Wednesday, May 28, 2008

Will Flipping Homes Make You Rich?

I'm sure by now most of my readers know what home flipping is but for those that don't I will give a brief explanation. A home flipper will purchase a home that is about to enter foreclosure for a cheap price, invest in making necessary repairs and upgrades and get the home back on market and hopefully sold as fast as possible for a profit.

This concept is not new but is becoming increasingly popular and to those that perfect the method, it is nothing to see a 40-50 thousand dollar profit in a short period of time. This is also becoming increasingly more risky for the investors that don't have the funds to ride out this current real estate market.As many would be flippers soon realize, only on television do homes sell in the first week on the market. First time home flippers are also more prone to miss huge repair items that eat away at the potential profit even before the home is flipped.

Being a contractor and having a brother that is also a contractor, I have done the math and can not for the life of me see why anyone in the world would ever flip a home. Why would anyone ever undertake fixing up a structure that they had to hope and pray did not produce hidden problems half way through the process? Before any of my more intelligent readers begin to point out the 40-50 thousand dollar profit as the answer I want them to first research how much money actually goes into building a home. In 1998, My brother and I were hired to build my uncles home on an acre of land he had purchased for $6000. The total cost for materials and labor came to right at $45,000. For a total of $51,000 ( $6,000 + $45,000) he received a four Bedroom home that appraised at $220,000, even in todays market it still appraises at $175,000.

If my uncle were to have purchased that home via bank mortgage, he would have not only spent decades in debt but would have paid an additional $169,000. If he were to have sold the home as soon as it were finished he could have priced it at $220,000 (fair market value for that time) and seen a potential profit of $169,000. That 40-50 thousand dollar profit looks kind of small now, huh?

Flipping homes may or may not make you rich, for many it leads to nothing but bankruptcy.As for me, I will save my money, purchase land and then pay cash to have a home built on it. Paying cash will allow me to hold on to the home until I get the price I seek, I will never see my profit line decrease due to mortgage payments and I will never deal with hidden problems a previous owner did not know about or failed to disclose.

I wish all the would be home flippers luck in their endeavors however there is a better plan. It has been used by land developers for as long as banks have held mortgages and whether you use it for your own home or simply as a way to gain wealth, it will work for you too. The profit margin is higher (banks gotta have some reason to hold mortgages)and the risk is lower.

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Monday, May 26, 2008

Memorial Day

Before you fire up the grill today, I want you to just take a few minutes to remember that today is more than just a day off from work. Today is about honoring our fallen troops, men and women that died doing their jobs. No matter your political beliefs or how you feel about this war, these men and women deserve our respect and Thanks. So today when you sit around drinking a beer with your buddies, take a moment to remember all the troops that made that possible.I want you to also take a moment to think of all the troops still in harms way, holding it down so we don't have to.

Friday, May 23, 2008

Recession Proof Your Life

If you're an American like myself, you know our country has entered a recession. The rising cost of gasoline alone is enough to make you want to scream. Today I want to talk about what a recession is and a how to not let it affect your life.

First, let me take you back a few weeks ago to when Bush announced our country had entered a recession. It was like the hammer dropped for more than half the country. Almost overnight it was all anyone wanted to talk about as fear set in. Now lets look at what it really meant. There are just as many jobs today as there were the day before the recession started so why all the sudden panic? Because the President said things were bad? Need I remind anyone that this is the same President that only knows how to say "Stay the Course" when it is so evident that "the course" is broken? This is the first President in U.S. history to ever wage war against an unnamed enemy, spending a billion dollars a day to fund it.I'm sorry, I just don't put much faith in anything he has to say. Times are bad but not as bad as he would have the public believe, this is not the end of the world but we can not look to the government to do what we as individuals must take care of ourselves.

First and probably most important, if you don't have an emergency fund in place, start one. This can not be emphasized enough. Stop overspending on things you do not need. Learn the difference between want and need. I want a Brand new truck however I do not need one so that money is better kept in the bank.

Credit cards- I have them and I think everyone should however I believe that they should only be used when you know for a fact that you already have the money to pay the bill as soon as it arrives. If you can't afford to do that then you damn sure can't afford to charge it, the interest rates alone will dig you a huge hole of debt before you will ever get the money repaid. Robbing Peter to pay Paul should never be an option.

Jobs- get one and keep it. Nobody likes to work but it is a necessary evil. I have been employeed since I was 14 and have never once used the lame excuse that I could not find employment. I may not be able to be a rocket scientist but damn near anyone can dig a ditch, work fast food, or swing a hammer. I am also sick of hearing people claim an illegal alien took their job, if your job can be taken from you, you weren't doing it correctly. Excuses satisfy only those people that make them.

Vote- if you don't like the way things are being done, decide what you would like to see different and when election time comes, ask the candidates their stance on those issues. Remember they work for us. Personally, I will never vote for any candidate that supports NAFTA. It was a stupid concept that has allowed thousands of companies to outsource their work to foreign countries to avoid paying taxes and to cheapen their labor costs. That is the true place where American jobs are going, why would anyone want to sneak into our country and "steal" our jobs when our jobs are not even in our country anymore?

