Should You Do Real Estate Full-Time?

Many self-acclaimed real estate gurus state that everyone should quit their jobs and immediately jump into full time real estate investing. They often claim incredible results from students with little experience. We would like to caution that life-changing decisions are not usually simple and that full time investing is not for everyone. Let’s discuss some pros and cons of full-time versus part-time investing.The Full-Time InvestorEntering into the real estate profession on a full-time basis offers several advantages over a part-time commitment. Being successful requires you to develop knowledge in many aspects of real estate, and more time focused on real estate leads to greater knowledge. The more your learn, the more you earn, since you do not need to rely on as many professional services or partners for help. You also learn to recognize a deal (or a dud) faster, which gives you more time to do more business or spend with your family.As a full-time investor, you work your own hours. When we say “full-time,” that may mean as little as twenty hours per week if you are good at finding deals. The rest of your time can be spent pursuing other vocations or hobbies. Or, if you are so inspired, you can work forty or more hours and use the extra cash flow to buy rental properties or diversify your holdings in the stock market. The point is that you need to satisfy your cash flow needs before you can start “investing” your money.One final point you should consider is whether you want to be “self-employed.” If you have always worked for someone else, being your own boss sounds very attractive. In some, respects, this isn’t quite the truth. Being your own boss means being an accountant, bookkeeper, stock clerk, receptionist and office manager all-in-one. You have to do deal with tax returns, payroll, office supplies, customer service, bills and all the other hassles that come with a business. You don’t have friends to chat with at the water cooler. You don’t have paid health insurance, a company car and a 401(k). You take your problems home with you every night. Sound like fun? It is, once you learn how to master your time and run your business. Being the master of your own life and career is well worth the other hassles of dealing with your own business.The Part-Time InvestorThe part-time investor holds a “regular job.” This may be by choice or for the time being until his real estate ventures are bringing in enough cash to quit his job. If it is the latter reason, don’t quit your job because the real estate “guru” told you so. Quit your job when it is not worth the income that it brings you. In other words, if you are making more money per hour flipping properties on the side, you are at the point that where your regular job is costing you money. Only then, is it time to quit!One of the advantages of starting out part-time is that you can maintain cash flow while learning the business. It may take weeks or possibly months to find your first deal. That same deal may take several months to turn around, especially if you decide to fix it and sell it retail. Think twice before telling your boss you’re leaving; you will have plenty of time to make the career switch once you have real estate experience. You may, on the other hand, like your occupation. If so, continue to work at it, and invest in real estate on the side.The best case scenario, if you are married, is to have one spouse work a regular job. The other spouse work the real estate business for creating wealth, retirement income and a nice college fund for the children. Of course, in today’s market, you could be laid off due to unforeseen circumstances. If you earn additional income flipping houses and invest the proceeds into rental properties, you will be covered if your main income is lost. This is especially the case for married women that often forego a career and raise a family, only to find themselves divorced with no means of making a living. We don’t want to sound cynical about marriage, but with a fifty-percent divorce rate in America, it never hurts to have a system for making money.Someone with a full time job tends to have little free time to focus on real estate. A part-timer should learn most of the same skills as a full timer. Thus, the key disadvantage to flipping properties on a part-time basis is that it takes sacrifice to learn the business. Something has to give; television, lazy weekends, meaningless hobbies and even some family activities must be compromised. As with any education, time spent learning about real estate will bring its own rewards, especially if the people in your life understand your goals and your plan to achieve those goals. If you are married, make sure your spouse reads this material with you and participates in the fun process of making money.Treat Real Estate as a BusinessPeople are lured to real estate because of the quick buck that it promises. Don’t hold your breath, you won’t get rich quick. An “overnight sensation” usually takes about five years. More than ninety percent of the people who take a real estate seminar quit after three months. Real estate investing should be treated with the seriousness of a career. It takes months, even years for a business to cultivate customers and have a life of its own. You need to treat it like any other business.

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Real Estate Businesses and the Internet – How the Balance Between Realtors and Buyers is Affected

Technology has changed many aspects of the way people now buy homes, usually by allowing them to access and process large amount of information about homes for sale. Only by monitoring these changes and aligning their business plans accordingly can real estate agents become and remain successful.In order to efficiently help home buyers, real estate agents need to understand how their clients’ concerns and expectations have changed. How long do home buyers now look at information? How do they process the information they looked at? How long does it take them to make a decision?Although technology is changing consumers’ behavior, it hasn’t revolutionized it. No matter how useful mortgage calculators or real estate search engines are, real estate agents still play a decisive role in the closings of home transactions. For example, according to the NAR, 77 percent of home buyers used the Internet to search for a home in 2005. Of these people, 81 percent still used a real estate agent to purchase their home. By comparison, only 63 percent of people who didn’t search on the Internet ended up using the services of a real estate agent to purchase their home. It seems, however, that people searching for a home on the Internet also take longer to make a decision – sometimes up to 6 months, according to Realty Times.These two examples show that technology has changed what is known in the marketing field as consumer involvement. More specifically, by empowering home buyers with information, the Internet has radically changed the information search process. Thanks to Zillow and the like, home buyers can now access data such as square footage, construction year, type of heating, and other data that was only available to real estate professionals before. The home buyers’ eagerness for information can be an opportunity or a threat to real estate agents, depending on how well they adapt to changes.The majority of agents understand the importance of having an online presence, hence the increasing number of real estate agents’ Web sites. However, many of them do not know how to use the Web to generate valuable leads. For example, Realty Times reported that home buyers’ main complaint about Realtors online is that they don’t respond to e-mail inquiries fast enough. Unless they learn how to benefit from the Web tools at their disposition, agents will continue to loose many potential customers.Using new technologies – the Internet in this case – can be tricky sometimes. However, real estate agents do not have to be Web-savvy to use the Internet as an efficient way to market themselves among home buyers. A lot of marketing companies offer targeted Web tools that generate leads for the agents. These companies stay in charge of all the technical aspects, so that agents can concentrate on what they do best.The Internet is an instrument for change in real estate, and agents should know it is now essential for them to have an online presence. The key is to choose among the many online services agents could provide on their Web site and determine the ones that will truly bring success.