Emerging Real Estate Markets: How to Find and Profit from Up-and-Coming Areas

Acknowledgments xi

Chapter 1

Real Estate Emerging Markets: Your Ticket to Great Wealth 1

Investing with the Four Phases of the Real Estate Market Cycle 2

What Most Real Estate Investing Books Leave Out, or Don’t Know 3

Avoiding Real Estate Losses When the Market Turns Down 4

Discover the Path of Progress, and Get Wealthy 4

Could a Great Emerging Market Be Right under Your Feet? 5

Why Most People Can’t Recognize An Emerging Market in Their Own Backyard 5

How I Discovered the Power of Emerging Markets 6

How to Predict the Hottest Future Growth Areas 8

How Similar Are Real Estate and Stock Market Investing? 8

Chapter 2

How to Identify Emerging Markets Using My “Market Phase” Method 11

How to Invest in Each Phase of the Market 11

What You Need to Know about the Buyer’s Market Phase I 12

The Tremendous Importance of Job Growth 14

How to Invest in a Buyer’s Market Phase I 15

What You Need to Know about the Buyer’s Market Phase II 16

How to Invest in a Buyer’s Market Phase II 18

What You Need to Know about the Seller’s Market Phase I 19

How to Invest in a Seller’s Market Phase I 21

What You Need to Know about the Seller’s Market Phase II 22

How to Invest in a Seller’s Market Phase II 24

More on Emerging Markets 25

Characteristics of the BEST Emerging Markets 26

Chapter 3

Goldmines and Landmines in Emerging Markets 29

The High Cost of Bad Advice 29

Local Investments Can Be Highly Profitable 30

Insights I Gained from the Boston Market 31

Earning Positive Cash Flow 31

Buying below Replacement Cost 32

Knowing When to Move to Another Market 32

The Importance of Courage 33

How to Manage Out-of-Area Properties 34

The Incredible Wealth-Building Power of 1031 Exchanges 35

The Compounding Factor 37

Following the Rules to Enjoy the Benefits of a 1031 Exchange 37

Emerging Markets Are NOT the Same as Hot Markets 39

Why Both Employers and Employees Prefer Emerging Markets 39

Why It Takes Less Money to Get Started in Emerging Markets 40

The Hardest Part of Investing in Emerging Markets 42

Chapter 4

Getting Your First Deal in an Emerging Market 44

Secrets of Great Wealth Creation 46

Where You Should Start 46

The Supreme Importance of Time Management 48

How to Save Time and Money When Investing in Emerging Markets 48

Secrets of Successful Direct Mail Campaigns 50

Working Successfully with Agents 52

More Details on Working with Agents 53

Finding Great Investment Properties on the Internet 54

How Research Can Help You Dominate an Emerging Market 56

How to Find a High-Quality Management Company 58

The All-Important Path of Progress 58

How to Determine Where and When to Buy 59

How to Find the Money You Will Need 60

Chapter 5

How to Jump-Start YourWealth through Single-Family Investments 63

Step-by-Step to Your First Payday 64

Get the Leads Flowing In 64

Where to Find Out-of-Town Owners 65

What the Letters Should Say 66

Screening the Deals 67

How to Answer the Calls 68

Making Offers 70

How to Approach the Seller with Your Offer 72

Tie Up the Property 73

Find Buyers 73

Assign the Contract and Collect Your Money 74

Chapter 6

Multi-Family Investing: YOU Can Make Millions, My Hands-Off Way 76

Cash Flow Is King 77

Positive Cash Flow in Action 78

Economies of Scale 79

Start Investing Part Time 79

Who Pays for the Property Manager? 80

How to Get Lower Risk and Larger Returns 81

TwoWays to Explode YourWealth with Multi-Family Properties 82

Finding the Best Use of Your Profits 82

How to Do Fewer Deals and Make More Money 84

How to Close More Deals with Creative Financing 84

Multi-Family Properties Have One Other Major Advantage 85

Chapter 7

How to Find Diamonds in the Rough 88

The Wealth-Building Power of Value Plays 88

How to Find—and Profit from—Burned-Out Landlords 89

A Secret Hunting Ground for Finding Burned-Out Landlords 91

Variation on a Theme: The Landlord Who Has Just Had Enough 92

A Case Study in How to Deal Successfully with a Burned-Out Landlord 93

How to Avoid Management Nightmares 95

Red Flags in Dealing with a Property Management Company 96

How to Acquire 100 Units with Your First Deal 101

Properties that Need Repair: Polishing Those Diamonds 103

A Repositioning Success Story 104

Solving the Problem of High Vacancy . . . Once and for All! 106

More on High-Vacancy Properties 107

How the Profit Multiplier Works 108

How to Get a Steady Pay Raise 109

The Art of the Rent Increase 110

The Economic Power of Forced Appreciation 111

Chapter 8

The 10 Biggest Mistakes Investors Make in Emerging Markets, and How to Avoid Them 113

