She had kind of a rough start with spelling at the beginning of the years. She was getting B’s and C’s at first. I decided that I need to do work with her to help her to develop the skill of spelling. What I did was work five days a week with her a little bit each day.

At first it was a real struggle to get her to practice with me. But after awhile, she got used to it. We even invented a game based on the TV show “Minute to Win It” to help make the practice more fun. After that rough start, she got straight A’s, week in and week out.

The last week of school was very busy with activities outside of school. In fact, we only got a few chances to practice spelling. The day of test she was stressed out because she felt like she wasn’t well enough prepared for the test. I told her to relax – that she would do just fine. Sure enough, she got an A.

The reason that you got so stressed out is that she now has the identity someone he has a good speller, and someone who is an A student. She she was very uncomfortable with the idea of getting less than than an A.

Why am I telling you this story? It contains one of the most powerful success principals. It’s the same thing with any other area in your life.

For example, when you are successful in finding great deals, you begin to believe that you are great at finding great deals. This helps you find more and more deals as your belief in yourself grows. As you find more and more great deals, your identity shifts from unsure to certain that you can always find great deals.

You begin to expect success all the time, every single time. This is your new standard of excellence. You become uncomfortable when fall below that level of success which is your new standard.

I notice this in myself. I’ll get onto a hot streak, and seem to find great deals all over the place. I’ve also been a cold streak, and wonder when I’m ever going to find my next deal.

When I feel that I’m not living up to my personal standards as a real estate investor, I go into action mode. I’ll put myself onto an action-based program. I’ll keep moving until I’m back to my comfortable level of production.

My mistake is that I slack off once I reach that level of production.

Want to create more for your business? Change your identity for yourself. Set a new standard. As Tony Robbins taught me years ago…”Step up!”

That’s how people become more and more successful in real estate investing.

In this article, I’m going to share how a newbie can get a money partner to finance your deals.

The real question becomes how do you convince that person who has the money and the credit to become your partner. When I was starting in real estate, I partnered up with with a CPA who became a money partner for us. Prior to our introduction to this guy, we had already done several deals. We could show him that we had real experience under our belts.

We put together a presentation with our success complete with what we paid for our properties, what we had to fix them up, and what the cash flow looked like.

It’s not essential that you know the individual personally. In fact, I was introduced to that person by a mutual friend who put us together for a fee. Was the fee worth it? Absolutely.

I don’t think we would have been able to put that partnership together if we hadn’t had experience under our belts already.

You can use this approach if you already have that type of experience. All you need to do is put together a presentation like I did that shows people you know what you talking about.

If you don’t have that experience, does that rule out this approach? Absolutely not. You can still put together a deal like this.

It’s definitely not going to be a little tougher sale, but it’s not an impossible sale. I’ve seen my clients put together this type of deal and make money doing so.

What you have to do put together a good presentation. It will need to show the types of the properties that you would be Buying. You will need to put down specific information like purchase price. What you plan to do to rehab the property. You will need to show what the cash flow will be. Get tons of specific details worked out before your meeting. For example, have your contractors already lined up and ready to go.

The one thing that’s different is that if you don’t have a track record it’s going to be a lot easier to approach someone who is family or a close friend who really wants to see you succeed.

If you go in with this type of information and a lot of certainty that you can pull this off – YOU CAN. You’ll have a good chance of convincing your potential money partner to actually become your 5050 Partner.

One clue that the feds are serious about this is the recently suit filed against Goldman Sachs. Goldman Sachs is the largest of the investment banks. The are trying to fan public anger against the banks in a time when Goldman just announced that it is shelling out $5 billion to its top executives.

To get a better context on what’s really going here, let me give you a little background.

The banks have always had lots of money. With money comes political power. A powerful, out-of control banking sector led to the great depression.

After the great depression, the federal government had enough leverage to put laws in place that greatly limited the amount of risks that banks could take. For example, it took banks out of the investment and securities business. The result of these regulations was a relatively stable financial market from the 1930’s through the 1970’s evidenced by very few bank failures during that period.

Starting in the 1970’s, their was a trend toward deregulating the banking sector. Arguments were made by banking sector advocates that laws put in place after the great depression were now “out of date” with the new technology.

The banking crisis of the late 1980’s, which resulted in huge numbers of bank failures, was a direct result of the deregulation of banks.

Even though we faced period problems like the S&L bailout in the 1980’s, congressman and senators who were heavily backed by the banking sector quietly put laws in place that gave banks the ability to grow much larger. For example, some of those changes included the following:

1. Removing restrictions on interstate banking,
2. Allowing commercial banks to get into the investment banking business, and
3. Prohibited the Federal government from regulating most derivatives.

There is a long list of other changes that could also be added.

