10000 Summary REISkills.Academy FAQs

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Real Estate Investing FAQs

1. What are the biggest challenges for new real estate investors?

One of the biggest challenges is marketing and finding motivated sellers who are willing to sell at a price that allows you to make a profit. Another challenge is knowing what to say to sellers to negotiate favorable terms, especially when you're not just offering cash.

2. Why is having private lender money important?

Having access to private lender money is crucial because it allows you to seize opportunities quickly. You might need funds for unexpected repairs, down payments, or to secure a deal before another investor does.

3. What are joint venture partners and when should I seek them out?

Joint venture partners are individuals or entities that invest in a real estate deal alongside you. They typically provide the capital while you handle the legwork like finding the property, managing renovations, and selling it. You should only approach potential joint venture partners after you have a proven track record of successful deals (around 5-10 completed projects).

4. What are the advantages of seller financing and lease options?

Seller financing and lease options are strategies that can provide long-term cash flow and minimize capital gains tax. They involve structuring the sale in a way that allows the buyer to make payments over time, potentially avoiding a large lump-sum payment.

5. How can I determine my financial goals as a real estate investor?

A helpful way to set financial goals is to work backward from your income needs. Look at your previous year's gross income and aim to match or exceed that amount through your real estate investments. Remember that owning a business allows for various deductible expenses, which can impact your overall profitability.

6. What common mistakes do new investors make?

A frequent mistake is jumping into marketing before being fully prepared. New investors may not know how to effectively communicate with sellers, which forms to use, or how to assemble a reliable team of legal, tax, and title professionals.

7. What is the value of coaching and mentoring in real estate investing?

Coaching and mentoring provide invaluable guidance and support, especially for those new to the industry. Having an experienced mentor can help you build confidence, avoid costly mistakes, and learn the ropes through hands-on experience.

8. How can I gain credibility with sellers and buyers when I'm just starting out?

If you're new to real estate investing, you can leverage the experience of your mentor to build credibility. When asked about your experience, you can honestly state that you are working with a senior partner who has extensive experience in the field. This demonstrates that you have access to expert guidance and support, even if you are still learning.

Briefing Document: 

REISkills.Academy - Learn Real Estate Investing from a REI Mentor

Excerpts from "Learn Real Estate Investing from a REI Mentor – Learn how to Buy with no credit, Sell fast for cash or high cash flow, and get Private Money for your Deals!" from REISkills.Academy

Overview:

This briefing document summarizes the core themes and important ideas presented on the REISkills.Academy website, which positions itself as a platform for learning real estate investing through mentorship. 

The main focus appears to be on practical strategies for new and aspiring investors, emphasizing non-traditional buying methods like purchase options, securing private funding, and focusing on long-term cash flow through seller financing and lease options. 

The platform also highlights the importance of mentorship, building a team, understanding legal and financial aspects, and avoiding common pitfalls.

Main Themes and Important Ideas:

1. Identifying Motivated Sellers as the Primary Initial Challenge:

The website immediately identifies finding motivated sellers as the "biggest challenge in getting started in real estate investing."

The mentor distinguishes their approach from simply liking "pretty houses," suggesting a focus on deals with potential for profit, often through non-conventional methods.

2. Emphasis on Purchase Option Investing:

While acknowledging wholesaling, the core strategy promoted seems to be "purchase option investing," which involves working with "pretty houses" using purchase option agreements. This suggests a strategy that doesn't necessarily require immediate full purchase and offers flexibility.

3. Negotiating Terms Deals and Not Just Cash:

The platform stresses the importance of negotiating "cash or terms" with sellers. This indicates a focus on creative financing solutions that might appeal to motivated sellers even without an immediate full cash offer.

The website points to resources on "the basics of negotiating with a motivated home seller" and the importance of the language used.

4. The Crucial Role of Private Lender Money:

Securing private funding is presented as "very important" and proactive. Investors are advised not to wait until they need funds but to "line it up so that you can go out and take advantage of certain situations."

Examples are given where quick access to $5,000 might be needed for property cleanup or a down payment.

The academy teaches how to find private lenders, negotiate win-win contracts (including utilizing self-directed IRAs), and potentially partner with "Silent Partner[s]" through joint ventures for larger projects.

5. Joint Ventures for Larger Projects:

Joint ventures are presented as a way to fund larger projects where a "Silent Partner will fund the deal," covering all cash and renovation costs.

