The Secret to Successful Real Estate Investing in Alaska
We've helped hundreds of people build wealth in real estate, ourselves included. Everyone wants to know “the secret” or wants some piece of inside information that will give them an edge over the competition and fast track them to success. To be honest, there is a secret which those who make millions in real estate have mastered. I’m going to explain the secret to successful real estate investing in Alaska and how you can put it to use immediately to build your real estate empire.
The success principals of real estate investing rely on one basic concept: LEVERAGE. Leverage is part of “The Secret”. If you think about it, nothing is built without leverage. The wheel, a hammer, even a pail of water, use leverage in various forms in order to convert one form of energy into another with a greater intended result. The deep understanding of leveraging money, time and people is what turns info junkies into millionaires. Leverage for your business is the difference between a slingshot and a cannon.
The “People Principle” is the most overlooked and most crucial form of leverage in real estate investing. If you do your own taxes, you are the tax professional. If you fix your own plumbing, you are a plumber. If you cut your own hair, you are a barber. As an investor, you need to ask yourself “Who is the best person to do this?” Your Success Team should be a group of advocates who invest in real estate themselves and do it well. DO NOT surround yourself and seek advice from those who are not actively investing in real estate or seeking to do so. Would you use a mechanic who doesn’t drive or own a car to fix your $500,000 custom Ferrari? Your real estate can easily exceed that in value and can get you a whole lot further in life. Many investors settle on getting advice from people who don’t do it, aren’t successful at it and offer only negative feedback instead of useful information. Yet it’s the naysayers that are the most verbal. That is partially because the wildly successful investors are on a beach somewhere, not filling your ears with garbage.
The “People Principle” is much more dynamic than most realize. Newton’s Third Law states “for every action there is an equal and opposite reaction”. As true as this is, when it comes to the human race, this is a massive understatement. When you set the right people in motion, there is no limit to what they can accomplish. This has been proved time and time again in history. Look at the skyline of New York, Chicago or the lights of Las Vegas. These cities grew over time driven by the dreams and passion of generations. When you build the right team who knows, shares and is motivated to achieve the same thing, the sky is not the limit. It is a stepping stone.
The models of a successful Real Estate Investing Team state that there are 5 key people. 5 key people who you rely upon for great information and assistance and who you in turn will support with referrals and business.
- An Investment Realtor: Not all Realtors hyper focus on investing. You need one who does. They know other investors through networking and sales, they know alternate lenders, real estate attorneys, eviction specialist, property managers, CPA’s and handymen. A great Realtor is your primary advocate.
- A Lender: You need one really good lender who understands the bond market, has connections and is not too proud to direct you toward the right place to get a loan. This lender will understand your plan and show you what product (loan) is best for you based on the terms of the loan in relation to your specific needs. The interest rate is NOT the best tool to use when measuring great financing for investing.
- A Property Manager: Property managers are great for more than managing your property, although that is their primary benefit. They can assist you with establishing current rental rates, identifying troubled areas and screening tenants.
- A CPA: Your certified public accountant should be an active real estate investor. They will help you make wise decisions when doing your taxes so that you can continue to purchase real estate while taking the right level of deductions. They can even help you amend your taxes to a lower rate once you’ve purchased a property.
- Real Estate Attorney: There are always legal questions that pop up. Worse case, you need to evict a bad tenant. Your Attorney will be able to answer very brief questions without charging you $200 for picking up the phone, but it is expected that for more involved assistance you will not be offended when they do bill you.
Outside of this circle are your handymen, contractors, carpet cleaners, painters, snow removal and lawn maintenance, plumbers and so on.
If you’re not sure where to find these people, you need to start by joining a local Real Estate Investing group. In Anchorage, Alaska, that group is REX (Real Estate Exchange). REX is a nonprofit organization founded by Kevin Cross, president of Kloud Realty Group of Keller Williams and Adam Heafner of First Rate Financial. Their purpose is to create a safe haven for like-minded individuals who proactively invest in real estate to network together.