In addition, these banks were adding all sorts of creative new investment products beyond making loan. One example was the mortgage loans which were bundled together and sold as securities. The banks wrote the loans, but were not on the hook if the borrowers failed to pay back the loans.

These financial products were complicated enough to make assessment of the risk very difficult for the consumers of these investment products to understand. Investors continued to pump massive amounts of cash into the market into investments that were much riskier than they understood them to be.

The net effect of these activities was to create a massive bubble in the housing market fueled by these investment products and the companies that created and sold them.

As you will recall, the fall out from the financial crisis was a loss of some 8 million jobs in the US. The Federal Government created the $700 million TARP fund to bail out big banks.

Oh yes. And many ordinary people like you and me will remember it best are those who lost a large portion of their retirement nest egg.

I will admit I had nothing riding on the stock market at the time, so I had no direct losses through investments.

So what does it all mean for the ordinary real estate investor?

First, there are incredible purchase opportunities right now. If you are like me, you’ve been buying up foreclosed homes that were once part of those bundled mortgage securities products. Those who have the cash and/or credit to buy bank owned properties have made some excellent buys in the last couple of years. Those deals are still coming in, and will continue to do so.

Even though “the economy” shows some signs of improving, you will continue to see great purchase opportunities that resulted from the economic crisis for next few years.

Second, these are anything but normal market conditions. Don’t expect the great purchase opportunities we’re seeing right now to last forever.

The federal government is going to pass new banking legislation. Their lobbyists supporters in the congress and the senate will be fighting “real” reform tooth and nail, but the financial sector is not going to be like the wild west when this thing is over and done with.

It’s likely that the federal government is going to be successful in putting the brakes on the risky tactics of the largest banks that created the current financial crisis. I think it’s going to be a very long time before risky banking practices create conditions for another housing bubble and collapse. Recall that after the great depression, reforms put in place created a very stable financial system for decades.

So what are we left with? Great purchase opportunities now. Movement toward slow and steady growth in the future.

Decades of slow, steady growth would favor a strategy of buy what you can while the buying is good…and hold onto it. I’m putting my money where my mouth is, because that is my strategy right now and for the coming years.

The great one had some excellent advice for anyone who was striving to achieve more. I’ve included two of those in this article below.

1. Focus on the Fundamentals
The great one once said, “The highest compliment that you can pay me is to say that I work hard every day, that I never dog it.” He was an absolute master with the puck, and one of the things that made him so great was his focus on the fundamental of the game.

Real estate investing is not so much different from the game of hockey. The great ones focus in on the fundamentals of their game, and never get away from those fundamentals.

I’ve noticed that when I get away from the basic things that make you money in real estate investing, my bottom line suffers because of it. The basis of real estate investing is having a deal to work with. One of the most basic principles in real estate investing is that you make your money when you buy properties. You get paid when you sell the property.

That makes the offers you make very important. When I get away from doing marketing to generate leads so that I can make offers, I don’t make money. It’s that simple.

Lately, I’ve had a lot of the cash I typically roll from deal to the next tied up in rehabs and properties ready to be fixed. In the past, I would have just stopped making offers until I had my projects finished up, but they up and down is not healthy for my business.

2. Make Offers Especially When the Timing is Bad
The great one also once said, “You miss 100% of the shots you never take.” True, so true. I’ve learned to discipline myself to go out and make offers regardless of my cash situation.

It’s actually a healthy habit to develop because the lower my cash reserves are at the moment, the harder I push sellers to give me very favorable financing terms. In fact, I’m doing a purchase on a 6-unit property right now in which includes:

1. Most of the financing from a zero-interest loan I’m getting from the seller,
2. Taking over a loan subject to the seller’s existing financing, and
3. Taking out another loan to pay for repairs and a small down payment to the seller.

I think you call that a hat trick.

But the problem they were facing is that they were being outbid by local real estate investors. Interestingly, NPR was referring to them as “vulture investors”. They seemed to take issue with real estate investors buying the properties to renovate and resell for a profit.

So help me understand this. NPR has a problem with investors going in and buying properties that the banks clearly want to sell – and fixing them up? What would they prefer – these properties sit vacant until they rot away to the foundation?

It occurs to me that many of these properties are likely so run down that no one other than a real estate investors who specializes in rehab will buy the property. Also, owner occupants get all sorts of bidding advantages on, for example, foreclosed FHA homes. They usually get 2 weeks or so to bid on properties until the bidding opens for investors.

Oh, and let me mention that as the reporter covering the story pointed out, the family did end up find a house for the good price they were looking to get.

It just makes you wonder if some do-gooder in Washington isn’t dreaming up some type of special government program to punish “vulture” investors for trying to make a profit. Perhaps a 100% tax on profits which could be redistributed to some housing subsidy program. Don’t thinks it out of the question…stranger things have come out of Washington lately.

