Discover the power of leverage in real estate for 2019
The power of leverage in real estate is one of the most powerful concepts a creative real estate investor can deploy. This is one of the key concepts that allowed me to break free of the rat race and create true freedom. I'm about to teach you the power of leverage in real estate, so you too can live the life that you truly deserve.
The power of leverage in real estate. I want you to keep repeating that to yourself. When I say leverage, what do I mean? Well, let's first start by defining what is leverage. Now, the word leverage, it has a couple of different meanings. First, it's the creation of power through the use of a pivot point and a lever. Just think about a crow bar. You can use a crowbar to move heavy objects because the rigid bar -- it pivots about one point and moves an object to a second point by applying force to a third point. You get what I'm saying?
Now, the creation of this force gives you super human strengths so you can do things that you typically couldn't do. As real estate investors, we use this type of leverage all the time through implementation of tools, software and automation.
For example, I have this software. It's called the Deal Automator. The software is amazing. It's basically my CEO dashboard. It creates my website for me. I literally click a button. I have websites. All the videos are done. The email copies are done. The words on the page are done. The graphics are done. Everything's just done for you with the click of a button. It helps me research and analyze properties, runs my marketing campaigns, makes offers, automates the follow-up through email, text, ring-less voicemail and organizes my daily task list. It gets my team members on the same page, estimates my rehabs and helps me stay paperless by storing all my files in my cloud.
Deal Automator is awesome. It basically allows me to run my entire real estate investing business from anywhere in the world that has a WiFi signal. By leveraging a system like Deal Automator in my business, I can stay competitive, make decisions based off of timely data, and I can move quickly.
Without it, I'd still be doing things the old school way. I would still be using paper file folders, waiting on real estate agents to help me run comps, write offers by hand, trying to get multiple websites and all these different things to plug-in together. This adds up. Costly programmers, graphic designers, websites and technology -- it's stressful.
I would get my butt kicked by my competition because I wouldn't be able to get to the good deals fast enough. So, in this example, leverage through a software and automation tool like the Deal Automator is my solution. It helps me give me back my time, get good deals fast enough, and all because of automation and systematization.
The second type of leverage is the power to influence people, events and decisions in order to gain a desired result. We only have so much time in a day, 24-hours, 1,440 minutes, 86,400 seconds. The reason so many people get stuck in the rat race is because they're stuck trading their time for money. They work for years and clawing their way up the corporate ladder. They may get some raises, make a little more money, but if they ever stopped working for their income, everything immediately stops. Plus, they have to sleep at some point, eat and have some free time with friends and family. During the times they're not working, guess what? They're not earning.
How do you break free from this middle class prison? Through leveraging other people's time and resources. In business, you have to understand something. Businesses make money because they provide value to the marketplace, and value is created through energy. The more energy focused in on solving somebody's problems, the more value that's going to be created. If you can multiply your energy through growing a huge team of people all working in unison, all focused on the same goal -- then the amount of money you can create goes up by each new team member that you put on your team. This is how you can elevate from a solo-preneur to a manager and eventually to a full-fledged entrepreneur.
Whether it's leveraging other people's time or leveraging your skills to influence the negotiation, this type of leverage, it's used all the time by creative real estate investors to make more money.
What do you think so far? Are you starting to see how powerful leverage can be for your business?
The last type of leverage that I want to teach you about is the ability to use financial leverage to scale your real estate business. Financial leverage happens when you use a small investment, credit, borrowed funds to gain a high-rate of return, control, larger investment, or reduce your risk/ loss. As creative real estate investors, we use OPM (other people's money) all the time. This happens all the time. Doesn't matter how much money you have. You'll always want to be able to use other people's money in order to leverage their money to get into more deals.
It can be a mixture of things including; bank financing, private financing, seller financing, hard money or simply leverage. Leverage allows you to buy more real estate. Leverage can allow you to buy more real estate and potentially experience much higher cash on cash returns versus paying your own cash to buy deals.
At the end of the day, when I say leverage is power, what I'm talking about is I want you to be powerful. I want you to be successful. I want you to be profitable, and I want you to dominate as a creative real estate investor. You have to master the art of leveraging other people's time, resources, relationships, money, always and always.
Yeah, I stole that last phrase from Ryan Sirhan, but you get the point.
Get your butt out there and leverage, leverage, leverage. Til next time, I'm Cody Sperber, the Clever Investor.
Take care. Comb your hair. Sperber out.
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PPS That's not all, I want you to go ahead and grab my free eBook, How to Flip Houses With Little to No Money Down.