The investor finds and manages the project, returns the capital, and then splits the profits.

The platform advises against pursuing joint ventures without a "good track record, meaning 5 to 10 deals already finished."

6. Focus on Long-Term Cash Flow and Tax Advantages:

The preferred disposition strategy leans towards "long-term cash flow."

The website advises against quick reselling due to higher capital gains taxes, suggesting holding properties for "a year and a day" for lower tax rates.

"Seller financing and lease with option" are highlighted as key strategies for achieving long-term cash flow.

7. Working Backwards from Financial Goals:

The platform encourages investors to determine their income needs by looking at past tax returns and then building their real estate business to meet or exceed that.

The importance of "understanding business deductions" for tax benefits is emphasized.

8. Addressing Challenges for New Investors:

The website acknowledges that many new investors have "never had a business before" and may lack understanding of liability, taxes, and starting an LLC.

They emphasize guiding new investors to "start an LLC right away" and track expenses diligently.

9. Avoiding Key Mistakes for Beginners:

A "big mistake" for beginners is identified as "doing marketing right away" without the necessary foundational knowledge and support.

This includes not knowing "what to say to the seller," "what forms to use," and lacking a "team of title and legal and tax behind them."

10. The Value of 1-on-1 Professional Coaching and Mentorship:

The REISkills Academy offers "1 on 1 professional coaching" to "handhold you through a few deals" to build understanding and confidence.

The concept of an "apprentice period" with an experienced mentor is highlighted as crucial for success.

A strategy for building confidence when talking to sellers early on is suggested: “I have a senior partner that has had over 35 years experience, and I’m fairly new but I’m learning every day.” This leverages the mentor's experience.

11. Learn by Doing and the Importance of Effort:

The academy offers "lessons on how to do deals" and various aspects of real estate investing, including marketing, negotiation, contracts, and business promotion.

However, the platform clearly states: "But you have to do the work!"

12. Website Resources and Contact Information:

The website offers "Free Resources for Real Estate Investors," a "Glossary A – Z," and a "Book Appointment" option for further engagement.

There are also FAQs covering various topics, providing further insight into the platform's teachings.

Key Quotes:

"The biggest challenge is marketing for Motivated sellers, trying to find a motivated seller that you can make money with."

"It’s very important to have some private lender money when you need it. You can’t wait until you need it. You need to line it up so that you can go out and take advantage of certain situations."

"We do not want you approaching people for joint venture deals until you have a good track record, meaning 5 to 10 deals already finished."

"Disposition or selling properties we tend to want long-term cash flow."

"For that reason we sell a lot on seller financing and lease with option."

"The nice thing about owning your business is you can write off of a lot of expenses. Understanding business deductions is important."

"There’s a big mistake that a lot of beginning Real Estate Investors do and that’s they do marketing right away and they don’t know what to say to the seller and they don’t know what forms to use and they don’t have a team of title and legal and tax behind them."

"What we do here at the REISkills Academy is we handhold you through a few deals and then after that you understand that particular deal and you can do a lot of that on your own in the future."

"“I have a senior partner that has had over 35 years experience, and I’m fairly new but I’m learning every day. “"

"But you have to do the work!"

Conclusion:

REISkills.Academy,  offers a mentorship-focused approach to real estate investing, particularly appealing to beginners. 

It emphasizes finding motivated sellers, utilizing purchase options and creative financing (terms deals), securing private funding, and aiming for long-term cash flow through strategies like seller financing. 

The platform stresses the importance of avoiding common beginner mistakes by acquiring foundational knowledge, building a supportive team, and learning through guided practical experience. 

The mentor's personal story and the availability of coaching aim to instill confidence and provide practical guidance for aspiring real estate investors.

Real Estate Investing Study Guide: REISkills.Academy

I. Short Answer Questions

Instructions: Answer the following questions in 2-3 sentences each.

What is identified as the biggest challenge for new real estate investors, and what specific type of investing does REISkills.Academy focus on?

Why is having access to private lender money crucial in real estate investing, and what are some situations where it might be needed?

Explain the concept of a joint venture partnership in real estate, including the typical roles and responsibilities of each partner.

Why does REISkills.Academy advise against seeking joint venture partners early in your investing career?

Explain why holding a property for "a year and a day" is a recommended strategy in terms of taxes.

What two seller financing methods does REISkills.Academy frequently utilize to achieve long-term cash flow?

