or not you ve called them a mentor might be different. A mentor is a coach. They keep you out of trouble and motivate you to keep improving and getting better. Seek a mentor who is doing at least twice what you want to be doing. We can all agree that a mentor is not going to be someone who either just got into real estate, finished their first deal or has been an investor for a year. A mentor needs to be someone who has years of knowledge and many, many deals under their belt. You need to be comfortable with that person and listen to their years of wisdom. Remember a mentor has specialized knowledge and can save you the 5-10 year learning curve to get you ahead faster. Don t be surprised if it is hard to find someone who will mentor you for free. You need to bring something to the party. Offer to bird dog for them or find wholesale deals that they have the first right of refusal on that meets their criteria. Don t forget it can take a lot of time away from an investor s business to mentor a newbie. Really good mentors or investors that are doing a lot of business will often charge a newbie for mentoring. If a mentor wants to charge you, find out what it is they will be teaching you and if there is any structure to their teachings. Write down your specialized knowledge and what you need to get further education on. Set a time frame or a plan together for getting that continuing education.
Step 4 Marketing Plan There is no real right or wrong way to create your real estate marketing plan. However, it is paramount for anyone seeking to become a real estate investor to have a marketing plan. Marketing is always situational and flexible in nature. Marketing is never static, but is always evolving. What works this year may not work next year, and what was once old maybe considered new again. Such is the case with direct mail marketing and door knocking. With any good marketing plan you must create a budget. Your budget will dictate what types of marketing you use. You also need to know how much time you have to spend and when. For instance, if you work weekends and work Friday s through Sunday s you may not be able to put up bandit signs Friday night or early Saturday morning and take them down Sunday evening. If you are really good with social media and creating websites you may want to incorporate online marketing. Make a target audience for each area you are targeting. Drill it down to demographics, lifestyle, and other characteristics. This will help you empathize and relate to the person you want to reach. Pick at least five different marketing strategies. Here are just a few strategies to think about: 1. Bandit Signs 2. Website (SEO) 3. Social Media Facebook, Linkedin, Snapchat...etc. 4. Probate Letters 5. Driving For Dollars 6. MLS - Realtors - old and expired listings
7. Divorce list 8. Eviction notice list 9. Call on For Rent signs 10. Craigslist Ads 11. Direct Mail Marketing with special offer or download 12. Postcards 13. Marketing to out of state owners 14. Marketing absentee owners 15. Door Knocking 16. Print Ads 17. Create Flyers 18. Networking 19. Realtors and Title Agents 20. Service Route People These are just a very small sampling of the many ways to find sellers. One of our favorite and inexpensive ways to find motivated sellers, and a great way to get to know your real estate market, is by farming an area. This is very simple and easy to do. You simply drive a series of small neighborhoods in your target area or market and look for homes that show signs of distress. We also call this driving for dollars. Driving for dollars is so simple. All you do is look for unkempt lawns or weeds in the granite/rock, boarded up windows, missing roof shingles, piles of newspapers in the driveway or front door stoop, etc Then write down the address, find the owner, contact them and make an offer. The best part is there is virtually no competition on these properties, you become an expert in an area and it s at very little cost to you. Handwritten letters are more time consuming than other types of direct mail marketing. The costs are relatively low, you are just paying for paper, envelop and stamps. If you are using a list you develop from driving for dollars then you don t even have the fee of paying for a mailing list. This strategy has the highest open rate and conversion rate for us. The reason these letters do so well is because they have a more unique look and don t look like junk mail. We use yellow lined paper and either a blue ink or red ink pen. Your message needs to be short and simple. In order to get a better return on investment (ROI) you must commit to sending out these letters multiple times and consistently. We have examples of three different yellow letters on our membership site and in our system. Bandit signs are simple, easy to do and at relatively low cost. The main drawback is they take time to setup and takedown. Bandit signs are signs posted at the corners of busy intersections. They basically say We Buy Houses, Cash, As-Is with a call to action and phone number. You will want to check with your local ordinances on whether or not bandit signs are illegal. Some cities will charge you a fine per sign if it is against their ordinances so check first.