I recently recommitted myself to my exercise program. For me, that consists of a short “wake up” set of exercises in the morning.

I also commit to jogging at least 4 times each week at a bare minimum.

I had been cruising along well with this program earlier in the year, but them I hit a patch that broke up that routine. After a few weeks off, my routine wasn’t quite a routine anymore. Now I’m back trying to pick up the pieces again…

I’m back to trying to get back to the habit of physical exercise. But I’m fighting a little voice the whole way. I’ll lay there in bed, and that little voice is urging me to stay in bed – to get just 10 more minutes of sleep rather than do my exercise routine.

I have to fight that little voice telling me “I don’t have enough time to get the jogging in today”. To do it later. But deep down, I know if I don’t get it done right then and there, it’s not going to get done.

What it’s taken is what Chet Holmes calls “pigheaded discipline and determination” in his book “The Ultimate Sales Machine”. It’s taken pigheaded discipline and determination to ignore that part of my mind that is fighting me all the way. That little voice that keeps trying to derail my progress.

What has made the most difference to me is just getting started. If I can’t get started, I can finish. I’ll get get dressed and started on my run. What I tell the little voice is that I’ll just get started, and I can decide whether or not to go my usual distance or cut it short. Once I get started, I’ll almost always go the distance. The trick is to get myself started.

I’ve been trying to apply that same pigheaded discipline and determination to my real estate business goals. I’m not talking about old hat…I’m talking about new projects and initiatives. It takes lots of energy and commitment to start something new in business, whether that’s a new avenue in marketing, or some new project. It requires consistent focus and determination over time.

What’s happened with me in the past when I’ve tried to get new projects off the ground is that most times I’ve failed miserably. Many times, I’d set something as a priority, but never actually done anything. Or, something I’d do something for a few weeks (or less), but then stop. Just give up and never look back.

But according to Chet’s philosophy of pigheaded discipline and determination, this is where your pigheaded determination needs to kick in. Pigheaded discipline and determination is all about taking action in spite of what the little voice is saying.

Your pigheaded discipline and determination needs to help you get moving, get started, regardless of what your little voice is judging the plan or your actions.

It needs to help you ignore that little voice that’s telling you things aren’t working out, so you may as well just give up. It needs to keep you going when things get tough.

Just like what I discovered from my exercise routine, the secret is to just get started with the first step so you begin to develop some momentum. Once you’ve gotten started, it will be easier to keep yourself going. The other secret is to remain committed and consistent in your efforts. It may take you weeks or months before you start getting the results that you are expecting. But if you keep after it, it’s going to happen for you.

During that same period, they pointed to a “solid but unimpressive annualized return of 8.6%” for residential real estate. The return calculated for real estate was based upon sort of a national average for appreciation in home values during that period.

There conclusion was therefore that in the long run, the stock market easily “crushes” real estate. The article also points to a study by Robert Shiller that suggests the “real” return of real estate is really somewhere close to 3%, barely better than the rate of inflation.

The problems with this article? The article is fatally flawed for the following reasons:

1) These two types of investments are so different that drawing a direct comparison is absurd. Think about a typical stock market investment. You buy x number of shares at $y. You hold them for some period of time in which the price per share goes up (hopefully for you). At some point, you decide to sell the shares.

Most buy and hold real estate investors leverage their money when they buy the real estate instead of paying cash and never putting financing on the property. At this point, the two start to diverge. However, these properties also produce income. The two investments diverge even further.

An investor who buys multiple income properties is building a business. It is much easier to draw a comparison between a buy and hold real estate business and, for example, a service business like a plumbing company or a franchise like a Subway. Perhaps the biggest difference is that real estate has an intrinsic value apart from the business. On the other hand, service businesses have much of their value in the intangible asset of its book of business / client list.

A stock market investment is much more comparable to, for example, art, precious metals, gems, or collectibles purchased with the anticipation that they will increase in value with time.

2) The S&P/Case-Shiller U.S. Home Price index on which the “unimpressive” rate of return for real estate was calculated (8.6%) is based upon home prices. The cash flow and tax benefits from real estate are completely overlooked by this oversimplification. Shame on the author for making this misrepresentation of the numbers. Because residential real estate creates passive income where stock do not, the analysis presented in this article is not valid.

3) For the average investor who does not have the time or inclination to invest in real estate, an investment in an indexed mutual fund based on the S&P 500 may be as good a move as any. That is, if they are able to really discipline themselves to hold onto these mutual funds for the long term.

The biggest advantage a guy who decides to start investing in rental residential real estate has over the guy who buys and holds mutual funds is control. The decisions that the real estate investor makes on a day to day basis determine his financial success. He will be able to do very well regardless if real estate prices are going up, down, or sideways.