How does REISkills.Academy suggest new investors determine their financial goals in real estate?

What are three key areas of business knowledge that REISkills.Academy emphasizes for individuals who are new to running their own business?

Describe the “big mistake” many beginner real estate investors make.

How does REISkills.Academy's coaching and mentoring approach address the challenges faced by new investors, particularly in terms of gaining experience and confidence?

II. Short Answer Key

Answer: The biggest challenge is marketing to find motivated sellers. REISkills.Academy focuses on purchase option investing, often dealing with properties in good condition and desirable locations.

Answer: Private lender money provides quick access to funds for unexpected costs like renovations or down payments, allowing investors to seize opportunities. It's important to have these relationships established before the money is needed.

Answer: In a joint venture, one partner (often the experienced investor) finds the deal and manages the renovation, while the other partner (the silent partner) provides the capital. Profits are typically split, with the exact ratio depending on the deal.

Answer: REISkills.Academy recommends having a track record of 5-10 completed deals before seeking joint ventures to demonstrate experience and success to potential partners.

Answer: Holding a property for "a year and a day" qualifies the profit as long-term capital gains, which are taxed at a lower rate than short-term gains.

Answer: The academy often utilizes seller financing and lease with option agreements to sell properties, generating long-term cash flow for the investor.

Answer: They suggest new investors review their previous year's gross income from their current job or primary income source to determine the amount of income they need to replace or exceed through real estate.

Answer: The academy stresses the importance of understanding liability protection (like forming an LLC), proper expense tracking, and small business tax implications.

Answer: The mistake is starting marketing efforts before having the necessary knowledge, including effective communication with sellers, appropriate forms and legal documents, and a reliable team of professionals (title company, legal counsel, tax advisor).

Answer: The program provides hands-on guidance through several initial deals, building confidence and practical experience. Mentorship allows new investors to leverage the experience of a senior partner when interacting with clients, enhancing their credibility.

III. Essay Questions

Instructions: Prepare thoughtful essays addressing the following prompts.

Analyze the advantages and disadvantages of focusing on purchase option investing, as advocated by REISkills.Academy, compared to other real estate investment strategies like wholesaling or traditional buy-and-hold.

Discuss the importance of having a strong team of professionals (title company, attorney, tax advisor, etc.) in real estate investing. Explain the specific roles each professional plays and how they contribute to successful transactions.

Evaluate the ethical considerations involved in working with motivated sellers, particularly those facing financial distress. How can investors ensure they are acting ethically and responsibly while pursuing profitable deals?

Explain the benefits and drawbacks of using seller financing and lease options as exit strategies compared to selling properties outright for cash. Consider factors such as taxes, cash flow, and risk.

Compare and contrast the roles and responsibilities of an active investor in a joint venture partnership with those of a silent partner. What are the potential advantages and disadvantages of each role, and what factors might influence an investor's choice of which role to pursue?

IV. Glossary of Key Terms

Motivated Seller: A homeowner who needs to sell their property quickly due to circumstances like financial distress, divorce, job relocation, or inheritance.

Wholesaling: A short-term investment strategy where an investor gets a property under contract and then assigns the contract to another buyer, profiting from the difference in price.

Purchase Option Investing: A strategy where an investor secures the right (but not the obligation) to purchase a property at a predetermined price within a specific timeframe.

Private Lender: An individual or company that lends money for real estate investments, often at higher interest rates than banks but with more flexible terms.

Joint Venture Partner: A partnership between two or more parties who pool their resources and expertise to undertake a real estate project, sharing profits and losses.

Silent Partner: A joint venture partner who provides capital for a project but does not actively participate in its management.

Disposition: The process of selling or otherwise disposing of a real estate asset.

Seller Financing: A financing arrangement where the seller of a property provides a loan to the buyer, often with more flexible terms than a traditional mortgage.

Lease with Option: A lease agreement that gives the tenant the right to purchase the property at a predetermined price within a certain period.

Capital Gains: The profit realized from the sale of a capital asset, such as real estate. Long-term capital gains (from assets held over a year) are taxed at a lower rate than short-term gains.

LLC (Limited Liability Company): A business structure that provides personal liability protection for the owners, separating their personal assets from business debts and lawsuits.

1 on 1 Coaching/Mentoring: Personalized guidance and support from an experienced real estate investor, helping new investors learn the ropes and navigate the industry.