Flyers are another good tools to have. They can be easily left at restaurants, grocery stores, churches, bus stops, on people s doors or car windshield. These flyers have the same message as a bandit sign. You must use large quantities of these flyers in order for them to work. Like bandit signs it takes time to put them out and they generally have a much lower conversion rate. We recommend this if you are starting out and are on a limited budget but have plenty of time. Spending a couple hours per day using this strategy is a good way to generate leads. Door hangers are very similar to flyers. You hang these on people s doors with your message and a call to action. You can hang these on distressed properties or you can create door hanger to find potential buyers. Use them at apartment complexes if you are looking for tenants to do a rent to own. Like flyers this is also a less expensive way to market but requires a larger time commitment. Postcards are probably the most inexpensive form of direct mail marketing. We ve found they also have the lowest conversion rate. When using postcards you need to do a bit of testing to make sure you have the right message but also that you are using them with the correct list. Don t use postcards when marketing to probate. Like anything else, if you put enough of these out and you are consistent with your marketing you will have success. Social media we like to refer to as the electronic version of networking. You want to leverage technology and become a real estate beast. When you re promoting yourself on social media like Facebook, LinkedIn, Twitter it s important to make sure your posts provide value to the reader. These posts are not just about promoting yourself. If your are looking to engage home sellers then provide tips on how to sell your home or how to stage your home to sell, how to sell your home without a realtor, etc You need to make sure your brand is consistent across all forms of social media as well as your website. You are branding yourself as the expert. Once you brand yourself as the expert and have a consistent message then people will naturally gravitate towards you. Video marketing is really important to use especially since facebook is projected to have more than 80% of their posts video. You may not be aware of it, but video is becoming the media of choice. More people would rather watch a video than read text. Be the first to use this underutilized format. It s free, which is our favorite way to market and doesn t take much time to do. Video is great for posting to your social media or on your website. Great videos to shoot are videos giving tips to sellers or of a property you are selling. Upload and promote your video through your YouTube channel as well as other social media sites. We recommend that you used Google+ as well for SEO purposes. Since YouTube is owned by Google your video posts and regular posts will rank higher on search engines. We discuss this in more detail on our membership site. Websites are another great way for to promote your business and attract sellers. The main purpose of your website is lead capture. Your website needs to be informative and chocked full of tips and answer questions potential sellers may have. You need to showcase your
expertise as well as have testimonials. Having a giveaway or a free download is also a great way to capture emails and make contact with potential sellers through an autoresponder sequence. Creating your real estate marketing plan can take a little time, money, and effort on your part. You need to know who is your ideal target? Be very specific. You need to understand your options and time commitment as well as have a budget before getting started. This will enable you to choose the methods that are best suited for you and produce the best results in the least amount of time. Remember, marketing is also about testing different methods as well as being consistent. Write down the three to five areas you want to concentrate on marketing, your budget, and time commitment for each area.
Step 5 Getting Started Now for the fun part. Time to put it all together and take action. By this point you know what your why is. You ve set your short term and long term goals, and you ve created an online presence. Now you need to create a daily schedule and start prospecting. Create your seller marketing material if you haven t already done that. This should have been done in step 4 when you picked the three to five ways you are going to start marketing for sellers. Create your call scripts like the ones we have in our system and on our membership site. Find someone to role play these scripts with. You need to join at least three groups for networking. Write down three organizations you either belong to or can join this week. You should have joined your local REIA and found a mentor or accountability partner. Your mentor or accountability partner is someone who is committed to giving you moral support and encouragement. Someone that you can commit to reporting to for at least the next 30 days. Your mentor will be the person who holds you accountable for your efforts, what you have been prospecting to and how. They will keep you focused and on task. They can help you role play when calling prospects and help you figure out if you have a deal or not. You ve have decided on how many property owners you will be marketing to each week and how many properties you are going to go out and see. In the beginning it is always best
to see as many properties as possible. Practice makes permanent and this is how you hone your skills for talking to sellers, structuring deals, and estimating repairs. You are now totally committed to your success and 100% accountable for it. Now get out there and get some deals! Goal: To make an extra $50,000 in revenue by end of year. Week 1 Week 2 Week 3 Week 4 Week 5 Branding Goal: The brand called you. Know your why and set your goals. Start to develop your brand. What is your company name. Join a local REIA group and at least 2 other network marketing groups. Decide on a logo for your business and create business cards. Hand out 3 business cards each day. Create print leave behinds to hand out. Hand out minimum of 3 per day looking for houses. Create a freebie (can be a market update pamphlet, how to sell your house) purpose is to create value and become a deal magnet. Time Goal: Block off that time Spend a minimum of 7 to 10 hours setting up your business. Work on real estate 1 to 2 hours per night during the week. Drive with a purpose.begin returning seller call. Make at least 5 calls per day. Begin looking at properties. Look at new neighborhoods and write down distressed houses. Call at least 5 for rents - make offers Look at outsourcing tasks to virtual assistant. Be a life long learner. Social Media Goal: Daily Facebook, Twitter, Pinterest postings. Establish business Facebook account and any other social media. Start to post - spend 15 min on FB creating posts and one other social media account. Create content calendar. Use periscope of facebook live to show what you are doing. Join specific investor facebook groups. Guest post on other blogs. Website Goal: Capture x# leads per month Research domain names and web hosts. Make sure it is consistent. Start to develop your website. Use free wordpress tutorials. Spend 15 to 30 min blogging. (This drives traffic to your website). Create video marketing to post on website. Have website call to action with form to fill out. Us branding freebie. Direct Mail Goal: Send out 500 mailers per month Decide what your target market is for direct mail marketing. Write your market specific copy. Focus on being in the people helping business. What can you offer. Does your mail piece of a clear call to action. Test mail a minimum of 24 letters. Send a minimum of 50 targeted letters if using a list or 25 yellow letters minimum. Experiment with color, envelopes, shapes. Make sure the seller has a reason to open.
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