Mistake # 1: Thinking Any Investment Is a Good Investment 114

Mistake # 2: Investing Where There’s No Real Employment Base 115

Mistake # 3: Being Too Late to the Party 116

Mistake # 4: Neglecting to Go into Every Unit 117

Mistake # 5: Getting Mired in Pollution Problems 118

Mistake # 6: Over-Paying for a Property 120

Mistake # 7: Tying up All Your Money in Only One Market 121

Mistake # 8: Ignoring Overbuilding 122

Mistake # 9: Selling Too Late 123

Mistake # 10: Paying Too Much in Taxes 124

Chapter 9

How to Find All the Money You Need to Do Your Deals 126

Four Myths that Will Keep You Poor (if You Believe Them!) 126

Five Reasons You’ll Be on Easy Street When You Have All

the Money You Need for Investing 129

The Miracle of Leverage 131

The Four-Step System for Financing All Your Deals 132

Chapter 10

How to “X-Ray” Your Deals the Fast and Easy Way, So You’re Buying Right in ANY Market 146

A Properties: The Cream of the Crop 146

B Properties: Still High End 147

C Properties: Gold that Looks like Lead 147

Here’s Where You Can Make a Fortune 147

D Properties: Everything Else 148

How to Grade Areas as A, B, C, or D 149

Six Easy Pieces: The Six Calculations You Can Make in Minutes to Rate Any Property 151

How to Put it All Together, to X-Ray a Deal! 160

Chapter 11

How to Make $10,000 or More per Hour—(I’m Not Kidding) 162

The Wrong Way to Do Due Diligence 163

The Right Way to Do Due Diligence 163

The Due Diligence Process—and How to Master It 165

Looking at Property Income 166

Looking at Property Expenses 167

What to Look For, in the Pile of Stuff You’ll Get 167

The Checklist: Your Best Friend 168

Finding Hidden Value 169

Finding Hidden Gold in Expenses 170

Using Others as Your Eyes and Ears 171

Chapter 12

How to Inspect Both the Property, and the Investment 173

The Property Inspection 173

The Investment Inspection 174

How Great Amenities Attract Tenants 176

Deferred Maintenance 178

What Kind of Tenants Live There? 179

Make Friends with the People Who Will Make You Rich! 180

Hazards You Must Avoid 183

Chapter 13

How to Recruit Your Dream Team 187

Remember: You’re the CEO 187

Who’s in Your Dream Team 188

1. Brokers: Finding Ones Who Will Really Work for You! 188

2. Your Assistant: Not an Expense, but a Profit Multiplier 190

3. Bankers: How to Borrow as Much Money as You Want! 192

4. Attorneys: When and How to Use Them 192

5. Demographers: How They Can Pinpoint Emerging Markets! 193

6. Property Inspectors: How to See the Invisible 195

7. Contractors: How to Get Great Work at Low Prices 197

8. Managers: Your Long-Distance Eyes and Ears 198

9. Accountant: Finding One Who Can Save You Serious Money 200

10. 1031 Specialist: Get One, and Defer Your Taxes as Long as You Want! 201

11. Mentors: A Pat on the Head, a Kick in the Pants 202

Chapter 14

How to Scout, Buy, and Profit from Properties—Long Distance 205

Don’t Make These Nine Mistakes 205

Chapter 15

Know Your Exit Strategy, before You Get into a Property 210

Flipping Properties 210

Buy and Hold: Is this Strategy Right for You? 213

Another Buy-and-Hold Benefit 214

1031 Exchanges: How to Master Them 215

Profit by the Rules 216

Chapter 16

Your Next Steps to a Fortune in Real Estate 218

Approach # 1 218

Approach # 2 219

The “My Situation Is Different” Syndrome (and the Biggest Secret of this Book) 219

How to Speed Up Your Progress in Becoming a Real Estate Millionaire 220

A Free and Fantastic Way to Benefit from Distance Learning 221

The Best Books and CDs 221

The Power of LIVE Instruction from an Emerging Markets Expert 222

How to Have an Emerging Markets Expert Hold a Seminar in Your City 223

The Importance of Taking Action Now 223

Index 224