Set goals and achieve them, list your goals in order from easiest to achieve to hardest, then begin to take steps to achieve them in that same order. As you finish one you will see the next doesn't look as hard as it once did. Sometimes a little victory is all it takes to make you see that you can do anything you set your mind to...ANYTHING!

Recession is just a word, you are responsible for yourself and until you learn to take responsibility for your own financial future through better money management, you will never know the meanings of debt free or financially secure. This generation of Americans has racked up more debt than any previous generation, it has also produced more millionaires. The difference being only in how one chooses to spend their money.

Saturday, May 17, 2008

I Was Mistaken

In my last post, I promised to announce the winner of my contest to win $50 within 24 hours. Due to me working so hard lately, I had the dates confused and had several bloggers notify me that my original post said the contest winner would be announced on the 19th of May. To those bloggers that anticipated the announcement today, I do apologize but in fairness, I will not announce a winner until Monday night. To all those that have not entered yet, time is running out, get your entries in and good luck to all.

Not Much Time Left To Enter To Win $50

As a blogger and a businessman, I have not had much time to post lately as I have been busy with a few huge jobs for my company. Nevertheless I have not and will not abandoned Entrepreneur Life and new posts will be coming soon. I would like to remind everyone that time is running out to enter my contest to win $50. Some amazing entries are already in however I will be accepting entries up until the last moment so if you have not already entered, there is still time. Picking a winner will not be easy as I have already seen quite a few entries that I feel are winner worthy, alas, there is only one prize to give and as of now it is still anyones for the grabbing.

I will be announcing the winner in less than 24 hours so check back often, remember to drop your card etrecard users, and good luck to everyone.

Saturday, May 10, 2008

Successful Men That Didn't Complete College: Part 3

The list could not continue without the mention of this next group of individuals that not only did not complete college, but are not even men, thus fortifying my belief that anyone, with enough drive and determination, can become a success. Success is not confined to a certain race, religion, or sex anymore that it is confined to a college degree.

Rachel Ray, famous food network chef, has taken the culinary art to the next level, all without college.

Debbi Fields started Mrs. Fields Cookies at the age of 20. Until then she had been a housewife with no business experience at all. She now owns one of the most successful cookie companies.

Mary Kay Ash, has not only become very famous worldwide herself from her own brand of cosmetics, she has also allowed nearly a half a million women to follow in her footsteps and start their own Mary Kay franchises.

To sum up this 3 part post, I would like the reader to remember that life is about choices we make, we can choose not to try and nothing will change. We can choose to try, and things may change, or we can follow the examples that others have set before us and replace the word "try" in our vocabulary with the word "do".

Wednesday, May 7, 2008

Successful Men That Didn't Complete College: Part 2

Continuing with the list of successful men that never completed college we have:

Simon Cowell who started out working in the mail room for a music publishing company, I believe anyone that has ever watched TV knows how far he has come.

Barry Diller, chairman of Expedia, dropped out of college to form FOX Broadcasting Company

Walt Disney who not only didn't complete college, he didn't complete High School, dropping out at the age of 16

Sunday, May 4, 2008

Successful Men That Didn't Complete College: Part 1

Over the next few posts I will be covering some of the most successful men that never completed college.This Post will be broken into 3 parts so be sure to subscribe to my RSS feed so you don't miss any of this exciting post series.

Michael Dell dropped out of college at the age of 19 and used $1000 to found a company known as PC's Limited which later became Dell,INC., one of the best known computer manufacturers in existance today.

Henry Ford left home at the age of 16 to become a machinest apprentice, later founding Ford Motor Company. The Ford Model T allowed him to expand to a large factory and revolutionize auto manufacturing.

Bill Gates who once held the title of "Worlds Richest Man", dropped out of college to found Microsoft.

Saturday, May 3, 2008

Sacrifices of Owning Your Own Business

Starting your own business can be one of the biggest decisions you ever make and before I go any further with this post, I want to say that I believe 100% that anyone can do it and be a success if they are willing to make all the necessary sacrifices. The biggest sacrifice a new business owner will have to make is probably time, often having to work 16 hour days just to become known. Their business will have to become priority number one. Clients will come before family and friends. If this sounds like a huge price to pay to you then you're right. In time things do get better and work hours may shorten but in the beginning you will have some days when you question your own sanity for ever starting a business. After all, being your own boss is supposed to free up your time to do what you want, right?

I have made it past the majority of the time constraints my business immediately put me under however there are still some days I wake at 6:00 a.m and don't go to bed until 2:00 a.m the next morning. This week in particular comes to mind, my sales team is looking to make May a record breaking month for my company and as things stand now, their setting up deals as fast as I can close them. I get stressed when my free time I thought I was finally gonna be getting is taken away but in the end I know I did not start a small business to remain small and by doing what I have to now, I will be doing what I want to later.

Starting a business is not for the weak at heart and should not be done without fully understanding that your time is no longer yours. It belongs to your business and your clients and unless you treat it as such, at least in the very beginning, you will fail. No business starts off as a well known entity pulling a gazillion dollars a year. If you examine any successful business, you will find that somewhere in the beginning days, there was someone that skipped meals, breaks, and days off to build something from nothing. Only later, after paying their dues did they reap the rewards.